Assembly votes to boost school funding

PALMER — A funding measure passed by the Mat-Su borough assembly Monday would give borough schools about $1.6 million in additional funding without raising the area-wide property tax rate.

The amendment came on the opening night of deliberations on the borough's Fiscal Year 2017 budget, which will continue Thursday and Friday at the assembly's chambers in Palmer.

An amendment to the proposed budget shifts money from the School Site Acquisition Fund to fund a full 6-percent increase over the 2016 fiscal year, which ends June 30. The assembly approved the measure by a 6-1 vote, with assemblyman George McKee casting the lone dissenting vote. District 5 assemblyman Dan Mayfield offered the amendment to the budget, which the assembly is currently debating.

Mat-Su Borough School District assistant superintendent for business services Luke Fulp praised the move.

“We see this as being innovative thinking on assembly member Mayfield’s part,” he said.

The fund balance for school site acquisition had grown as the schools had under-spent past budget projections, Fulp said.

At the end of the year, those funds would typically revert to the school site selection fund. The assembly move allows the money to boost the school system’s operating revenues instead.

Raiding the site acquisition fund takes advantage of the 2015 suspension of a state-administered school construction bond debt program. The last of several schools funded in 2011 will open this fall when classes begin at Dena'ina and Iditarod elementary schools. Fulp said no new construction is planned in the immediate future.

“We don’t anticipate building any schools until July 1, 2020,” he said.

Officials also anticipate receiving reimbursement of about $800,000 from Twindly Bridge Charter school over the next two years to replenish the site selection funds, Fulp said. Future bonds for school construction will also be able to include money for site selection, Fulp said.

Even with the assembly’s funding boost, about $6 million in reserves spending, and a $50-per- student increase in state funding, school system officials say they will have to cut the equivalent of 30 full-time positions from next year’s budget — even as the district's projections show a possible 350 students next year. School officials are still evaluating options for how to make those cuts, Fulp said.

During the school system’s budget presentation in March, officials told the assembly they'd ask for a six percent increase, citing increasing enrollment as the primary reason. In subsequent meetings, officials said the district’s insurance costs had increased by about $3 million, information unavailable at the time they made their official presentation about the budget increase.

Officials, including Fulp, say they’ve been unable to ascertain why insurance costs — set by the Public Education Health Trust — have risen by that amount.

That’s unacceptable, McKee said.

“They actually do not have hard data to justify a six percent increase,” he said.

Increasing enrollment by itself wasn’t justification enough for increased funding above 3 percent, he said, especially with uncertainty over the future of Alaska's economy.

“Everyone says ‘Oh my goodness, the population is increasing in the Mat-Su Borough,’” he said. “No. It has been. Nobody knows if it’s increasing right now or not.”

A McKee-authored amendment that would have limited the increase to three percent failed by a 6-1 vote with McKee the lone supporter.

On Wednesday, assemblyman Jim Sykes said he voted for the increase because the school district had improved its fiscal performance, and said increasing enrollment was a suitable justification for the increase.

“The school district has increased about 1,000 students over the last two years,” he said. “The projection is for another 350. The school district has been pretty good about expending their funds and saving their funds for the future.”

At the same time, tougher budget battles loom ahead for the school system, particularly if enrollment continues to increase, or gloomy economic projections materialize, Sykes said.

“I told assistant superintendent for business services Luke Fulp, ‘Look, it’s going to come down to whether we think you need the money more or we think we need the money more,’” he said.

Several other budget amendments were continued until the next budget meeting, which is scheduled for 6 p.m. on Thursday, May 12. The assembly will also meet to discuss the budget on Friday, May 13 at 6 p.m.

Contact reporter Brian O’Connor at 352-2270, brian.oconnor@frontiersman.com, or on Twitter @reporterbriano.