12/07/2022
ASD Leadership has finally acknowledged what some of us have been saying for almost a month: closing schools ends up creating a bigger budget deficit than it fills long term.
These slides are from the 12/5 ASD Board Work Session. It's easy to misinterpret the them because they are trying to cast things in the best light possible. So here's some help:
-Keep in mind that the closures are designed to fill a 4M budget gap out of the (newly updated) 48.2M total budget deficit projected for FY24.
-If all the hidden assumptions about cost savings and new revenue from charters renting the spaces pan out and if all new costs (like additional busing) were factored in, then this strategy will save 4M for 2 years. (And keep in mind those are BIG "ifs"!)
-But this is temporary. It depends on a "hold harmless provision" in AS 14.17.410 section H that allows a district to receive full funding at pre-consolidation levels for two years after closing a school. The State of Alaska funds smaller schools at a higher rate. So, the district benefits from that higher rate for two years after closure, but then the funding tapers off until the formula is calculated in Year 5 based on the sizes of the consolidated schools.
-So, what the slide is showing is a loss in annual funding of about 4.6M per year fully taking effect in the fifth year.
-But even by Year 3 this strategy is not still filling the 4M budget gap. Since it only fills 2.5M by Year 3 that means the district will have to make up the 1.5M that remains in some other way. Will they close more schools at that point? We sure hope not. Because long term, this is a losing strategy.
-And don't let the 10.9M in cumulative savings over 5 years fool you. That's a common tactic used by administrators to impress an untutored board/public. It's hard to put into perspective since we usually think in in terms of annual costs and not five-year budgets (which for ASD would be over 3 billion). A better way to put it is that closing six schools saves 2.6M on average for four years (or about 6% of the current operating costs of the 18 involved schools) and then creates a deficit of 0.5M each year after that.
-At the work session, ASD's CFO compared the closure plan to the use of one-time funds to fill a budget gap for a few years. The problem is that by contrast to typical one-time funds, like the 37M(!) available in bond debt reimbursement, the savings might not actually be achieved and depend upon disrupting the lives of about 1400 students. When you include preschoolers and students in all the receiving schools, the plan impacts about 5000 students and their families.
There are other ways to better utilize our buildings that are financially sustainable and less disruptive to kids: co-location of schools, adding additional preschool classes, relocating district administrative functions out of commercial buildings and into schools, partnering with the municipality to use the space for community services. (Let's get creative!)
But for some reason the district has settled on a solution that isn't financially viable. ASD leadership knew this at least 2-3 months ago. So why all the town halls? Why stress kids, families, and communities with the loss of their schools?
It's the cookie cutter solution of their $108k outside consultant and it is what some politicians equate with "right-sizing" our schools. But it ignores what is lost with the elimination of walkable neighborhood schools that hold communities together and now they are finally beginning to admit that it doesn't even make long term financial sense.
What should be alarming--even exclusively from a financial standpoint--is that the district has said they have a list of 12 more schools they wish to close!
Tell the district leadership and the board to part ways with the outside consultant and get off the consolidation train.
It's time to solve the underlying problem: Alaska's education funding is out of step with inflation and has fallen behind other states.
For a full analysis of the impact of the closures on funding, find out more here: https://www.savenunaka.net/show-us-the-money
For info on education funding as it compares to the rest of the country check this out (and keep in mind, this ISER report was prior to the major inflation of the last few years): https://iseralaska.org/.../alaska-spending-on-k-12.../