The school district is requesting $1.75 million from the borough for the 2024-2025 school year budget, an increase from the $1.6 million contribution of the past two years.
Even with the increase, the budget will draw down more than half of the school district’s reserves to balance revenues with expenses.
The uncertainty of any increase in state funding is adding to the budget stress at Wrangell schools and districts across the state. The state funding formula has increased little more than a few dollars in the past seven years.
The annual budget and funding request, approved by the Wrangell School Board on April 15, moves next to the borough assembly, which will decide on the local contribution to the school system as part of its deliberations for the borough’s overall fiscal year budget.
Kristy Andrew, district business manager, presented the budget to the school board via video conference, explaining that the district expects about $5.3 million in state, borough and federal revenue for its operating budget, which falls short of almost $6 million in expenses.
To balance the budget, the district plans to draw nearly $700,000 from its reserves, currently estimated to end this fiscal year on June 30 at more than $1.25 million, leaving approximately $560,000 in reserves.
“We prepared for that,” Schools Superintendent Bill Burr said in an interview April 18. “If the borough gives less than the maximum, then we will either have to draw more reserves or make cuts, and I can’t make cuts to certificated (teaching) staff at this point.”
There are no current plans to cut programs or staff for next year. Of the proposed budget, 75% would go to salaries and benefits for faculty and staff.
Additional financial assistance from the state could help relieve the budget stress, but a bipartisan education funding bill that would have sent about $440,000 more in state funding to the district was vetoed by Gov. Mike Dunleavy on March 14. Then four days later, the Legislature failed to override the veto by one vote.
Even if the bill had passed, it would have fallen short of covering the inflation that has piled up since the state last boosted the funding formula in 2017.
The Legislature is working toward a May 15 adjournment deadline, with lawmakers pushing to approve at least a one-time boost in state aid to school districts, similar to last year, if they are unable to agree on a permanent increase in the formula.
The Wrangell district is projecting 260 students for next year, the same as this year but down more than 40 students from pre-pandemic numbers.
For the past few years, the district has balanced its budget with the help of federal pandemic aid, using the one-time grant money to cover the salaries and benefits of school principals. Now that those grants are exhausted, the district will need to cover those costs of about $300,000 from its general fund dollars. However, the school district and board had planned for the eventual loss of that federal funding, saving as much as allowed.
While the state sets a limit on how much money a school district can hold in reserve, a waiver was granted for Alaska districts to exceed that limit through June 2025 to help cope with pandemic disruptions to their finances.
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