Daily Sitka Sentinel

Schools Make Pitch Tonight for City Funds

By SHANNON HAUGLAND

Sentinel Staff Writer

The Assembly will meet with the School Board tonight for a work session on city funding for the 2023-2024 school budget.

The annual joint meeting is an opportunity for the school board to outline the needs of the district, and formally request city support. In recent years, the board has asked for the full amount of local funding that’s allowed under state law.

The 6 p.m. joint work session will be held at Harrigan Centennial Hall, and is open to the public. 

“My hope is from this meeting we’ll get a good idea of what will go into this (city) budget,” said City Finance Director Melissa Haley. “This is our single biggest expense, and we really need to know what our commitment is going to be. It certainly helps us and helps the schools to know where we’re going to be for the budget year.”

In the months ahead the Assembly will hold additional work sessions on FY2024 funding of other sections of the city budget.

Most school funding comes from the state, but the city is required to cover the additional amount needed for a balanced school budget. School Superintendent Frank Hauser said the district is entering the budget season with an expected $2.8 million deficit, based on current assumptions, for the budget year starting July 1, 2023.

“The big thing is we’ve had cost increases, fixed costs like health insurance that have continued to go up, we’ve had salary increases that continue to go up – and having a flat base student allocation has had an impact,” he said. “The other impact is the fact that there was a reduction that we’ll get from the taxable property that Sitka has.”

Hauser was referring to a state law that limits the amount of funding a city can provide to schools. This “cap” on local funding is based on the total of the community’s property valuations, and Hauser said the decline “essentially indicated (there) will be a $247,000 loss of what the city can give as part of the cap.”

Last year, the Assembly funded to the allowable cap, which was about $8 million. This year the cap will be $7.7 million, because of a decline in taxable property valuations, the city finance office said.

Additional local funding is allowed for “non-educational” expenses, and the total approved for schools last year was $8.8 million. The Assembly passed a supplemental budget increase this year adding $600,000 for repairing the heating system at Blatchley Middle School.

The city finance department will have a brief Power Point presentation tonight to review decision points on school funding – including whether to fund to the cap – and on particular needs such as heating the Performing Arts Center, capital repairs, building maintenance, pool operations, extracurricular student activities and associated travel costs.

Every year the Assembly and School Board decide how to share the city’s Secure Rural Schools funding from the federal government. This year’s amount has not been approved by Congress, but it usually comes in around $500,000. This is another item of discussion generally at the joint work session, and is on the Power Point slide labeled “Other aspects of local funding for education.”

Another additional factor in the FY24 discussion is the new local revenue source for school activities and associated travel.

Voters in October approved a special sales tax of 6 percent on retail marijuana sales, and dedicating the proceeds to the schools for student activities and travel. Estimates in the budget are that $300,000 might be available from that source to help needy Sitkans who want to participate in activities.

The ordinance setting the special 6 percent tax on marijuana sales exempts those sales from the regular city sales tax of 5 or 6 percent, depending on the season, so the city general fund revenue is being reduced by that amount.

Hauser said the $30 per student state increase in the base student allocation will help raise the per-student amount received to $5,960, but, in general, state support for schools has been “flat funded” since 2017.

The School Board letter to the Assembly asks for “full funding for the 2023-24 school year as calculated using the final October student count period ... and any allowable funding increase as a result of an increase to the Base Student Allocation passed by the Legislature and approved by the governor.”

Hauser said he doesn’t know what the prospects are for a BSA increase other than the current year’s $30 per student raise.

But he cited some hopeful news, including signs that Sitka’s school enrollment is stabilizing, with 13 students added to the rolls after the end of the official enrollment count in October.

The School Board also is asking for the usual funding from the city for building maintenance ($150,000), student activities ($132,220), pool ($122,000) and PAC heating ($66,000), in addition to funding to the cap ($7.7 million) and $360,000 from the Secure Rural Schools funding out of the $500,000 that the city expects to receive. The school district request also mentions the need for safety enhancements (electronic access control systems) on its capital improvements list.

The minimum the city can give the school district under state law is $4,143,780, and the maximum is $7,734,458. The expected state support of $11.4 million is based on a school population estimate of 1,111 students for next year.

In the fall of 2022, the state count level was 1,112, but since that time 13 students have come into the district, Hauser said.

“We’re actually believing enrollment could be stabilizing,” Hauser said. “Now we are at 1,125.”

The superintendent said he’s pleased to see students returning to the schools, after choosing home school options during COVID.

The letter from the School Board ends with :

“Thank you for your consideration of our request to fund the district to the cap and additional appropriations,” said the president Blossom Teal-Olsen.

Haley said she is hoping for a firm direction on local school support from the Assembly tonight and at a February 2 special meeting, which will include a discussion of other general fund budget items.

“We’ll be seeking pre-emptive guidance so the budget will reflect what the Assembly wants,” she said.