School board, assembly get peek at next year’s school funding with $22 million deficit

Members of Mat-Su’s assembly and its school district board met jointly last Tuesday, Dec. 9, to start the annual budget work for schools. It was the first peek at a FY 2027 budget for school board members, the assembly and the public, and first indicators on what funding problems school administrators will face next year.

The issues are sadly familiar: State funding will likely continue to be flat or even reduced, that due mainly to declining enrollment. Against this there will be rising fixed costs for buildings for utilities and insurance and higher personnel costs for health care and scheduled pay increases for teachers.

The first cut at a Fiscal Year 2027 school budget is for $285.34 million in expenditures with revenues of $262.6 million, although expenditures will decrease as the budget is fine-tuned. State funding is expected to be down from $188.36 million in the current year, FY 2026, to $182.27 million next year, in FY 2027, according to data presented last Tuesday.

About 80% of the school district budget is in personnel costs, the majority for teaching staff, deputy superintendent Katie Gardner told the school board and assembly.

Pupil transportation issues for school busing will also continue. The school district had to cut school bus costs this year, resulting in fewer routes served particularly in outlying areas. More of this may be in store next year, Gardiner warned the school board and assembly.

Cuts in school busing work big hardships for working families who have to find alternative ways to get children to school if bus routes are cut again.

While the Legislature increased base funding for all schools in the 2025 legislative session, overriding a veto by Gov. Mike Dunleavy, the increase wasn’t enough to cover increased costs, and declining enrollment in Mat-Su schools will cut state funds next year.

Another twist this year is that the assessed property tax value for Mat-Su will trigger a hike in local funding for schools set out in state law, although the Mat-Su Borough’s increased contribution isn’t mandatory.

School officials’ first stab at a Fiscal Year 2027 budget presented Tuesday has a deficit of $22 million between revenues and costs, Gardner said. If the borough assembly decides to pay the increased local contribution would cut the deficit by $3.2 million to about $19 million. The borough’s total contribution to school support would increase from $78 million to $81 million, she said.

Increased borough funding for schools will be a hot debate in the assembly when it comes to a vote because the borough is dealing with its own funding uncertainties, a big one being on whether the governor will reduce the state’s local school debt service contribution for a second year.

This will require the borough to again pick up the shortfall for bond payments that are legally required for municipal general obligation bonds like those issued by Mat-Su to build schools.

To give perspective, Gardner said $3.2 million is roughly equal to elimination of 32 positions in schools; elimination of all school district funding for student activities; ending many core academic courses in classes and a 16% reduction in school busing, which will mean more cuts to bus routes.

Even if the borough assembly agrees to pay the added $3.2 million there will still be a substantial deficit.

School superintendent Dr. Randy Traini and Gardner will have to come with additional cuts to deal with that by the next time the school board sees the budget or budget options, which will be in March, and those proposals will have to be for a balanced budget, Gardiner said.

The borough assembly will approve the final spending plan for schools along with its own budget at the start of the FY 2027 fiscal year in July.

At the conclusion of Gardner’s presentation Borough Mayor Edna DeVries, who was presiding, opened the meeting to assembly and school district member comments, and school board member Ole Larson started things with a strong pitch for the borough funding the increased local contribution because to not do so is an effective cut.

Larson said he has been a Mat-Su resident for 45 years and is s fiscal conservative, but with grown children who have gone through local schools and grandchildren now in school, he feels he has standing to voice his views.

“We’ve got to stop looking at school funding as an expense but instead as an investment in the Mat-Su borough’s stability in retaining its economy and attracting a workforce which also brings families,” he said.

The school district has accomplished a lot, spending less per student than other districts and with high academic achievement shown through test scores. A new school was recently built without adding debt, he said.

Last year the state failed in its commitment to fully fund school debt support, but when voters approved bonds to build new schools several years ago they expected the borough to fully fund operating costs of the schools.

“To adequately fund schools will grow our economy. I not do so will achieve the opposite,” he said.

Still, there were questions about how efficiently the school district is using its money. Dee McKee, an assembly member noted that the 49 schools operated by the district employ 41 school principals (some principals support two schools).

There’s broad support for teachers but in many ways the school district seems heavy on administrators, she said. Assembly member Tim Hale observed that when he attended school 30 years ago there was one school counselor in each school. Now there are typically three to four per school.

School superintendent Randy Traini pointed out that students are needing more support these days and, “the world is changing,” in the social environment children are growing up in. Besides, Mat-Su students’ academic achievements and high test scores are the results of major investments in teaching including the administrative and other support for teachers including counselors, he said.

There are also added costs due to choices made by Mat-Su. For example the major investments in school choice though charter schools and the district’s support for correspondence study and home-schooling come at a cost, since these add to administrative burdens.