School district has ‘extra’ $1M with BSA hike, but may lose $8M next year if state alters local funding rules

Estimated cost of new limits on non-instructional funding for Juneau schools increases nearly fourfold from a month ago

Thunder Mountain Middle School, where the Juneau School District’s administrative offices are located, on Friday, June 27, 2025. (Mark Sabbatini / Juneau Independent)

The Juneau School District has an "extra" $1 million in state funds for the fiscal year that starts Monday, which may be spent on continuing free breakfasts for all students and boosting staff for several programs.

However, it’s facing the loss of up to $8 million a year from now if the state changes how much the municipalities can contribute for non-classroom purposes including meal services.

Those are just some of the short- and long-term uncertainties for funds the district gets from municipal, state and federal sources, Juneau Board of Education members said during a special meeting Thursday night.

The meeting that focused almost entirely on budget items also included a food services contractor warning it may have to raise prices due to tariffs being imposed by the Trump administration. The board also unanimously passed a resolution opposing the state proposal limiting municipal funds, which the state education board may review legal aspects of at a special meeting Monday.

"We kind of thought that it was going to come up for the October meeting this year," said Deedie Sorensen, president of Juneau’s school board, during Thursday’s meeting. "So as with all things related to school funding the uncertainty prevails."

Juneau School District leaders said in May they expected to lose $2.1 million in municipal funds during the coming budget year if the regulation change sought by the state Department of Education and Early Development (DEED) is approved. The district’s total operating budget for the coming year is about $95 million.

However, a memo by Superintendent Frank Hauser submitted to board members for Thursday’s meeting increases the projected loss significantly.

"Based on current analysis, JSD could face an estimated $8 million reduction in funding for the District, eliminating and destabilizing services critical to student success," he wrote.

The revised figure is based on an in-depth analysis by the district’s finance officer of audited statements and what items in them the state’s regulatory change could affect, said Britteny Cioni-Haywood, chair of the school board’s Finance Committee.

Municipalities are currently limited in how much instructional funds they can provide, and the change would apply that limit to non-instructional costs such as student meals, activities and transportation.

A 30-day public comment period began this week for the proposed change. Hauser said he expects discussion on the item by the state education board Monday, with action this fall that would see any changes take effect with the new budget year next summer.

"My understanding is the State Board of Education on July 1 will go into an executive session to discuss some legal aspects of this regulation," he said. "But it will not be up as an action item on the July meeting. The Oct. 8 meeting, I believe, is when this will be heard as an action item."

State education officials say the change is needed to comply with federal equity requirements that limit the difference between the lowest- and highest-funded districts in a state. Hauser, who has contested those assertions, told board members Thursday "we have not heard back any answers to some of the questions that have been posed."

Meanwhile, the short-term item most likely to be noticed by students and parents when the school year begins in August is whether the free breakfast program continues for all students.

Free breakfasts have been provided to all Juneau students for many years, with significant funding coming from community partners until the onset of the COVID-19 pandemic when federal funding for the meals was provided. The Juneau School board continued supporting free breakfasts during the past year, but initially only funded the first half of the year until a further review of the district’s finances resulted in funds for the second half of the year being approved last December.

Continuing free breakfasts during the coming school year will cost the district about $230,000 — half the cost of the meals — assuming the U.S. Department of Agriculture reimburses the district for the remainder, said Nicole Herbert, the district’s chief financial officer.

The Juneau School District is getting about $1 million more in state funds than contained in the budget for the coming year passed by the school board, due to a $500 increase to the $5,960 Base Student Allocation that survived the legislative process at the Alaska State Capitol this year. The Legislature passed a $700 BSA increase, but Gov. Mike Dunleavy used a line-item veto to reduce that amount by $200. The school board’s budget is based on a $400 increase.

A list of 22 add-back items for the extra money has free breakfasts ranked seventh by the school board and third by school principals. Among the priorities with higher combined priorities are an extra administrative staffer for the HomeBRIDGE program, a counselor previously covered by a mental health grant, and "additional staffing to address any enrollment needs."

Thursday’s meeting was an initial review of the add-backs, with formal action funding some of them likely to be scheduled for a meeting later this summer before school starts. The school board, while approving a new food services contract for NANA Management Services that will keep meal prices the same, also voted to delay a decision on whether the company should continue providing free breakfasts until the full add-back list is reviewed.

A memo by Herbert to school board members notes the contract for the coming year is 2.69% higher than the amount paid to the company this year. A supplemental memo notes that amount isn’t set in stone.

"Given the current trends in the food service market and rising operational costs, there is a possibility that NMS may consider requesting an increase related to tariffs," the supplemental memo states. "Should the need for a tariff increase arise, the change will be made by written amendment signed by both parties."

• Contact Mark Sabbatini at editor@juneauindependent.com or (907) 957-2306.