Juneau Schools

The Juneau School District can keep $2.3 million in supplemental funding it got from the city this year, but a potential amendment to state code could restrict local funding in the future. That’s according to a letter sent Friday from the Alaska Department of Education and Early Development.

The state sets a limit on how much money a local government can give to its school district. The idea is to make sure districts are funded as fairly across the state as possible. It also helps the state pass the disparity test, a federal rule that saves Alaska millions of dollars in education spending.

The City and Borough of Juneau has funded the district up to the local limit for decades. In the last fiscal year, that maximum — or cap — was about $28.5 million. 

It also routinely funds “outside the cap.” This spring, the Juneau Assembly gave the district $2.3 million to resolve deficits related to transportation, child care and other non-instructional programs. 

In June, the state said the additional funding wasn’t allowed because it went beyond the limit. But the district argued that the cap only applies to instructional costs, and the $2.3 million paid for non-instructional expenses. That money went into separate funds from the operating fund, which pays for things like teacher salaries.

Will Muldoon, who chairs the school board’s finance committee, said this hasn’t been an issue before.

“The state had stated that we had violated, perhaps the spirit if not the letter, of local contributions,” he said. “That caught us by surprise a little bit. These are things Juneau has consistently done.” 

In her latest letter to the district, DEED School Finance Manager Lori Weed wrote that a city or borough’s local contribution isn’t limited to the district’s operating fund. DEED wants to make that clear in an amendment to state administrative code, she said.

“Of course, any proposed regulation project must go through the required procedures under state law, including a mandatory time period for public comment, and it would ultimately be up to the State Board of Education and Early Development to consider public comment and vote on whether they would adopt any regulation change,” she wrote.

Weed said DEED would request any amendment take effect for the fiscal year 2026 budget cycle. In the meantime, the Juneau School District can keep the $2.3 million from the city.

“DEED will honor JSD’s interpretation of ‘local contribution’ as only including appropriations to or funds reported in a school district’s operating fund, until a new regulation takes effect, if ever,” Weed wrote.

Muldoon said he doesn’t expect the school board to change how it requests city support for non-instructional costs next year.

“I don’t think it would be prudent for us to make large scale changes of behaviors on unknown proposed code that will most likely not be in effect during that time,” he said. “That being said, we probably only have a year to really figure out what that means.”

The district is already facing a nearly $3 million deficit in its operating fund, between unexpected expenses at the end of the last fiscal year and lower enrollment. Muldoon said the district is also expecting a $2.9 million reduction in revenue next year, as COVID relief funding and one-time state education funding run out. 

Salaries and insurance are also expected to cost more next year. Muldoon thinks the total budget shortfall is around $7 million. That’s about 10% of this fiscal year’s budget.

“We have very few levers as a district and as a board that we can work with,” he said. “We do have some vacancies right now that are saving us a little bit, but that’s also a strain. We budget positions because we need them.”

Muldoon said the pupil-to-teacher ratio is the main lever the district can pull. While it doesn’t translate exactly to class size, increasing the ratio usually does lead to more students in each classroom.

A permanent increase in state funding would help districts across the state avoid reducing staff, cutting programs or increasing their pupil-to-teacher ratios. The Alaska Senate passed a bill to increase per-student funding for education last session, and the session ended with the bill in the House Finance Committee.

Gov. Mike Dunleavy is set to share his proposed budget by the end of next week. His budget last year included just a $30 increase to the base student allocation.

An audit of the Juneau School District shows it ended the last fiscal year with an almost $2 million deficit in its operating fund, up from $1.2 million at the start of the last fiscal year.

On top of that, lower-than-expected enrollment this fall has now grown that deficit to nearly $3 million.

In the coming weeks, district leaders will look for ways to address it.

Audit shows procedural and accounting problems

The audit, which was presented to the board on Tuesday, said district administration violated city and school board policies by spending more money than the board had budgeted without getting approval from the board and city first.

“You spent more than the board had approved and more than CBJ had approved, so that’s where the noncompliance came into place,” Karen Tarver, a partner with auditing firm Elgee Rehfeld, said at the school board meeting.

Cassee Olin, the district’s administrative services director, said the district faced several unexpected costs at the end of the last fiscal year, including some related to its contract agreement with the teachers union. She said the district is now providing the school board with monthly financial reports.

The audit also noted issues with implementing new accounting standards, maintenance of student records and Medicaid billing. Olin said administrative staff are training staff on the new standards and analyzing whether the district should continue to bill for Medicaid services.

Lower enrollment makes deficit grow

Meanwhile, the number of students in the district continues to shrink, causing the operating fund deficit to grow even more.

The district projected that 4,240 students would attend Juneau schools this year. But after schools counted the number of students attending throughout October, the average daily number of students the district submitted to the state was 4,114.

State funding for the district is based on enrollment, and a 126-student gap equals about a $1 million loss in projected revenue. 

That could shrink slightly after state education officials make adjustments based on factors like school size and the number of students with intensive special needs. Superintendent Frank Hauser said the school size factor, which gives more state funding to smaller schools, might benefit the district in the final funding calculation.

“When we start looking at final numbers, there could be some increases for the school size factor calculation for some of our schools, because we do have a little bit lower enrollment numbers,” he told the school board. 

The district will get that adjusted number from the state in December.

Board to address this year’s gap

Between the costs at the end of last year and declining enrollment, the district faces a nearly $3 million deficit in its operating fund. 

The operating fund, which includes state and city funding, pays for salaries and benefits. The district also has a special revenue fund, which can only be spent on specific things; a capital project fund, which pays for building repairs and maintenance; and a permanent fund.

The district can’t move money from its special revenue or capital project funds into the operating fund. And the city has already funded the school district to “the cap,” a limit to local funding set by the state.

That means district leaders will have to find other ways to address the deficit.

Earlier this year, the Juneau School District found itself with a $758,000 funding gap when Gov. Mike Dunleavy vetoed half of the one-time education funding approved by the Alaska Legislature. They addressed it by eliminating two staff positions and paying for four teaching positions with pandemic aid instead of operating funds.

The school board will start to review potential budget revisions for this fiscal year at their next meeting on Dec. 12.

Work on next year’s budget will start soon, too. Board President Deedie Sorensen said districts across the state are facing budgeting challenges as they look ahead to next year. She and other board members attended an Association of Alaska School Boards conference last week.

“I don’t think I talked to anybody, in any district, who isn’t really behind the 8-ball,” Sorensen told the board.

In Anchorage, district leaders may have to increase class sizes or cut certain programs to make up for a $95 million deficit. The Kenai Peninsula Borough School District expects to start the next fiscal year with at least a $13 million deficit.

All of the candidates running for Juneau School Board this year cite state education funding as a top concern. 

Budget cuts and stagnant funding at the state level have burdened school districts in Alaska for years. This year, the Juneau School District found itself with a $758,000 shortfall when Gov. Mike Dunleavy vetoed half of an expected one-year funding boost. 

Meanwhile, the state education department notified the district that it could not use supplemental “outside the cap” funding from the city to fill budget holes — a practice it’s relied on for years.

Two seats with three-year terms are open on the school board. Two of the candidates are educators, and all three have children attending Juneau schools. 

Britteny Cioni-Haywood is an administrative operations manager for the state and an adjunct professor of economics for the University of Alaska Southeast. She said the district’s struggles with teacher recruitment and retention all tie back to state funding, which is becoming a “critical mass issue.”

“It is also somewhat outside of the school board’s power, per se, but given our proximity to the state capitol, I think it will be important for us to advocate and encourage all of our friends and family to advocate as well for that funding,” Cioni-Haywood said in an interview. 

David Noon is a history professor at UAS and served as faculty senate president two years ago. In that role, he responded to budget cuts to the state’s university system. He said inadequate funding for public education has brought teachers and staff to a breaking point.

“We’ve endured a lot of cuts beyond the point at which the district can successfully fulfill its mission to our students, which is the most important job our community has before it,” Noon said in an interview. “So addressing the funding crisis, resolving the budget deficit is obviously going to be a top priority.”

Paige Sipniewski also works for the state and is a lifelong Juneau resident. She said while the district needs to address issues like lower enrollment and rising costs, she also wants to focus on improving student achievement in math, reading and writing. And she says any increase in state funding needs to be tied to that.

“An increase also needs to increase our children’s test scores, and we need to see an improvement along with any funding that’s going to be increased in the test scores,” she said in an interview. 

One area where this year’s candidates differ is in allowing transgender students to use bathrooms and play on sports teams that match their gender identity. In interviews, Cioni-Haywood and Noon both said they believe students should be able to express themselves as they wish, while Sipniewski said she believes in “protecting girls’ innocence” by not allowing transgender children to use the same bathrooms or locker rooms as them. 

“Little girls should not have a transgender girl in the bathroom or on their sports teams because there is a biological difference, and I don’t think it’s appropriate for kids to be changing in locker rooms or using bathrooms with girls,” Sipniewski said. 

During a Juneau Chamber of Commerce candidate forum earlier this month, the school board candidates also differed on the district’s policy regarding which books should be available in school libraries. Cioni-Haywood and Noon said they support the current policy. Sipniewski said she opposes “anything regarding gender, sex, religion, profanity, drug use, race — as far as literature for kids in school.” 

Longtime school board member Brian Holst originally filed to run for reelection this year, but later withdrew his candidacy. He told the Juneau Empire he wanted to give other people a chance to serve on the board. Board member Martin Stepetin Sr. did not file to run for reelection.

Voting in this year’s local election ends Oct. 3. 

KTOO’s Katie Anastas contributed to this story.

At a forum hosted Thursday by the Juneau Chamber of Commerce, candidates for the school board and Assembly shared their views on education funding, staff retention and whether to build a new city hall.

Three candidates are vying for two open school board seats: Britteny Cioni-Haywood, David Noon and Paige Sipniewski. They discussed state funding, student enrollment and teacher retention.

For the last several years, district leaders throughout the state have called for an increase to the base student allocation, part of a formula that determines how much money per student districts get from the state. It hasn’t increased substantially since 2017, and inflation has driven costs up. This year, the Alaska Legislature approved a one-time funding increase, but Gov. Mike Dunleavy vetoed half of it. And most recently, the state education department went after the school district for the supplemental funding it received from the city.

School board candidate Paige Sipniewski said a funding increase should be tied to academic improvement.

“If we have decreased enrollment, we can’t just keep throwing money at the problem,” she said. “We can’t advocate for a $1,000 increase to the BSA with no improvement to our kids’ test scores and education.”

But candidate David Noon said improving academic performance requires hiring and keeping teachers so class sizes can stay small, which can’t improve without more funding. 

“Without increased school funding, we’re going to continue having problems recruiting and retaining teachers,” Noon said.

When asked how the district should decide which books should be available in libraries, Noon and Britteny Cioni-Haywood said they were happy with the board’s current policies.

“I think that there should be a vast range of options for children,” Cioni-Haywood said. “One of the things about reading is you really need to connect with it, so having those options for all children is important.” 

Sipniewski said she thinks parents should be able to have a say in what books are available in school libraries.

“I am completely against anything regarding gender, sex, religion, profanity, drug use, race — as far as literature for kids in school,” she said. “We have public libraries. They can go check out books there or their parents can if they want their children reading that.”

Candidates for Assembly Districts 1 and 2 were also at the forum.

Two candidates are running for each district Assembly seat. Joe Geldhof is running against incumbent Alicia Hughes-Skandijs for District 1, and David Morris is running against incumbent Christine Woll for District 2. Juneau voters can vote in all races on the ballot – the districts depend on where the candidates live.

The city is asking voters to fund a new city hall through a $27 million bond. Voters rejected a $35 million bond proposal for the project last year. This time, the city put $10 million toward the project to bring the size of the bond down. They’re also spending $50,000 to advocate for the project.

District 1 candidate Joe Geldhof said building a new city hall would be a misuse of public funds.

“There’s a lot of talk here among the Assembly and in the community about housing, housing, housing – so what are we going to do? We’re going to build a new city hall,” he said.

But incumbent Alicia Hughes-Skandijs said repairing a building that doesn’t fit all city workers and continuing to rent other office space doesn’t make financial sense.

“And speaking of housing, some of the space we’re renting could be returned to residential apartments,” she said. “We’re going to spend public money either way.”

Assembly candidates also discussed turnover among Bartlett Regional Hospital leadership. Last month, Bartlett CEO David Keith announced his retirement and CFO Sam Wise announced his resignation.

Incumbent Christine Woll said the Assembly needs to support the city-owned hospital’s board.

“We’re lucky to have a strong and stable board for Bartlett right now, but we always have challenges recruiting members to serve on public boards in the city,” she said. “We need to keep making sure that we have engaged citizens willing to serve on that board.”

Woll’s opponent, David Morris, agreed that the Assembly should work closely with the hospital’s board. But more broadly, he said, he doesn’t think the city should be running a hospital. 

“I think the city should not have a hospital,” he said. “I think it should be privatized.”

Other communities in Southeast Alaska have debated whether to continue running city-owned hospitals or allow the Southeast Alaska Regional Health Consortium to build and operate one instead. 

Thursday’s forum was the latest in a series of public events featuring municipal candidates. The Juneau League of Women Voters, KTOO, the Juneau Empire and KINY will co-host forums on Sept. 12 and 13. The Chamber will host candidates for the areawide Assembly seat at a forum on Sept. 14.

The Juneau School District’s budget for next school year may take a $2 million hit.

The City and Bureau of Juneau and the Juneau School District got a letter from the state that says it can’t use outside-the-cap funding to supplement the district’s budget. 

Alaska’s school funding formula allows local governments to add to the school budget with their own money, but only up to a certain amount. Juneau contributes the maximum each year. 

‘Outside the cap’ funding is money the city gives to a district beyond that amount. Last year, that money was used for non-instructional things, like transportation and sports. 

The district has been using outside the cap funding for years, as do other districts in the state. Last year, the Juneau Assembly gave the school district $2.3 million to fill a budget deficit. For the 2024 fiscal year, which just started, the district received about $2.3 million in outside-the-cap funding from the city again. 

The city received the letter on June 29, one day before the end of the 2023 fiscal year. This left little time to resolve the gaps that could be created by not using outside the cap funding.

The Juneau Empire reported on the letter Wednesday. Reporter Clarise Larson sat down with KTOO’s Yvonne Krumrey to talk about what this might mean for Juneau’s schools. 

This interview has been edited for length and clarity.

Yvonne Krumrey: Did the district request that money from the city originally?

Clarise Larson: Yeah.

Yvonne Krumrey: So why did they request that money?

Clarise Larson: Because they needed to get to zero. When the school district goes into a fiscal year, they have to pass a balanced budget, right? In order to balance this budget they needed — they would have to do a lot of digging, or they could, you know, utilize the outside of the cap funding mechanism. In this case, that was for $2.3 million. That paid for — $1.3 million of that was towards transportation deficits, which is happening all across the state, a lot of districts are struggling with transportation funding because it’s been flatlined for years — $750,000 goes towards RALLY, the after-school childcare program, $60,000 toward new wrestling mats. So none of those are instructional. 

Yvonne Krumrey: So this money has already been spent. It’s not like they can like take it back. It’s been spent for the 2023 year.  

Clarise Larson: Yes, that $2.3 million has been used. Now, the letter says, the letter points to that $2.3 million and is like, Hey, that’s not okay. We’re not going to make you pay that back. But what we are going to do is, say, going into fiscal year 2024. So starting on July 1, you can’t do it anymore. But when the school district or when the Assembly passed their budget, in June, it included $2.28 million for fiscal year 2024 outside of the cap funding. That leaves a $2.2 million hole in the fiscal year 2024 budget for the school district. So they’re gonna have to build they’re gonna have to make those funds up. 

Yvonne Krumrey: Ok. And can I ask, though, you explained what the non-instructional funds have been used for in this instance? Why are they an issue with the state? Like, why do they care that the outside the cap funding is being used on non-instructional things?

Clarise Larson: And that’s kind of the golden question that we tried to dig into with the state, right? We found out about this letter later in the day. And a lot of the reporting we did yesterday was within hours. And so we really didn’t have much time to talk with the state about this. In recent years, the state has failed federal disparity tests due to the districts allocating “special revenue funds.” In this case, outside of the cap funding — or you know, another word for it — for the purpose of, you know, like pupil transportation, stuff like that. But this is the disparity test. The disparity test is a little-known rule involving areas affected by federal impact aid, which for Alaska means, proving there’s less than a 25% funding difference between the highest and lowest funded districts in the state. 

Yvonne Krumrey: So essentially what the state is saying is that this extra outside-the-cap funding, even if it’s going towards non-instructional purposes, is creating further inequity between Juneau school districts and the ones that have less money to work with.

Clarise Larson: I don’t really know. That’s the whole thing. It’s like, this is so messy. It’s a difficult thing to understand — why now, right? Why now are they are doing this? We don’t, we don’t have an answer for that yet. We’re trying to figure that out. Likewise, our school district and city officials right now are trying to figure (it) out.

Yvonne Krumrey: And that comes back to what I’ve been most curious about — what does this mean for Juneau schools right now?

Clarise Larson: It means a lot of unknowns. It means a lot of uncertainty. Because if you look at the letter, it’s a one page letter — doesn’t really get into detail about questions that I have, the questions that the school district have, that the attorney has, you know, city attorney, a lot of questions remain unanswered. A lot of people are arguing ‘this isn’t applied to the cap at all.’ This is completely separate, you know? The cap doesn’t apply. A lot of people are having that argument. That’s why so many school districts have done this because they have, you know, for whatever reason, thought that the cap doesn’t apply, but the state the state is arguing otherwise, why they’re arguing that there’s a lot of reasons that we don’t know yet.

Yvonne Krumrey: Well, thank you for taking the time to speak with us.

Clarise Larson: Thank you for having me. 

Juneau elementary school students will end the day a half hour early on Mondays next year.

According to a plan approved by the Juneau School Board on Tuesday, elementary schools will release students at 2 p.m., and optional programs will get out at 2:30 p.m. The early dismissal will give teachers an hour-long block of time every Monday to work collaboratively. 

District leaders say it will help elementary school teachers meet the new requirements of the Alaska Reads Act, which include teacher training, student testing and contact with parents.

The school board previously discussed having students at all grade levels start half an hour later on Wednesdays. But many parents said the late start in the middle of the week would disrupt their work commutes and kids’ sleep schedules.

School Board member Brian Holst urged fellow board members to limit the early dismissal to elementary schools.

“I think it’s an important step in supporting the Alaska Reads Act that doesn’t go as far as changing the schedule for all of our students,” he said.

Juneau’s new Superintendent Frank Hauser said the new schedule won’t increase transportation costs, as long as all elementary grades participate.

“When we look at scheduling the buses to make sure it’s feasible and there is no additional cost, it has to be the whole school,” Hauser said.

Board members had also wanted to ensure kids could still attend RALLY, the district’s afterschool child care program, during the extra half hour of teacher work time. Administrative Services Director Cassee Olin said RALLY staff begin work at 11 a.m., so they’ll already be there when students get out early on Mondays. That also means parents won’t be charged for the additional half hour of child care.

Board member Elizabeth Siddon said the decision balanced teachers’ needs for time to meet Alaska Reads Act requirements with parents’ needs for childcare.

“I think that this solution is a much more targeted solution to the problem we were trying to address,” Siddon said. “My hope is that this is sort of a win-win-win for everyone.”