FAIRBANKS — In the weeks following Gov. Sean Parnell's fiscal year 2015 budget proposal on Dec. 11, school districts around the state have begun creating its own budget projections to find out how worried they should be.
The governor's budget funds the Foundation Program -- the formula from which school districts receive the majority of their funding. Despite the proposal fully funding the program, educators and some legislators say the governor's budget falls seriously short of the needed mark.
"We anticipate a very large deficit," said Fairbanks North Star Borough School District Superintendent Pete Lewis. "That's unfortunate and that's disappointing."
Several Democratic legislators have called for an increase to the Base Student Allocation, the amount per student districts are provided for the foundation program. The governor's proposal does not include such an increase, though he has responded that legislators are welcome to have that conversation among themselves during the upcoming legislative session, which starts Jan. 21.
"I said I'm open to that conversation, but I want it in the context of greater reforms to give districts more flexibility in the way they spend the public's money and how education is delivered to our kids," Parnell told the News-Miner. "Looking at (Base Student Allocation), not just pouring more money into the system but pouring more money and changing the system."
The Base Student Allocation is set in statute by the state legislature at $5,680 per student. The complex calculation within the foundation formula takes that per student allocation to arrive at the amount each district receives.
If the final budget approved by the legislature in spring matches the governor's proposal and keeps the allocation at its current number, it will mark the fifth year in a row the Base Student Allocation has not increased.
FNSB School District has had to "operate with the same base student allocation year after year, and you're articulating that it's going to stay there," Lewis said. "It's tough to do business and have it not affect the classroom."
Lewis said until the district can finish its budget projections, which he anticipates will be complete mid-January, there's no way of knowing how hard classrooms will be hit. He was confident that if the final numbers match the governor's proposal, the classroom will inevitably take a significant hit.
"It would definitely affect the classroom," Lewis said. "We're anticipating that (the cut) is going to be larger than it has been in each of the last three years."
Last year, the district increased class sizes for the first time in several years. The district told 80 teachers during the summer they might not have jobs come the school year. Most were hired back in some capacity but more than a dozen of those laid off did not return.
A $100 increase to the Base Student Allocation would mean a statewide increase in foundation funding of about $25 million, according to budget documents, and about $2.6 million for FNSB school district, according to district Chief Financial Officer Mike Fisher.
The last three times the legislature increased the allocation, it did so by $100 each time, taking the allocation in the course of three years from $5,380 to $5,680. The last time the legislature increased the allocation by more than $100 was eight years ago, in fiscal year 2007, when it raised the allocation by $461.
According to Lewis, a $100 increase wouldn't be enough to stem the tide of the coming cuts. When the allocation was rising each year it may have been, but "if it sits there year after year," he said, "we need more than that."
Not all of the school district's budget comes from the state. A small portion comes from federal sources, but the greatest amount behind the state's allotment comes from the borough. Each year the borough is given a minimum from the state that it must provide to the district. In fiscal year 2013, the borough's minimum allowable contribution was just more than $25 million.
In recent years the borough has funded its schools significantly higher than the required minimum. In fiscal year 2013, the borough allocated $48.3 million to the school district, nearly double the required contribution.
Because of the borough, the school district's budget could theoretically increase despite the state funding stagnating. Borough Mayor Luke Hopkins said when the time comes he anticipates he will bring forward the minimum funding resolution before the borough assembly at the same number the borough gave the district last year.
From there the assembly would have the choice to go forward with that same funding or either raise or lower the amount.
"I don't think they've ever made it more," Hopkins said. "In my four years they haven't increased it. They've tried to reduce it."
If the assembly decides to increase the local contribution from last year, they still could not increase past the state-mandated maximum allowable local contribution. The maximum changes slightly from year to year, but in fiscal year 2013 the maximum allowable contribution for Fairbanks was just more than $60 million.
The most the borough could increase its funding to the school district would likely be somewhere near $12 million. To do that, however, the borough would have to reduce its own budget or increase local taxes.
As the school district completes its projections from the governor's budget, the legislative session is gearing up to start. When legislators convene in Juneau in January, the district will begin making its case for more funding and hoping for something it hasn't had in half a decade, an increase to the base student allocation.
The governor, for his part, is less concerned about how much money schools receive than how that money they get is spent.
"Certainly districts can always use more money," Parnell said. "But the issue is how is it being spent?"
Contact staff writer Weston Morrow at 459-7520. Follow him on Twitter: @FDNMschools.