By DAVID BOYLE
We have heard that the Anchorage School District is suffering from a huge budget hole of $95 million brought on mostly by using one-time federal funds to pay for recurring costs, such as salaries and benefits.
But really, how deep is this budget hole?
Let’s look at the facts.
Many of these facts are found in the ASD’s Annual Comprehensive Financial Report which contains myriad financial data. This is an audited report that has been approved by the school board. The most recent AFCR covers the period July 2022-June 2023.
The most startling information in the report is that the district really doesn’t have a budget hole.
As a matter of fact, it has $118,892,417 as an unreserved balance in its general fund. The general fund funds day-to-day operations of the district. This is the district’s piggy bank that holds unallocated money that can be used for almost anything.
Current year expenditures in the general fund total $551,825,263. These numbers can be seen on page 268, Table AD of the ACFR:
So, the ASD has an unreserved balance of 21.55%, ($118,892,417/$551,825,263), far exceeding the 8% balance set by the school board’s policy. An 8% balance would be $44,146,021. The excess surplus (above the 8%) is $74,746,396.
The board could even set the minimum unreserved balance at 5% which would be $27,591,263, leaving enough to backfill the so-called $95 million budget hole.
Because the State doesn’t want school districts to hoard money in their reserve funds, it sets a cap of 10% unreserved funds balance under the Public School Foundation Formula policy. But the State has waived this 10% fund balance cap through fiscal year 2025 due to Covid.
Why does the ASD have such a large unspent balance of money in its piggy bank?
The district says that the very large unreserved funds balance is due to higher than normal vacancy rates and attrition rates. The fewer students, the less the need for teachers and thus the lower the costs.
But wait, there is even more money in the ASD seat cushions.
The district could save about $50 million by not rebuilding the Inlet View School.
Or if it remodeled the school at a cost of $24 million, it would still save nearly $26 million.
But wait, there’s even more money in the ASD seat cushions.
At its Dec. 5 meeting, the board will vote on a new teachers’ contract. This will provide a 3% raise to AEA teacher union members. This would add considerably to the overall cost of salaries and benefits, which accounts for 85% of the district’s operating budget.
Additionally, the district has “negotiated” to provide an increase of $150 monthly to the teachers’ union members for healthcare. This would bring the cost to the taxpayer to $22,800 per year per union member for healthcare insurance.
With approximately 3,000 members, the Anchorage teachers’ union would add another $5.4 million to the district’s cost.
So, maybe the budget hole isn’t as deep as the district and school board say. Maybe, just maybe, the district has enough money hidden in its seat cushions to backfill the hole. But instead, the school wants you to think the hole is huge—and it can only be filled by the state legislature giving them more of your money, including your PFD.
You can testify in person or provide written testimony at the ASD school board meeting this Tuesday, Dec. 5 at 6 pm.
