Anchorage School District warns of $75M shortfall, asks assembly to press state on proposed local contribution rule

Anchorage — Anchorage School District officials told a joint meeting of the Anchorage Assembly and the Anchorage School Board on Sept. 26 that the district closed FY26 with a $700 base student allocation (BSA) increase but remains dependent on reserves and faces a roughly $75 million projected shortfall for FY27. Andy Ratliff, the district’s chief financial officer, outlined last year’s budget changes, the effects of HB 57, and an uncertain regulatory change at the state level that could reduce up to an estimated $15 million in local support for transportation and other programs.

The district emphasized the scale of the problem and asked the assembly to press the State Board of Education to delay implementation of the new regulation. “We are requesting the assembly’s help in advocating for a sensible way forward, which is to postpone discussing this until further notice,” Dr. Bryant, the district superintendent, said during the meeting.

The BSA increase in HB 57 provided a one‑time $700 per student lift for FY26 and a $48 per‑pupil increase in transportation funding, Ratliff said. The school board allocated the $700 in stages: earlier memos used about $560 per student to restore some position reductions and the remainder was allocated after the veto was overridden in August. That funding allowed the district to add back holdback positions — unhired budgeted positions that principals can fill as enrollment or class‑size pressures require — and to restore some nurses, counselors, librarians and other staff that had been cut earlier in the year. “For the record, I’m Andy Ratliff, the CFO,” Ratliff said when presenting the FY26 close‑out and FY27 outlook.

Even with those add backs, Ratliff said the district cut about 136 permanent and contracted positions during FY26 and trimmed millions from services, supplies and maintenance to balance the budget. Of those cuts, 87 were school‑based — including classroom teachers, principals, librarians and nurses — with about 31 removed from administrative functions such as finance, HR and IT. The budget documents Ratliff referenced show a FY26 budget of about $644 million, of which “almost $50 million” came from reserves.

Enrollment fell to just under 42,000 students — roughly 850 fewer than a year earlier and about 650 fewer than projected — which the district estimates could translate to roughly $4 million to $6 million in lost revenue depending on the October OASIS count. Ratliff said the district currently had several waves of holdback teachers added back across schools and that, as a budgeting matter, “we still currently have 8 that are unfilled or un unallocated at this point that are unhired.” Board members pressed staff for counts of persistently large classrooms; School Board Member Silvers asked whether any elementary classes still exceed 35 students, and staff said they did not have that exact school‑by‑school count available and would provide it later.

District leaders warned of an additional, separate risk from a proposed State Board of Education regulation that would change how “local contribution” is defined for school operating funds. The proposed guidance would treat transportation, student nutrition and certain grant funds as operating funds subject to the state’s local contribution limits, Ratliff said, and could mean Anchorage could not accept about $15 million of local support the municipality currently provides to transportation and pre‑K. The regulation would also remove a definition limiting appropriations to funds provided by the city or borough and would make in‑kind services harder to classify, the district said, creating ambiguity about whether items such as school resource officers or donated services would count against local contribution caps.

“We could very well be” forced to cut bus service and other programs if the rule goes into effect immediately, Dr. Bryant said, asking the assembly for help reaching the State Board to request more time and clarity. Assembly members said they would consider drafting a resolution and requested the district share a written advocacy strategy. Chair Constant and other assembly members said they were prepared to work with the district on messaging and to ask the State Board for delay.

Ratliff also flagged other FY27 uncertainties: contract negotiations with teachers and other bargaining units, possible changes to federal titles and grants, and an H‑1B visa proposal under federal consideration that could increase costs for a small number of district teachers if it were to impose new fees. “If it’s a 100,000 a person per year, then that gets really, really pricey,” Ratliff said, and staff said they had seven H‑1B teachers currently in the district.

The conversation closed with no formal vote on a budget resolution. The only formal procedural actions during the joint meeting were the unanimous approvals of minutes and of the amended meeting agenda earlier in the session. Dr. Bryant and Ratliff asked the assembly for prompt advocacy with the State Board if members share the district’s concern; assembly members suggested preparing written materials and a resolution option to consider at the assembly’s next meeting.

The district plans to publish a fuller FY27 pro forma and to release an online balancing tool this fall that will let the public view levers the district is considering to manage the projected shortfall.

About the reporting: Ratliff presented the FY26 close‑out and FY27 outlook and provided the figures above; Dr. Bryant and board members described the operational impacts and requested assembly assistance with the state rulemaking process. The district said the October State Board meeting is the near‑term point at which regulatory change could be adopted.

For follow‑up: the district said it will provide an itemized school‑level count of large classrooms and the number of schools still above 35 students where requested.