Q&A: Issues surrounding the Anchorage School District budget crisis

AnchorageJanuary 21, 2014 

Anchorage School Board President Tam Agosti-Gisler mentions an upcoming community organizing meeting to support public schools as she and Superintendent Ed Graff discuss the proposed 2014-15 school budget at Anchorage School District headquarters on Tuesday afternoon in East Anchorage.

ERIK HILL — Anchorage Daily News Buy Photo

The Anchorage School District announced dramatic cuts to personnel and programs on Tuesday. Below are some issues residents may be wondering about concerning the district's finances. 

HOW DOES THE SCHOOL DISTRICT SPEND ITS MONEY?

The district's overall budget is $859 million, said finance head Mark Foster.

The operating budget (the cost of running schools on a day-to-day basis) makes up the biggest piece: $566 million.

Most of that -- about 88 percent -- goes toward salaries and benefits.

Other big-budget items include $45 million, almost all from federal grant money, spent on "title" programs. There's also $87 million for debt service, in which the district repays money it has borrowed to build and remodel schools. (More than half of that is reimbursed by the state.)

A capital projects budget typically comes from legislative grants and amounts to anywhere from $6 million to $12 million a year, Foster said.

Beyond that, there's food service (about $19 million) and student activities (roughly $7 million).

There's also the $122 million -- about 14 percent of the overall budget -- that the Legislature appropriates on behalf of the Anchorage School District to pay down pension liabilities for public employees.

That money shows up on ASD accounting books, even if the district never sees any of it.

"We have no control over it. We don't touch it," Foster said.

WHAT COSTS ARE DRIVING BUDGET SHORTFALLS?

The district says a combination of inflation and flat or declining funding is putting it in a chronic financial bind.

Foster cites several major cost increases:

-- Explosive growth in costs associated with employee health care benefits, topping 16 percent in a year.

-- Energy costs for the more than 7 million square feet of space the ASD occupies.

-- Greater liability expenses in the form of insurance and litigation. "People sue us for various claims and injuries," Foster said. "And the cost for litigation and claims continues to go up."

-- Increases in costs associated with Internet bandwidth.

The district receives the maximum local property tax contribution under state law, about $194 million or 34 percent of the budget.

Federal funding, which makes up about $45 million of the operating budget, has been in decline in recent years, a result of the ending of recession-era stimulus programs and "sequestration" reductions, Foster said.

WHY IS THE DISTRICT SPENDING FOR CAPITAL PROJECTS WHILE LAYING OFF TEACHERS?

Some students, teachers and parents have asked why there is money for projects like turf fields at high schools and a $2.2 million stadium at South High while teachers are being laid off.

The answer, according to the district, is that money for such capital projects comes to the district through a different process and can't legally be used to pay for teachers or operate schools.

The state provides money for capital projects through legislative grants, which are solicited by legislators on behalf of their constituents, Agosti-Gisler said.

"The district could say no (to state grant money) as a legal matter," Foster said. "As a political matter I don't believe any boards have said no to a legislative grant."

District properties should be maintained and updated, Agosti-Gisler said.

She believes the district needs more money for day-to-day operations but should be careful about capital spending projects whose costs might bleed over into the operating budget, she said.

"Our appetite (for capital projects) has been voracious during our boom years," she said. "We need to learn to live within our means, while meeting our constitutionally mandated responsibilities to provide an education for our future leaders.

WHAT HAPPENS NEXT?

The School Board will review the budget at its meeting on Thursday. It will hold its first official reading on Feb. 3 and vote on the budget at its Feb. 20 meeting.

Members of the public can testify at all of the meetings.

On Saturday, Jan. 25, community members will hold a "Take Action to Support Public Schools" meeting at Winterberry Charter School from 10 a.m. to noon, according to a flyer circulated this week. Winterberry Charter School is at 4802 Bryn Mawr Court in Anchorage.

-- Michelle Theriault Boots

 

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