Petersburg School District Faces Higher Utilities and Lower Per-Student Funding

(Photo by Elizabeth Jenkins/KFSK)

The Petersburg School District hopes to cushion some of the projected cost increase and lost revenue with additional money from the borough. As Angela Denning reports, the school district faces inflation while losing some per-pupil funding next year.

Every student is worth money from the State of Alaska, which pays a large portion of the Petersburg School District’s budget. But the student body is down, and the district expects $386,000 less per student next year.

The district is budgeting for about 412 students, down 13 from this year. This means funding for two schools instead of three.

The state uses a formula that funds districts more if they reach a threshold of 425 students. The state considers this to be a three-school funding level. St. Petersburg is not expected to achieve that mark, putting it in the two-school formula.

Finance director Karen Morrison told the school board at their last regular meeting that the state’s formula is complicated and outdated. But essentially, not reaching a threshold of 425 students will be a great success.

“When you fall below that number, you see a pretty significant reduction in your foundation’s funding, which is 82% of our overall budget,” Morrison said.

Losing students is just one of the challenges the school district will face next year.

The cost of fuel oil is another. Morrison says the price has more than doubled over the school year.

“We started the year at $2.17 a gallon and are now at $4.37 a gallon,” Morrison said.

This equates to a 47% increase over last year.

In a budget change in the spring, Morrison added $132,000 more for utilities, hydro and fuel oil. The district has the funds for this in the form of savings, but she says it will be a challenge to budget for next year.

“That, unfortunately, reduces professional development opportunities, educational supplies,” Morrison said. “That certainly goes into our fund balance as well.”

Due to inflation and the state’s current oil wealth, there is some hope that the legislature will pass on some of its savings to school districts.

There are bills in the works that would increase the money the state distributes per student or what is called the Basic Student Allowance. This figure has been stable for six years at $5,930 per student. A bill aims to increase the BSA for two years. Another is watching stabilize the allowance by increasing it in line with inflation.

Morrison supports long-term education funding for longer-term planning, but she says she can’t count on support from the bills at this point.

“These are unknowns,” she said. “We really have no idea when we will know what our funding will look like. So it’s always a challenge every year when we try to create a budget and even more so for this year.

Another bill seeks to revive the school bond debt repayment program, which the legislature froze in 2015. The program has been used to reimburse municipalities for school-related capital projects.

Superintendent Erica Kludt-Painter would like lawmakers to lower the reimbursement rate from 60 to 70 percent, but she says everything is up in the air.

“There are good things moving,” she says. “It’s right in the middle.”

The regular session ends on May 18. If the legislature has not agreed on a budget by then, it may meet in special session.

Meanwhile, the school district has requested more money from the Petersburg borough to help ease the financial pain.

The borough has given the district $1.8 million a year for more than 20 years, and Kludt-Painter says it’s time to increase.

“This year, looking at our enrollment numbers and some of the other fixed costs, because we’re all dealing with the price at the pump, our utility and fuel bills are astronomical,” she said.

The borough is proposing to increase the school district’s payment by $200,000 using $1.4 million from property tax revenues and $600,000 from secure funds for rural schools. This is a federal payment to municipalities near national forest lands instead of money that could come from a timber industry.

The school district will review its operating budget in June.