Juneau School District’s $9.5M deficit is ‘severe’ and must be resolved in a short time

By Jasz Garrett

Juneau, Alaska (KINY) – The Juneau School District (JSD) is facing a deficit of more than $9.5 million this year according to a review of the district’s finances published on Friday.

The district’s budget for the current year is about $95 million.

Chair of the Finance Committee on the Juneau School Board, Will Muldoon, said this is entirely unprecedented, and the deficit must be addressed by July 1 of this year.

Muldoon said the size of the crisis is severe for a community like Juneau.

“As our operating fund budget has been between about $68 and $75 million for the last few years. Being off by that amount is pretty substantial. Being 9.5 short it’s about 12 and a half to 13% of a deficit that needs to be worked on before July 1. We’ve never seen deficits of this size nor have we had such little time to deal with them,” he said. “You know, we’re looking at just the deficits, not including fund balance, of $9.5 million. And then just for discussion sake, to kind of help people understand how big that is, in a community our size—we spend a total of $11.2 million on all elementary teachers, and we spend a total of $12.8 million on all middle and high school teachers.”

Numerous reasons for the deficit are recognized, including lower-than-projected enrollment, higher-than-expected staff costs, and an end to some COVID-related and other one-time funding. The one-time funding is only roughly a third of just this year’s problem and less of a third of the total deficit.

Muldoon goes more in-depth on how declining enrollment has impacted the budget.

“We calculate the number of students in October of every year. But we have to have our budget to the Borough Assembly no later than April 5. It’s always based on our projection,” he said. “Our projections were off by 83 students, so, that caused a decrement of roughly $870,000 from state funding just due to enrollment.”

Muldoon also gave comments on higher-than-expected staff costs.

“We had adopted in our budget last year for essential expenditures on educators and classified staffing, principles and assistant principals, cultural education, para-educators, and health services,” he said. “We had approved a total of $30.489 million. And as of last night (Tuesday), the projected expenditures are 35.852 million for a difference. So, we are overspending at this point to the tune of $5.36 million versus the approved budget.”

Muldoon anticipates that “adequate and stable funding for education” will continue to be advocated for this legislative session. He said while reviews will need to occur, he imagines the impacts of the deficit will be large.

“I think at this size, we have to imagine that everything is on the table, including reductions in forced layoffs, and ultimately school closures,” he said. “You know, those are really the only levers that the board has to work with on decreasing deficits because we are unable to increase revenue. And we are already funded to the maximum allowed limit by state law, via our City Assembly.”

The City Charter and Title 14 of the Alaska statute require JSD to maintain a balanced budget on the operating fund. There are also board policies in place that require about 1.5% of the operating fund and fund balance to be kept in savings to accommodate any issues throughout the year.

He said the District can go beneath the 1.5% but it would require an affirmative vote of the board.

Muldoon added that legislators are coming to Juneau for the session whose children are enrolled in JSD. Muldoon said they will notice changes due to the deficits this year and in the coming years.

The School Board held a meeting on Tuesday. They have another meeting scheduled for Jan. 16 at 6:00 p.m. A Finance Committee meeting is set for Jan. 18 at noon. All School Board meetings are open to the public.

The public can always contact the School Board by contacting the central office or emailing schoolboard@juneauschools.org.