Anchorage School District finance committee hears $77 million shortfall; members weigh closures and four‑day week

The Anchorage School District Board Finance Committee met Dec. 18 for a budget update that staff said begins from a roughly $77,000,000 projected general‑fund shortfall for FY27 and will require significant spending reductions or other revenue steps to balance next year’s budget.

At the meeting, staff walked the committee through the district’s contracted‑services line — described in the presentation as “a little over $60,000,000” — and the major components that comprise it: legal fees, utilities (electric and heat called out as the largest shares), student travel and stipends, building custodial and maintenance contracts, instructional contracted services (audits, demographers, interpreters) and technology maintenance agreements. The presenter said one instructional contracted‑services object code alone is “a little over $9,000,000,” and that correspondence allotments account for about $4,000,000 of that amount.

The district’s chief information officer, Mike Blakenstein, told the committee the technology and security portion of the contracts includes roughly 137 software packages and rising security and data‑center costs. “We have millions of attempts per day to get into our systems,” Blakenstein said, adding that the district stores backups across multiple global data centers so data can be restored if systems are compromised.

Staff also flagged program‑level costs and revenues. The presentation listed UAA tuition for middle‑college courses at about $1,700,000 and said the district currently generates a little over $4,000,000 in revenue for an AMCS program while the direct budgeted cost was about $2,900,000. The presenter noted that those figures do not capture students who are enrolled in AMCS but take classes at neighborhood schools.

Committee members pressed on what in the contracted‑services total is discretionary. Staff said many contracted positions — particularly special‑education providers such as psychologists and speech‑language therapists — are effectively school‑level services and not easy to cut centrally, and that the district conducts annual internal reviews of contracts during budget development.

Staff walked the committee through results from the district’s public budget‑simulation tool, which opened longer than last year and drew nearly 400 submissions. The presenter summarized that most respondents were parents and staff (about 66% combined) and that balanced solutions in the tool overwhelmingly relied on expenditure decreases rather than revenue increases. The tool’s submissions most often recommended class‑size increases as the largest dollar‑saving measure; the presenter also said 85% of simulation respondents recommended closing two schools as a path to balancing the budget.

Board members debated several of the options surfaced by the simulation. Member Bellamy urged the administration to examine program consolidation and temporary co‑location of programs as a way to preserve services while reducing costs, noting examples in the district’s history where programs were moved without eliminating services. “That might help diminish the reliance on holdback features,” a board member said, proposing temporary moves of programs to balance student placement and staffing for a year.

Other members raised equity, legal and practical questions about closures or a four‑day school week. President Jacobs said any serious discussion of a four‑day week must account for what families would do on the fifth day, calling childcare and family impacts “a big obstacle that I can’t imagine how a school district could generate a plan for quickly.” A staff member cautioned that some state rules about school closures require multi‑year commitments and that temporary closures could trigger regulatory and funding complications; the presentation noted a multi‑year closure period was a constraint staff would need to navigate.

The committee also reviewed a very high‑level six‑year outlook. Staff said that under a pro‑rata cut scenario and flat funding, FY27 could require nearly 700 position reductions as a rough projection, and that projections beyond FY27 showed ongoing pressure from inflation and potential enrollment decline.

Several members requested follow‑up data before any decisions: more precise local building capacity and utilization figures rather than relying solely on state counts, an accurate accounting of contract employees who function like regular staff, and legal clarifications about the limits on reducing special‑education services. The presenter agreed to provide additional breakdowns and to bring more detail to future meetings.

The committee set a short calendar for continued work: a January 22 finance committee meeting and a deeper budget discussion scheduled for Feb. 12 to coordinate with the budget advisory committee. Staff and board members said they will continue to analyze discretionary contract lines, facility‑use and consolidation options, and the simulation comments before making formal recommendations.

The finance committee did not take any formal votes at the Dec. 18 meeting; it recessed after asking staff to return with the additional analyses and legal clarifications requested by members.

Ending: The next scheduled finance committee meeting is Jan. 22; a fuller budget discussion with the budget advisory committee is scheduled for Feb. 12, where staff will present follow‑up information and the committee will continue deliberations on options to close the FY27 gap.