A massive school funding shortfall — perhaps the biggest ever for Anchorage — was the topic of a joint meeting held between the Anchorage Assembly and the School Board this week. The district’s elected leaders said schools will be short by $95 million in the next budget year.
The general fund school budget for fiscal year 2025 would be about $649 million to maintain some version of the status quo. But the total budget, including grants and federal passthroughs, is over $900 million. Projections are that the district will have about $554 million to work with.
The shortfall is reminiscent of 2021, when the district faced a $68 million funding gap in its $549.5 million general fund budget.
It’s reminiscent of 2020, when it announced it had $28 million budget shortfall for the 2021-22 school year.
It’s reminiscent of 2015, when the district had a $566 million operating budget and came up $23 million short of the funds the district reportedly needed.
In other words, the budget shortfall is an annual topic in Anchorage schools, where funding is never enough to meet the school board’s needs.
But while costs go up, students performance has gone down. And also going down is enrollment. The Anchorage School District has lost students steadily for decades. In 2002, approximately 50,000 were enrolled. This year the student count — still unofficial until October — is about 42,000, the lowest it has been since 1991. The school district has lost more than 14% in the past three decades.
The school board has so far taken no action to close any schools to consolidate, as the demographics change, however. In fact, it has about $30 million set aside in a pot to pay for repairs to Inlet View Elementary — money that could be used to plug the funding gap. There is also a huge stash of CARES Act money that has to be spent by Sept. 30, 2024, which could be used to plug the gap.
The school district also has numerous unfilled and arguably needed positions that it keeps on the books, and that artificially inflates the budget.
School Board President Margo Bellamy said inflation and inadequate state funding support are the primary reasons the district is in tough financial straits. She wants the base student allocation (BSA) formula increased.
Currently, the state provides a base amount of $5,900 per student, and the school board president says she needs another $1,200 per student. She did not acknowledge that in addition to the BSA funding, the state has regularly provided additional funding outside the formula except in 2016 and 2017. The base student allocation formula is an annual tug of war between union-run schools and the people who fund them.
Per-pupil spending in Alaska exceeds $19,000, with some estimates as high as $21,000. The U.S. average is $14,347, according to the U.S. Census.
State, local, and federal funding for K-12 education in Alaska is $2.9 billion for 115,000 of students in average daily attendance. Of course, 21,000 of those students are in correspondence programs, and those students get only state funding, and no local or federal dollars. The total per student actually attending brick-and-mortar schools in Alaska is about $28,000 per student.
Inflation has affected all government budgets, as well as the household budgets of taxpayers. Since 1990, the U.S. dollar had an average inflation rate of 2.57% per year between, for a cumulative price increase of 125.42%. Today’s prices are 2.25 times as high as average prices since 1991, according to the Bureau of Labor Statistics consumer price index.
Next door in the Matanuska-Susitna Borough School District, there are 19,319 students, closing in on half the number attending in Anchorage. Mat-Su has 47 school locations, compared to the 97 school locations in Anchorage. While its budget of $266 million is adequate to meet expenses this year, it anticipates a shortfall of $10.8 million in 2025, due to rising costs, such as health insurance going up 8% per year, salaries increasing, and utilities costing more.
Although Mat-Su schools are absorbing students whose parents are fleeing the Anchorage School District, the district has no current budget shortfall, and its upcoming expected shortfall is still a fraction of the Anchorage School District’s budget gap.