Kodiak school superintendent asks borough to approve $12.98 million request as district faces multi‑million deficit

Cindy Micah, superintendent of the Kodiak Island Borough School District, asked the Kodiak Island Borough Assembly to approve the district’s full FY26 funding request of $12,979,556.50 at an upcoming May 29 meeting, saying the district faces a multi‑million dollar shortfall.

“I want to express my thanks to the assembly for coming together with the board of education in March to discuss the district's budget and the financial challenges facing both our district and the community,” Micah said. She told the assembly the district began the FY26 budgeting process after completing its FY24 audit and that the district is projecting a roughly $10,000,000 deficit for the upcoming fiscal year.

The superintendent said the district took steps to reduce costs, including the Board of Education’s February decision to close North Star Elementary — a measure Micah said is expected to save “approximately $3,000,000, primarily in personnel‑related costs.” The preliminary budget assumes a 3.40 increase to the base student allocation and the use of about $5,000,000 from the district’s fund balance, Micah said. She asked the borough to honor the district’s full ask so essential programs and services can be maintained.

Assembly members and borough staff pressed on how state action and local revenue limits could change the district’s financial picture. Amy (borough manager) and Dora (finance director) explained Maptur, the borough’s maximum allowable property tax revenue calculation, can affect how much property tax the borough can collect and therefore how much it can contribute to the district. Dora said the manager’s proposed budget initially reflected flat funding from the prior year and that the preliminary manager’s budget did not yet include the district’s May 29 increase request.

Assembly members also discussed pending state actions. According to testimony in the meeting, the governor had announced a veto of House Bill 57 the same day the superintendent met with him; if the bill were later overridden, the administration warned it could reduce allocations again in a final budget. The assembly heard that if some increases to the state foundation formula become permanent, roughly 50% of that increase would be committed to employee salaries under existing collective bargaining agreements.

Assembly members urged the borough and school district to begin joint planning for longer‑term financial stability rather than relying heavily on fund balance. Dr. Leduc and other members noted that drawing down fund balance this year (the district described using most of its fund balance to balance FY26) could leave deeper cuts necessary in subsequent fiscal years. Finance staff said the district will need to project two‑ to three‑year impacts and that using several million dollars of fund balance this year will increase the cuts needed the following year.

Micah reiterated the district submitted its preliminary budget on April 30 and said the district’s ask keeps the borough contribution at roughly the same percentage of the borough cap (96.11%). She closed by reiterating the request for the assembly’s support on May 29.

Looking ahead, borough staff said the manager’s level‑2 budget will be updated to reflect assembly direction and anticipated state changes. The assembly will take up the district’s request again at its May 29 work session and at a special meeting designated for the funding decision.

The meeting did not record a formal assembly vote on the district request at this session.