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Juneau School District launches budget newsletter

January 19, 2024 – News

The Juneau School District has launched a special newsletter to keep the community informed of ongoing efforts to address the shortfall in the current FY24 budget and develop a new budget for FY25.

Newsletter updates will be available after each budget meeting. To receive these updates as soon as they are available, download the free Juneau Borough Schools App from the App Store or Google Play and follow “District”. You can also visit the Juneau School District website and click on the 2024 Budget Information tile to read the newsletter as a PDF.

The first issue is included below.

January 18 JSD Budget Update

The Juneau School District is facing unprecedented financial challenges this year. Between January and June 2024, the district and Board of Education will hold dozens of budget, finance committee and school board meetings to address a shortfall in the current FY24 budget, while at the same time developing a budget for the FY25 school year.

This is the first issue of a new budget newsletter that will be sent out to staff and families after each budget meeting to keep our community informed. Anyone can receive district announcements, including this newsletter, by downloading the free Juneau Borough Schools App from the App Store or Google Play and following “District”.

JSD has a budget deficit for FY24

After a recent resignation in the Administrative Services Department, an experienced outside school finance specialist was contracted to help manage the district’s budget. During a line-by-line review of the operating fund, it was discovered that the budget developed last spring and adopted by the Board of Education in June, overstated district revenues by over $5.9 million. It understated district expenses by $2.1 million. In addition, an outside audit of the FY23 school year revealed a $1.9 operating fund shortage, which results in a potential overall deficit of more than 9.5 million dollars.

Which areas were overestimated and overspent

The district has held three public meetings on the budget deficit in just over a week, and recordings of the meetings are available on the district’s website by clicking below. Please see the January 9, 2024, work session for a detailed presentation on the budget revision given by the outside school finance specialist.

Past meeting recordings

What this means for schools

Overall, JSD will have an estimated deficit of $9.5 million by June 30, 2024, if nothing is done. Board of Education action is needed to eliminate this deficit by June 30, 2024.

At this point in the fiscal year, the school district is able to meet its payroll obligations. However, the deficit must be addressed and significant savings must be made in the coming months.

Department of Education and Early Development (DEED) Support

DEED has agreed that there will be no penalization or holdback of future funding as a result of this situation. DEED has also agreed to allow the district up to five years to repay the deficit. Additionally, if there is a need, DEED can advance state foundation payments to the district, up to the remaining amount for the current fiscal year.

Short and long-term changes are needed

It will take a combination of solutions to resolve this situation, including immediate cuts to current operations and larger structural changes to reduce costs. Consolidation and closures will help create ongoing savings.

Long process ahead

This will be a long process, but the district must take immediate action to begin resolving the current deficit and develop a balanced budget for the next school year.

Pursue a loan to cover some of this year’s obligations

The Board of Education has directed the district to explore the possibility of a loan to help cover costs for the current year. Because nearly 90% (89.6%) of the district’s budget is salaries and benefits, most of the district’s funds are contractually obligated at the beginning of each fiscal year. The district operates in accordance with three negotiated agreements with our employee groups. It is very difficult to make quick changes mid-year. A loan would give the district time to make a new plan for the way we educate students in order to operate within reduced available resources.

Make immediate cuts

The district has identified a list of items that can be immediately reduced or cut from the current operating budget. This includes things like such as implementing a hiring freeze, limiting overtime, restricting supply purchases, maximizing qualified grant staffing allocations, canceling all non-grant funded travel, reducing substitute costs, and continuing to look for any other cost savings that can be immediately realized.

Make structural changes to district operations

An Academic Outcomes/Reorganization Working Group is actively evaluating different educational options for organizing students and staff within buildings to improve and/or streamline educational and behavioral supports and instructional programs. This will include consolidating schools and closing buildings in order to maintain as many opportunities and supports for students as possible.

A Community Committee on Reorganization will engage our broader community in this conversation. Schools impact our community at large, and changing them has an effect on everyone. Input from people living and working here is an important part of the decision-making process as we look at how schools will change over the next several years.

Present a budget revision to the Board of Education

The Board of Education must take action to revise the current budget. A balanced budget will be presented at the February 13 regular meeting.

Upcoming meetings

Board of Education Budget Process – Combined Site Council Meeting
Thursday, January 18, 2024
6:30 pm – 8:00 pm in the JDHS Auditorium
Zoom link: https://juneauschools-org.zoom.us/j/82069701469?pwd=SGJPNG81NHg5MG5SaFVHRmNVZ2gxUT09

Board of Education Budget Retreat
Saturday, January 20, 2024
8:30 am – Noon in Room 206 at JDHS
Zoom link: https://juneauschools-org.zoom.us/j/85342452050?pwd=djNPcnRMU1dsWVBOMUlQYWJvOUNGdz09

Board of Education meeting schedule