The failure of the U.S. House to reauthorize federal funding to assist rural communities with a lot of non-taxable federal land — such as the Tongass National Forest — presents a $550,000 challenge for the Wrangell School District and borough.
If the new Congress doesn’t fix the problem, the district could have to further draw on its reserves, or the borough could have to take from its reserves to plug the gap, or a combination of the two.
Or cut spending at the schools — the federal money represents about 10% of this year’s school district budget.
The funding program dates back to 2000, when Congress passed the Secure Rural Schools Act to assist communities hurt financially by the declining timber industry. It provides funds for schools, as well as for roads, emergency services and wildfire prevention.
The amount appropriated each year varies depending on federal land use and revenues. In 2023, the law awarded over $250 million nationwide, with more than $12.6 million to Alaska — about $800,000 for Wrangell, which the borough uses in a few different ways.
The reauthorization bill passed the Senate unanimously in November but then stalled in the House amid partisan end-of-year negotiations around the stopgap spending bill to keep the government open until March. The funding program faced an end-of-2024 renewal deadline.
House Republicans, who controlled the chamber last year and again this session, decided not to vote on the bill late last year amid a dispute around health care funding, a spokesperson for the bill’s sponsor, Oregon Sen. Ron Wyden, told the Oregon Capital Chronicle, which first reported the story.
The funding has typically gone to more than a dozen Alaska boroughs and unincorporated areas in the Tongass and Chugach national forests.
Alaska Sens. Lisa Murkowski and Dan Sullivan supported the bill through the Senate last year.
“As a longtime advocate for this program, she (Murkowski) recognizes its critical role in funding schools and essential services in rural communities,” said the senator’s spokesman, Joe Plesha, in a text on Jan. 10 to the Alaska Beacon. “She is actively working to ensure its renewal so that states like Alaska are not disadvantaged.”
Congressional supporters say they will try again in the new Congress. But even if the legislation passes, payments likely would arrive late, said Hank Stern, a spokesperson for Wyden.
This isn’t the first time the law has expired without congressional action. Payments lapsed in federal fiscal year 2016, then resumed in 2017 after Congress eventually reauthorized the program.
The program provides funding for schools, roads and other municipal services to more than 700 counties across the U.S. and Puerto Rico, according to the U.S. Forest Service.
Congress in 1993 enacted a different federal aid program, called “safety net payments,” also intended to help timber-dependent areas hit by the decline in logging and mill operations, particularly in the Pacific Northwest. The 2000 passage of the Secure Rural Schools Act was designed to provide more funding certainty
The federal money is to “compensate for Forest Service land that would otherwise be charged property tax within the borough’s jurisdiction,” according to Wrangell’s municipal budget report. “Ninety-seven percent of the land within municipal boundaries is part of the Tongass National Forest.”
In Wrangell’s case, the borough divides the money between the school district, capital improvement projects and to pay off bond debt on big projects.
The borough contributed $1.3 million to this year’s school district budget, using $550,000 from the Secure Rural Schools account and $750,000 from sales tax receipts (20% of tax collections).
The district’s total budget for this year shows about $6 million in spending. However, with $5.3 million in estimated state, municipal and federal revenue, the district is budgeted to draw about $700,000 from its reserves to balance the spending plan.
If the numbers come in as budgeted, the school district would end its fiscal year on June 30 with about $600,000 left in its reserves.
If revenues come up short, the school board could vote to further draw down its reserves, but that would leave the district closer to emptying the account.
Because the Secure Rural Schools appropriations vary year to year and can be late, the borough has maintained a healthy balance in the account to ensure stability. But that reserve is in decline. It held $3.368 million on July 1, 2019, but was down to $2.229 million on July 1, 2022, and is projected to end this fiscal year at $1.428 million — assuming Congress makes good on last year’s funding.
In addition to budgeting $550,000 from the account for the school district, the assembly approved $520,000 for capital projects, including a new high school elevator, and $242,000 to pay off bond debt.
“It’s pretty devastating from a community standpoint,” Wrangell Schools Superintendent Burr told the Alaska Beacon in a phone interview. “Because that is very connected to the amount of local contribution that we get from our local borough, it has a dramatic effect on the school district, so I’m disappointed.”
“As these cuts continue to happen, there’s less and less that we’re able to do,” he said. “School districts are cut pretty much as thin as they can. When these things happen, with no real explanation, the impact for districts that do receive secure schools funding is even more dramatic.”
“We’re already at our bottom,” said Superintendent Carol Pate, of the Yakutat School District, which received over $700,000 in funding, one of the largest funding sources for its 81 students.
“We are already down to one administrator with six certified teachers,” Pate said in a phone interview with the Alaska Beacon on Jan. 9. “We have a small CTE (career and technical education) program. We don’t have any art, we don’t have any music. We have limited travel. Anything that we lose means we lose instruction.”
Yakutat is facing a $126,000 deficit this year, a large sum for their $2.3 million budget, Pate said. “So that’s a pretty significant deficit for us. We do our best to be very conservative during the school year to make up that deficit. So wherever we can save money, we do.”
Superintendents Burr and Pate described hope for the upcoming legislative session, and an increase in the state’s per-pupil funding formula. But that is uncertain, same as the federal funding.
This story includes reporting by the Alaska Beacon and Education Week, a nonprofit newsletter.
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