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Mayor warns of potential school budget shortfalls after district overspent prior year
Summary
In the mayor’s report the borough learned the local school district overspent FY24 by about $1.7 million; that shortfall and other factors could push additional costs into FY26, the mayor said, and the assembly discussed seeking state and federal support while urging the district to reduce spending.
The Ketchikan Gateway Borough mayor told the assembly on Jan. 21 that the borough has new information indicating the school district overspent fiscal year 2024 by roughly $1,700,000 and that approximately $1,100,000 of the district’s current-year budget has been used to cover last year’s overages.
“That will have an impact on the FY24–25 budget because of the cash flow issue it represents,” the mayor said, noting the borough made an emergency loan last year when the district ran short and that unpaid FY24 costs were repaid with FY25 funds. The mayor said those carry-over costs would reduce the district’s FY26 budget unless the district finds additional revenue or spending reductions.
The mayor also summarized recent state and federal budget developments affecting education funding, citing an Alaska Municipal League legislative update and expressing concern that one-time supplemental funding received last year may not be repeated in the governor’s budget. The mayor said the borough will continue advocacy in Juneau and Washington, D.C., while also urging the district and school board to reduce spending now.
Assemblymembers discussed options to address the borough portion of education funding if federal programs such as Secure Rural Schools (SRS) are not funded and noted prior suggestions to allocate other local revenue sources to the local education fund. Assemblymember Thompson said the borough expects a potential loss of about $1,000,000 from SRS funding and that discussions about using PILT or other sources to fill gaps have taken place.
The mayor and assembly scheduled policy-session discussion time with the school board later in the week to review the district’s superintendent plan (referred to by the mayor as a “school grade blocking plan”) and to press for measures that might reduce projected deficits. No new borough appropriation or emergency loan was approved at the Jan. 21 meeting; the session focused on information-sharing and planning for further action.
