Kodiak Assembly debates $1.6M school funding increase amid budget crunch

The Kodiak Island Borough Assembly debated Thursday how to balance the school district's request for a $1.6 million funding increase against competing pressures to avoid raising property taxes and preserve funds for major capital projects.

The school district asked for the maximum allowable local contribution, approximately $14.6 million, citing inflation, rising staffing costs, and flat state funding. Assembly members proposed a compromise of roughly $800,000 above last year's contribution, using one-time interest earnings and corrected revenue projections to bridge the gap without forcing immediate cuts to education or borough operations.

Mike Litzow, a Kodiak Island Borough School District board member, told the Assembly that if state funding had kept pace with inflation at current enrollment, the district would receive $7.4 million more from the state this fiscal year. He noted that the local contribution cap would be $1.7 million higher if state aid had kept pace with inflation, meaning the district's request would fall below the maximum under normal funding conditions. Litzow added that in 2011, the inflation-adjusted local contribution was $14.85 million, and the district is asking for $245,000 less than that amount.

Background

Alaska school districts have faced flat or declining state support since 2017, when the Base Student Allocation was set at $5,960 per student. Gov. Mike Dunleavy vetoed a permanent $680 per-student increase in March 2024, forcing districts including Kodiak to continue budgeting under the older, lower BSA. The Kodiak Island Borough Assembly adopted an ordinance in April 2024 increasing the local contribution to the school district, citing rising costs and flat state funding while warning that use of fund balance was a one-time solution.

Superintendent Cindy Micka clarified that the district's FY27 budget does not include technology purchases for iPads, despite public comments suggesting otherwise. She explained that the $1.6 million increase is driven by inflation and staffing costs, not new programs.

Utilities cost more, fuel costs more, professional services cost more, supplies cost more, even basic items like milk and shipping cost more, Micka said. She added that staffing costs, which make up over 80 percent of the district's budget, continue to rise through negotiated collective bargaining agreements that include salaries, health insurance, and benefits.

The district has cut $2.5 million in positions and expenditures this year, but those reductions are largely offset by rising operational costs and contractual obligations. The district is also drawing down its fund balance, using $3.1 million this year and planning to use $1.8 million next year, assuming the borough provides the full requested local contribution, which would leave less than $1 million in reserve.