Juneau Board of Education members recently voted to OK a series of budget revisions that will balance the district’s operating fund deficit of over $620,000 along with its $63,000 deficit in total governmental funds it owes to the city.
According to budget documents, the district was able to fix its unexpected $620,407 deficit — that was caused in part due to the district’s failure to follow policy, according to an independent audit — thanks to a one-time revenue funding share of $1.8 million from the state, the district’s portion of $57 million included in a House bill passed by the legislature last session. The portion is based on the number of students enrolled in the district. The $63,000 was addressed via Medicaid reimbursements.
Since October when the district’s annual audit exposed the major deficit in its operating fund balance, the district has been faced with a tight timeline to offset the recent overspending identified.
State statute requires the district to start each new fiscal year — which begins July 1 — without any deficit in its operating funds, which pays for general district costs like paying teachers, student support services and student activities. The City and Borough of Juneau also require the district to pass a balanced budget.
Board members say the deficit fixes are only temporary.
“It’s doing the lift right now, but I wouldn’t say that it’s cured anything — we still have the structural issues and this one-time funding is a Band-Aid,” said Will Muldoon, board member and finance committee chair. “Just given the size of the deficit for the next budget cycle that’s growing, change is going to have to be at the state level.”
According to Cassie Olin, director of administrative services for the district, the district is already projected to see an estimated more than $1.6 million deficit in its operating fund in the next fiscal year, which will need to be addressed and balanced during the budget cycle in March.
Olin said to balance the expected deficit, the district will need to look toward alternative means to make up for the loss via consolidation and cutting programs and/or positions. She said the board will be discussing the options to fix the deficit in the coming months.
Though the district was able to address its operating fund deficit, it still faces major deficits in other parts of its budget, notably in the district’s student transportation fund with a negative balance of $800,853.
According to Deedie Sorensen, board president, the deficit is largely due to flat funding from the state which hasn’t increased its funding toward Alaska school district’s transportation since 2005.
“The stakes are higher now, we have to be cautious and deliberate at every step,” Sorensen said.
Because of this deficit, the district also passed a motion at its meeting to pursue asking the Juneau Assembly for funds outside of the city’s state-required funding cap, equating to more than $2.5 million requested, an addition to its initial request of $2.2 million during the budget cycle last year.
The request includes a $1.2 million ask to go toward offsetting the district’s transportation deficit.
According to CBJ Finance Director Jeff Rogers, costs associated with student transportation, student activities and support for food and nutrition programs are generally able to be funded outside of the cap.
He said the district’s plans to ask for the out-of-cap funding will likely be addressed during the city’s annual budget process which starts in March, but noted it is subject to change.
Assembly member Michelle Bonnet Hale said her general philosophy as an assembly member has always been offering as much help to the school district as much as possible, even outside of the cap.
“I think they’re really badly hampered by the state funding formula, as are all schools across the state,” Hale said.
However, she noted the request from the district is “a lot of money and late in the game” and she said she intends to examine it closely before making a final decision.
• Contact reporter Clarise Larson at clarise.larson@juneauempire.com or (651)-528-1807. Follow her on Twitter at @clariselarson.
