Juneau schools could take out a loan to cover budget deficit

The Juneau school board has approved a series of immediate cost-cutting measures including a hiring freeze, plus exploring the longer-term option of a loan to help deal with an unexpected $9.5 million budget deficit.

Members at the Jan. 16 meeting were also presented with large-scale future cuts to consider, including school consolidations, closing the district during the summer and going to a four-day school week.

Board members, after learning earlier this month about the substantial deficit for the fiscal year ending June 30, asked Schools Superintendent Frank Hauser to present a list to consider for cuts “as distasteful as that may be.”

The deficit was caused by several factors including accounting errors in the district’s revenue and expense projections, plus the erosion of state funding which has remained essentially flat since 2017.

The district got a major reprieve in its timeline to resolve the situation Jan. 12 when the Alaska Department of Education agreed to a five-year repayment plan for the deficit, rather than invoking a law allowing the department to withhold money next year if the district’s budget was out of balance.

However, that doesn’t resolve the need for a budget that fixes current and past deficit spending, Hauser said during his presentation at the Jan. 16 school board meeting.

“You were being squashed from the revenue side” and expenditures, he said. “It was kind of a freight train that was coming from both directions. The magnitude of this problem and these numbers, I don’t believe it’s possible any longer for the district to make small, targeted cuts to address these huge numbers.”

Among the larger proposals presented by Hauser were moving sixth-grade glasses back to elementary schools and consolidating schools. He said the cost savings to staff would average $668,000 for each elementary school eliminated, $913,000 for each middle school and $1.3 million for each high school — but that would vary widely depending on student enrollment.

Consolidation has been an ongoing discussion in recent years due to the shrinking number of students in the district. There were about 5,701 students in Juneau’s schools in 1999, about 4,100 this year and about 3,000 are forecast for 2032.