Fairbanks North Star Borough School District officials fielded questions from the Assembly Finance Committee on Thursday about the district’s budget request.
The presentation followed the Assembly’s April 10 approval of a resolution setting the borough’s local education contribution at $60 million for the upcoming fiscal year.
“That’s huge in a time of great uncertainty, especially given what’s happened at the state level with educational funding,” Superintendent Luke Meinert said.
The school board adopted a lean budget in March, with significant cuts to balance a projected minimum $16 million deficit. That budget assumed a $60 million appropriation from the borough and a $680 increase to Alaska’s Base Student Allocation (BSA) formula.
Cuts, past and present
Chief Operations Officer Andy DeGraw noted that over the past five years, the district has closed four schools, increased class sizes, cut over 200 jobs, eliminated elementary band and orchestra programs, and reduced funding for art programs, the activity fund, the print shop and the extended learning program.
The $16 million deficit was made up of $10.4 million in rising costs and $5.6 million in lost revenue from declining enrollment and other factors.
In November, the district voted to eliminate custodial positions, and in February it closed three elementary schools. Final budget reductions included increasing class sizes, cutting 14 full-time teachers, eliminating three exploratory student positions at Barnette Magnet School, one teacher at the Career Education Center, and three high school counselors. The district also terminated a $175,000 building lease for the Star of the North School.
Salcha Elementary lost its principal but will retain three teachers and custodial services. The budget also includes a $520,000 reduction in charter school allocations and a $500,000 cut to district administration.
Overall, the district cut 168 positions for the upcoming school year, including custodial staff.
It also reduced its budget for vacant positions by $1 million and suspended curriculum and staff laptop updates.
“It has been a very difficult budget season,” said school board president Melissa Burnett.
Burnett added that the board approved a memo stating that any additional funding beyond the recommended budget would be used to reduce class sizes.
The district currently enrolls 11,805 students — down more than 600 from the previous year. Based on the state’s required November projection formula, enrollment is expected to decline by another 179 students.
DeGraw said the district expects to receive $7.1 million less from the state than it did last year, along with a $625,000 reduction in federal impact aid. However, the borough’s $2 million increase over last year has helped.
“School districts in Alaska are 100% beholden to these three main sources of revenue,” DeGraw said. “They cannot raise outside revenue to a significant degree.”
Assembly questions ranged from building usage to the BEST Homeschool program.
Defending homeschool policy
Assemblymember Tammie Wilson asked about BEST Homeschool enrollment. Meinert said the program serves about 800 students, down from last school year.
“That was a substantial part of the 600-student decrease,” Meinert said. “Part of that was putting a tighter framework around dual-enrollment with private schools.”
He said those restrictions now include who can remain enrolled and how homeschool allotments can be used within the public school system.
Like other state correspondence programs, BEST Homeschool offers an allotment to each student with an Individual Learning Plan. FNSBSD’s allotment is $3,000 per student and can be used to reimburse lesson or course costs or to purchase approved curriculum and technology.
The allotments cannot be used for faith-based curriculum.
Wilson also asked how many students from the FNSBSD attendance area attend other statewide homeschool programs, such as IDEA or Raven Homeschool.
Borough Mayor Grier Hopkins said state education data shows that about 3,500 students in the borough attend other programs.
“If they were in our district’s correspondence school, that would be about a $17.5 million increase in revenue for the same opportunities as any other correspondence school,” Hopkins said.
Wilson criticized the district’s decision to tighten homeschool guidelines.
“I differ from others on why your numbers have dropped,” Wilson said. “I think it’s because you aren’t meeting what parents want. Are you relooking at that because you lost 600 kids or is that a policy call by the board?”
Meinert defended the tighter restrictions.
“It was a good decision, given that our school district is not involved in lawsuits, given the use of public funds for private education,” Meinert said.
In February, parents and teachers sued the Anchorage, Matanuska-Susitna Borough, Denali Borough, and Galena City school districts, alleging that their correspondence allotments were being used for private school tuition. The lawsuit is the latest in a legal debate over how Alaska funds correspondence programs and whether those funds can be used for private education.
“I feel good about the decision we made to protect our homeschool program and make sure public funds go to public school students,” Meinert said.
He added that the district has worked to grow BEST Homeschool enrollment and “is competing well.”
Two recently closed schools — Two Rivers and Midnight Sun — will be repurposed as homeschool hubs. The district did the same with Nordale Elementary after it closed in 2022.
Closed buildings and future plans
Assemblymember Brett Rotermund asked about the status of Pearl Creek Elementary, which was shuttered in July. The borough owns most of the school buildings, and if the district no longer intends to use them, control reverts to the borough.
Meinert said the district is currently focused on repurposing Midnight Sun for the Star of the North and homeschool programs, a process that could take months. Plans for Pearl Creek would follow.
Rotermund also asked whether additional closures are anticipated. Meinert said that will depend on future revenue from both the state and the borough.
“I’m hopeful we don’t have another round of school closures,” he said. “Our community has had to work these processes for two years in a row. Hopefully, we can stabilize for a few years and work on amending our strategic plan.”
Pearl Creek charter school? It’s expensive
Assemblymembers David Guttenberg and Scott Crass asked about the possibility of reopening Pearl Creek as a charter school. When the school closed, parents rallied to support a charter conversion — an issue that has stirred debate at recent school board meetings.
Meinert said state law allows school boards to set their own charter school policies. FNSBSD’s board chose to accept applications during its August to October window.
DeGraw said the district would welcome more charter programs, but noted that space without students creates cost burdens.
“When we start up another charter, we are adding another school and all those fixed costs to the school district,” DeGraw said. “It’s expensive to start a new charter school.”
He said the district would need at least 400 new students to break even. Pearl Creek’s capacity is 525, but would not generate enough new enrollment to offset startup costs.
“It wouldn’t be able to add enough students to get to a break-even range,” he said.
State education funding for charter schools flows through local districts. A permanent increase to the BSA would benefit all schools, including charters. However, when the state allocates one-time funding outside the foundation formula, districts decide what percentage charter schools receive.
At a March 19 budget meeting, the board reviewed charter school costs by enrollment. A school with 80 students would cost the district $650,000; 300 students would cost $2.5 million; and 500 students would cost at least $4 million.
“My position is if the state wants more charters, the state needs to fund charters appropriately,” DeGraw said. “That’s a long-term conversation.”