Anchorage School Board passes budget avoiding some painful cuts but reliant on uncertain state funding

The Anchorage School Board on Tuesday night approved a roughly $630 million operating budget for the coming school year that included minimal cuts to classroom instruction by betting on an increase in state education funding that is not guaranteed.

The amended budget — which passed 6-1 in a full board vote — left the popular IGNITE program for gifted elementary students intact, left class sizes unchanged and walked back some of the other proposed cuts to dozens of teacher and staff positions. Only board member Dave Donley voted against the budget.

The initial cuts had been proposed by school administrators this month to offset a nearly $100 million structural deficit that board members and administrators have said was the result of years of stagnant state education funding that hasn’t kept pace with inflation.

On Tuesday night, school board President Margo Bellamy and board members Carl Jacobs and Kelly Lessens proposed an amendment to add back roughly $9 million to the district’s operating budget in order to avoid some of its more painful cuts.

The amendment proposed putting $4.5 million back into the budget to avoid increasing class sizes for students in fourth grade and older; retaining 18 IGNITE teachers, at a cost of about $2.2 million; and keeping several immersion teachers and counselors for an added cost of nearly $1 million, among other changes.

That additional budgeted money came with a caveat: It is dependent on Alaska legislators and Gov. Mike Dunleavy approving a modest increase of at least $110 to the Base Student Allocation, or BSA, the state’s per-pupil funding formula, before July.

The board would also be counting on an increased local contribution by the Anchorage Assembly that comes with an increase in state funding, according to the district’s chief financial officer, Andy Ratliff.

During the meeting, schools Superintendent Jharrett Bryantt said creating a budget based on unsecured funding was somewhat risky and a departure from normal procedure.

“This amendment assumes at least a small BSA increase this year, and veers away from our standard practice,” said Bryantt. “So there is a small risk, but we can manage it. So if our worst-case scenario becomes a reality — which would be a $0 education funding increase — it could result in staff displacement and some turbulence. But we can do our best to transparently manage that if that occurs.”

The amendment to increase the board’s projected revenue and spending passed unanimously.

“I’m not one to take risks,” said Bellamy. “But our kids are worth it. And our staff are worth it.”

In comments, board members thanked legislators for their action on a sweeping state education package that passed overwhelmingly in the Alaska House last week and included a historic increase in public school funding.

But by Tuesday, the fate of the bill remained in limbo, casting uncertainty on the school board’s budget deliberations.

In a Tuesday afternoon news conference, Dunleavy said he wouldn’t support the bill unless legislators backed more of his own education priorities, including annual teacher bonuses and a governor-appointed board that could approve additional charter schools.

“It’s half a coin. It’s a three-legged horse, meaning it’s not going to run very far,” Dunleavy said of the bill. Under state law, the governor has until March 14 to sign or veto the bill.

Despite Dunleavy’s comments, board members said during Tuesday’s meeting that they were encouraged by the bipartisan support the bill received; by the fact that Dunleavy did not veto the bill outright; and by the governor’s remarks during the news conference that indicated some support for at least a modest increase to the BSA.

The bill includes a $680 boost to the BSA, which Lessens said would amount to a nearly $50 million increase in funds to ASD and is far more than what board members were counting on when they amended their budget.

Other cuts — including $6 million in reductions for district administration, increased activity and rental fees, fewer options for summer school and less funding for supply purchases — remained in the budget, and board members called the amended version an “imperfect solution” to their financial struggles.

The board’s current budget also includes spending down nearly all of the district’s fund balance, which has grown in recent years, as the district struggles to hire and retain teachers and staff.

“This amendment doesn’t doesn’t solve everything, and do everything I would hope,” Jacobs said. “But it would save valuable and beloved programs our community appreciates, that have positive student outcomes. It also would honor the intent of the Legislature.”

The $8.78 million in the amendment “was the cost of reversing the direct cuts to student instruction,” Lessens said in an interview. “It doesn’t deal with student supplies, it doesn’t deal with the hiring freeze.”

Board members said Tuesday that they would be able to return to their budget through the end of June to adjust any changes in state funding that might occur by then.

The budget will next go to the Anchorage Assembly for a vote in March.