Schools face next year without any more federal pandemic aid

The Wrangell School District will have to do without federal pandemic-era grants for the next school year, creating a sizable gap in revenues and requiring spending cuts and/or pulling money out of savings to balance the budget.

At a work session Jan. 15, the school board reviewed with district business manager Kristy Andrew a draft budget for the 2024-2025 school year.

The district has been using the federal aid to cover the salaries of its two school principals, but this is the last year that money is available.

“With the exhaustion of our COVID grants, we are estimating an additional $300,000 in principal salaries, benefits, and associated costs starting in (school year) 2024-2025,” Andrews explained in an email to the Sentinel.

“We’ve been planning, knowing that those grants were going to go away,” Schools Superintendent Bill Burr said later in the week. “By saving money over the last two years, and using our grant money carefully, we can prepare better for the loss of that grant money,” he said. “If we hadn’t prepared, we would have spent our entire reserve.”

The beginning draft budget presented at the Jan. 15 meeting assumes no increase in state funding for the next school year, though the Wrangell district and others around the state have been pushing for an increase in the state’s per-student funding formula — which has not changed since 2017.

The draft budget for next year shows general fund revenues of $5.2 million — of which about 60% is from the state foundation funding formula—and expenses of $5.79 million.

If the state does not significantly boost its funding, the school board could pull from reserves to cover the gap or consider spending cuts.

The state sets a limit on how much money a school district can hold in reserve but granted a waiver for Alaska districts to exceed that limit through June 2025 to help cope with pandemic disruptions to their finances. “School districts who are in boroughs can only keep 10% of budget reserve, but we can use that waiver so we can use more than 10%,” Burr explained.

According to preliminary numbers, the Wrangell district could end this school year with more than $1 million in reserves.

The school board is planning a district-wide staff meeting and a public hearing on budget plans for Feb. 26, followed by a work session with the borough assembly on Feb. 28. The board is targeting March 15 to submit its final budget to the assembly.