Gov. Mike Dunleavy has indicated he is willing to accept a one-year increase in state money for schools as legislators work toward a $175 million addition to the funding formula before their scheduled adjournment deadline May 15.
The increase would cover almost two-thirds of the projected revenue gap in the Wrangell School District operating budget for the 2024-2025 school year.
Districts statewide face significant budget deficits after more than seven years without an increase in the state’s per-student funding formula.
Though both the House and Senate have approved $175 million in one-time money for school districts, the two chambers have passed differing versions of the state budget for the fiscal year that starts July 1. Those differences will go to a conference committee to negotiate a final package acceptable to a majority of the two chambers.
The governor last year vetoed half of the legislative appropriation of one-time aid to schools, and earlier this session vetoed a bill that included a permanent increase in the state funding formula.
But Dunleavy in a news conference on May 1 signaled he may not repeat his vetoes. “I’ve told people I’m open to the increase,” he said, “an increase in one-time funding, especially to help with the inflationary issues.”
While it would provide significant help to cash-short school districts, the $175 million in one-year funding covers a little less than half of the inflationary loss to districts since the state last increased the formula.
The $175 million would provide about an 11% increase in what’s called the base student allocation.
If approved in the final budget and signed by the governor — assuming Wrangell’s enrollment holds steady at around 260 kids — the district would receive about an additional $440,000 in state funding for the next school year. The money would reduce the need to draw on reserves to balance spending for the 2024-2025 school year.
The district’s $6 million operating budget for next year assumes taking about $687,000 from reserves, unless the state comes through with more funding. State dollars provide more than 60% of the district’s revenues, with the borough at about 30%.
In addition to looking for more state help with its operating expenses, the district and borough are hopeful their request for state grant funds for long-needed repairs to school buildings will win approval from the Legislature and governor.
Wrangell is No. 16 on a statewide list of about 100 major school repair and rebuilding projects. The governor’s budget proposal covered only the top two schools on the list; the Senate version of the state budget covered through No. 15. But the House Finance Committee last week added enough money to get to No. 26.
If that number wins final passage and survives a veto, Wrangell would receive $6.5 million to combine with the $3.5 million voters approved to borrow in 2022 to pay for $10 million in repairs to all three schools in the community, fixing or replacing roofs, heating and ventilation systems and controls, windows, siding, insulation and other parts of the decades-old buildings.
In a separate grant program, the borough earlier this year received $695,000 in federal funds allocated by the state which will go toward a new roof on the Stikine Middle School.
Wrangell’s legislator in the House, Ketchikan Rep. Dan Ortiz, who serves on the Finance Committee, said he is hopeful that the money to reach far down the list of major maintenance projects — including Wrangell’s work — will survive budget negotiations.
Besides ongoing budget negotiations between the House and Senate, a possible veto by the governor is a big unknown. Dunleavy the past three years has used his veto powers to eliminate or significantly reduce legislative appropriations for school repairs.
Ortiz said lawmakers have not received any assurances from the governor that he would leave untouched the additional spending on maintenance and repairs. The House Finance Committee action puts the total appropriation at almost $63 million, far more than has been spent in any year going back at least a decade.
For now, with increased state aid for school district operating budgets and so many repair projects funded under the latest spending plan from the House Finance Committee, Ortiz is calling it “a really positive year for education.”
“I’m feeling more hopeful than before,” Wrangell Schools Superintendent Bill Burr said May 2.
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