The Juneau School District is facing a deficit of more than $9.5 million for the current fiscal year, according a district report published Jan. 5. (Clarise Larson / Juneau Empire file photo)

The Juneau School District is facing a deficit of more than $9.5 million for the current fiscal year, according a district report published Jan. 5. (Clarise Larson / Juneau Empire file photo)

Juneau School District facing $9.5 million deficit this year, new analysis shows

Lower revenues and higher costs mean $7.6M shortfall for FY24, plus $1.9M deficit from FY23.

This is a developing story.

The Juneau School District is facing a deficit of more than $9.5 million this year — about 10% of its total budget — according to an updated review of the district’s finances published during the past few days.

The district is projected to have an operating fund deficit of nearly $7.6 million for the current fiscal year, plus a deficit of more than $1.9 million that carried over from the last fiscal year, according to a report published by the district Jan. 5 and presented to the Juneau Assembly on Monday by City Manager Katie Koester.

“These two deficits total $9,545,074 and will need to be cleared to zero by June 30, 2024,” the report states. The district’s budget for the current year is about $95 million.

Because the district is already more than halfway through the current fiscal year, cuts or other adjustments during the remaining months will likely need to be of a significantly higher percentage than the year-long 10% deficit.

Numerous reasons for the deficit are cited including lower-than-projected enrollment, higher-than-expected staff costs, and an end to some COVID-related and other one-time funding.

The updated financial picture was provided by a newly hired budget official after Cassee Olin resigned as the district’s administrative services director on Dec. 1. The resignation followed the release of an audit that revealed the deficit from last year, plus faulty financial practices that in some cases were also found in an audit the previous year.

At the time of Olin’s resignation, district officials said the total deficit for the current fiscal year could total about $7 million.

The school board is scheduled to discuss the deficit with city leaders during a work session at 4:30 p.m. Tuesday and during its regular school board meeting at 6 p.m., both in the library at Juneau-Douglas High School: Yadaa.at Kalé.

Koester, in an interview after Monday’s Assembly meeting, said the issue is important to city leaders because of the broad impact schools have, but there are restrictions on offering help since the city already provides the maximum “cap” funding allowed by the state to districts for instructional purposes. Juneau was recently engaged in a battle with the state about “outside-the-cap” funding for purposes the city considered non-instructional such as pupil transportation and Community Schools, but the state for now has backed off challenging those funds.

A similar thought process may be involved in examining the district’s unexpectedly high deficit, Koester said.

“I think one thing that the Assembly is going to be looking at is are there any additional pieces that the CBJ could take over from the school district to help with their current funding limit?” she said. “That doesn’t mean that the Assembly will.”

District Superintendent Frank Hauser declined to comment on the revised deficit Monday night. Will Muldoon, chair of the school board’s finance committee, could not be reached for comment as of press time Tuesday morning.

• Contact Mark Sabbatini at mark.sabbatini@juneauempire.com or (907) 957-2306.

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