Alaska law requires every local school board to prepare and approve an annual budget that outlines all expected income and planned expenses for the school year. Before final adoption, the proposed budget must be available for public review, and the community must have an opportunity to provide input. After adoption by the school board, borough and city districts also submit their budgets to the local government for final approval of local funding.

The annual school district budget serves three primary purposes:

1. A spending and operating plan
   The budget shows how much the district expects to receive and how the money will be used to educate students and operate schools. It tells the school board, school employees, and the community how resources will be allocated — including staffing, programs, transportation, facilities, and student services.

2. A revenue and planning tool
   The budget identifies how much funding the district will receive from the State of Alaska, the federal government, and, where applicable, local city or borough contributions. Alaska’s state school funding formula — primarily based on student enrollment (Average Daily Membership or ADM) — plays a central role in determining available revenue. The budget process also helps determine local contribution needs for city and borough school districts.

3. A required financial record and accountability document
   The budget satisfies state and federal reporting requirements, ensures compliance with Alaska school finance laws, and establishes the district’s legal authority to spend public funds. It also provides a transparent financial record for the public and government oversight agencies.

How the Budget Is Organized

Alaska school districts manage their finances through several funds, each with specific legal purposes for how money is collected, held, and spent. While fund names may vary slightly by district, the main funds generally include:

• General Fund -  Covers most school operations, including teachers and staff, classroom support, instructional programs, student services, and day-to-day operating costs. This is typically the largest fund.

• Special Revenue Funds - Accounts for restricted programs such as federal grants (e.g., Title I), Pre-K programs, and state categorical grants.

• Food Service Fund -  Supports school meal programs.

• Student Transportation Fund -  Supports transporting students to and from school and approved activities.

• Capital Projects Fund -  Used for school construction and major building improvements.

• Student Activity Fund -  Supports student organizations and extracurricular activities with monies raised or donated for student use.

Some of what goes into the school district budget is determined by the board of education, based on the advice of its professional staff and local citizens. Many budget decisions, however, are forced on the board by factors beyond its control.

Each year the administrative staff gathers information from a variety of sources and presents the school board with a proposed budget. After carefully reviewing the budget, the board gives tentative approval and puts it on file for public inspection. The board gives final approval of the budget only after a public hearing.

The timeline for developing a tentative budget to its adoption varies from district to district. The annual school district budget must be adopted by July 15, after which it must be filed with the Alaska Department of Education & Early Development (DEED).

School district income in Alaska is primarily determined by two major revenue sources:

• State Aid Entitlement
  The largest source of funding. This amount is calculated using Alaska’s state school funding formula and is based mainly on student enrollment (Average Daily Membership), adjusted for factors such as district size, geographic cost differences, and student needs.

• Local Contribution
  For city and borough school districts like Juneau, the local government is required to contribute a portion of revenue to support public education and may choose to contribute above the required minimum. This helps fund programs and staffing that state funding alone cannot cover. (Rural REAA districts do not have a local tax base and rely almost entirely on state funding.)

In addition to these primary sources, school districts receive smaller supplemental revenues, including:

• Federal E-Rate reimbursements for technology and internet access

• Federal Medicaid reimbursements for eligible student health-related services

• Other local revenues, such as building rentals, tuition for out-of-district students, and community program fees

While these supplemental sources help support specific programs or services, they make up only a small portion of overall district funding.

When state funding, federal aid, and local contributions do not cover the cost of operating schools, school boards are faced with difficult decisions. Alaska school districts cannot raise taxes on their own, and many districts do not have a local tax base at all. When state funding lags behind inflation, enrollment declines, or one-time funding expires, school boards must find ways to reduce expenses while still meeting student needs and state and federal requirements.

School districts can achieve small savings by:

• Cutting discretionary supplies and materials

• Postponing equipment purchases or deferred maintenance

• Reducing travel or professional development costs

• Conserving energy and lowering utility use

• Combining staff duties or leaving vacant positions unfilled (attrition)

• Streamlining bus routes or adjusting transportation schedules

• Reducing extracurricular activities or clubs

These strategies help control costs, but they do not create major long-term savings.

To make significant reductions, school boards often must address their two largest costs — staff and facilities.  This may include:

• Reducing staff positions or programs

• Increasing class sizes

• Consolidating grade levels or programs into fewer schools

• Closing or repurposing school buildings

Because personnel and buildings make up the majority of a school district’s budget, meaningful cuts often affect classrooms, staffing levels, or school facilities.

These decisions have real impacts. Larger class sizes, reduced course offerings, and fewer support staff can affect student learning and services. Building closures can change neighborhood access to schools and place more strain on remaining facilities.

The financial health of a school district is reflected in its financial reports and long-term ability to sustain educational services. A statement of revenues and expenditures shows whether the district is operating within its means, while a balance sheet shows assets, liabilities, and fund balances — including whether the district has built reserves or taken on debt that will impact future years.

Unlike private businesses, which measure success by profit, public schools are intended to break even while delivering high-quality educational services for every student. Financial health is ultimately about supporting student learning in a sustainable and responsible way.

A school district is generally considered financially healthy when:

• Educational programs and student services meet state requirements and community expectations

• Resources are used efficiently, providing strong value for every public dollar

• Annual revenue and expenditures are balanced — or, if they vary from year to year, they remain balanced across a reasonable multi-year period

Why appearances can be misleading

Financial statements do not always tell the full story:

• A district may provide excellent programs, but spending beyond sustainable levels to do so is not financially healthy.

• A district may show a “balanced” budget only because programs or staffing were reduced below what students need — which also signals financial strain.

School districts, including Juneau, may occasionally borrow short-term funds to manage cash flow when state payments or other revenues are delayed. This is not the same as operating at a deficit — as long as the borrowing is repaid from current-year revenue. However, borrowing against future years’ income or drawing down reserves year after year indicates fiscal stress.

Difficult budget decisions

When revenues do not keep pace with costs, school boards must make difficult choices, such as:

• Reducing staffing or increasing class sizes

• Modifying or reducing programs or services

• Using reserves for one-time needs

• Asking the community or local government for additional support

• In rare cases, adopting a short-term deficit plan with a long-term path back to balance

A financially healthy district typically does not rely on ongoing deficits, unsustainable draws on reserves, or program reductions that compromise student learning.

Several factors create continuing financial challenges for many Alaska school districts:

1. Rising Costs and Inflation

Just like households, school districts face rising costs for fuel, electricity, food, materials, and services. Alaska’s geography and climate make inflation even harder to manage:

• Remote delivery and transportation costs

• Higher heating and utility bills

• Higher labor costs needed to recruit and retain staff

Since most district expenses are salaries and benefits, inflation also increases the cost of maintaining competitive wages in order to keep teachers, bus drivers, custodians, and support staff in Alaska schools.

2. State Funding That Has Not Kept Pace With Costs

The Base Student Allocation (BSA) — Alaska’s core school funding amount per student — has remained largely flat for more than a decade, while costs have risen significantly. This means that even if enrollment stayed level, schools would struggle to cover rising expenses.

In addition:

• The state’s funding formula is heavily enrollment-based, so declining ADM leads to lower state revenue.

• Temporary one-time funding does not provide long-term stability.

• Districts cannot raise state revenues on their own — they rely on legislative action.

This creates uncertainty and makes long-term planning difficult.

3. Dependence on Local Contributions (Where Allowed)

Only city and borough districts (like Juneau) receive local tax contributions; rural REAA districts do not. Even in communities with local support:

• Local contributions are capped by state law

• Local government budgets also face revenue pressures and inflation

• Economic shifts (e.g., tourism changes in Southeast) can affect local tax capacity

Districts may need more local support than local law or local finances allow.

4. Enrollment Changes

Student enrollment directly impacts funding. Many Alaska communities have experienced:

• Declining birth rates

• Out-migration for work

• Families relocating to larger districts or out-of-state

Because funding is tied to ADM, even small enrollment declines can dramatically reduce revenue, while fixed operating costs (buildings, bus routes, staffing, utilities) do not shrink at the same rate.

5. Expanding Educational Responsibilities

School districts today serve broader student needs than in the past. Alaska school boards must fund:

• Special education services

• School nurses and mental health supports

• Behavioral and social-emotional programs

• English learner programs

• Career/technical education

• Technology and digital learning infrastructure

• Student transportation in challenging environments

Many of these services are partly funded but not fully funded, creating unfunded or underfunded mandates.

6. Unique Alaska Operational Challenges

Alaska’s size and isolation increase costs in ways most states do not experience:

• Air service or ferry-based travel for staff and students in some communities

• High shipping costs for food, supplies, and equipment

• Limited contractor and vendor competition

• Aging facilities with high maintenance needs

Even with prudent management, these cost pressures can exceed available revenue.

Bottom Line

Even well-run school districts can struggle to balance budgets when:

• State funding does not keep pace with costs

• Enrollment declines reduce revenue

• Inflation and Alaska-specific costs rise faster than income

• New or expanding student needs require additional support

• Local revenue options are limited by law or capacity

People expect a lot from their schools—and for good reason. A good education can improve a person’s quality of life. Educated people are the ones who create new ideas in science, medicine, technology, art, and more.

In the past, public schools mainly focused on teaching students who were ready and able to learn. Today, schools must support all students, including those who face challenges. Because of this, schools now provide many more services than just classroom instruction. These include:

• Meals for students

• Health and mental-health services

• Counseling and guidance

• Extra help for students who need support

• Advanced classes in areas like math and science

So, what does your community get for the money it invests in education? School districts—and school boards—can look at several important signs:

• How many students graduate, and how many continue on to college, technical training, or jobs

• Student performance, including improvements in test scores

• How many students are passing their classes or earning honors

• Success stories, such as graduates who return to share what they’ve accomplished

• Strong school programs and staff who earn awards or recognition

High-quality public schools don’t just help students—they help the whole community. Strong schools make neighborhoods better places to live and can attract new families and businesses.

The State gives money to each school district based on the number of students—but it doesn’t use the raw student count. Instead, it adjusts that number to make things fair. These adjustments consider:

• School size

• How expensive it is to operate in that location

• Student needs (such as special education or English learners)

• Different types of school programs

After these adjustments, the State figures out the district’s Basic Need—the amount it costs to educate students fairly. From there, the State calculates how much funding the district will receive. 

State Aid Entitlement = Basic Need  – Required Local Contribution  – 90% of Federal Impact Aid + Quality School Grants

Juneau does not receive Federal Impact Aid, so nothing is subtracted for that part of the formula.

The Quality Schools Grant is money the State of Alaska gives to school districts to help improve education. This funding supports better teaching, stronger family involvement, and programs that help students build the skills they need to succeed.

The amount a district receives is based on a simple formula:

Grant Amount = $16 × the district's Adjusted ADM (student count after state adjustments)

This means the grant grows as the district's adjusted student count increases.

CBJ’s funding for education comes from a combination of local taxes and fees approved by voters. These revenues make up the city’s general fund, from which the local contribution to schools is allocated each year.

Major CBJ Revenue Sources include Property Tax (Mill Levy), General Sales Tax, Liquor and Marijuana Taxes, Tobacco Excise Tax, and Hotel Bed Tax.

The district uses a pupil-to-teacher ratio to determine how many teachers each school receives. This ratio represents the average number of students assigned per teacher for budgeting purposes.

Using ratios helps ensure:

• Staffing is fair and consistent across all schools

• Resources match the number of students enrolled

• Schools can plan for class configurations before the year begins

It’s important to know that the ratio does not determine actual class size. It simply sets the number of teachers a school is funded for. Once staffing is assigned, the principal uses these positions to create class sizes that work best for their students.

The pupil-to-teacher ratio is a staffing formula, not a class size rule.

It determines how many teachers a school gets, not how many students a teacher will have in the classroom.

Once staffing is assigned, the principal decides how to group students into classes. This allows schools to adjust class sizes based on student needs, grade levels, and programs.

Because every school is different, actual class sizes can vary.

Some classes—like Kindergarten or intervention—may be intentionally smaller, while others—like PE or certain electives—may be larger.

This flexibility helps schools create class sizes that best support learning, even though the ratios used to fund staffing stay the same.

Principals consider many factors when building class lists and may make different choices depending on the needs of their students and teachers. Some strategies include:

1. Splitting Grades (Multi-Age or Combination Classes)

If numbers are uneven—such as too many 3rd graders for two classes but not enough for three—principals may create a 3rd/4th grade split class to balance sizes.

2. Limiting Out-of-Boundary Enrollments

If classes are nearing capacity, principals may choose not to accept out-of-boundary students in order to keep class sizes manageable.

3. Prioritizing Smaller Classes in Certain Grades

Principals sometimes intentionally keep younger grades smaller, such as Kindergarten or 1st grade, because younger learners need more individual attention.

To do this, they might allow larger classes in upper grades, where students are more independent.

4. Adjusting Class Sizes Based on Instructional Needs

Some classes are designed to be smaller so students can receive more support. For example:

• A remedial or intervention class may have fewer students so the teacher can work closely with each one.

• A high school PE class may have many more students because the activities are designed for large groups.

Schools receive funding for classroom supplies based on a per-student allocation. This means each student enrolled generates a set amount of money that the school can use to purchase essential materials.

Using a per-student amount ensures that schools receive supplies funding that reflects their size and needs—larger schools with more students receive more funding, and smaller schools receive less. This approach keeps supply budgets fair and consistent across the district.

Yes. Schools have flexibility in how they use their supply funds, as long as purchases follow district guidelines. Each school can decide which materials are most important for their students and classrooms.

Principals prioritize needs such as:

• Classroom supplies (paper, art materials, basic tools)

• Instructional resources

• Technology or learning materials

• Items needed for specific programs or grade levels

This flexibility allows schools to spend their supply funds in ways that best support their students, while still following district purchasing rules and budget expectations.

The state provides additional funding for special education in two main ways:

1. 1.20 funding factor applied to the district’s average daily membership

   • This factor is applied to all students, whether or not they receive special education services

   • It is meant to recognize that districts must be prepared to serve students with a wide range of needs

2. 13.0 multiplier for students identified with intensive needs

   • These are students who require very high levels of support and services

While these adjustments increase funding, they do not fully cover the actual cost of providing special education services.

No. Funding varies depending on the level of need.

Students with intensive needs receive additional funding because they require higher levels of staffing and services. However, even with this additional funding, the total cost often exceeds the amount provided by the state.

Special education services are required by federal and state law. More importantly, they are essential to ensuring students receive an appropriate education. Services are determined by student needs—not by budget constraints.

pecial education staffing is based on student needs, not just student counts. The district considers:

• Individual student IEPs (Individualized Education Programs)

• Required services such as speech therapy, occupational therapy, counseling, or specialized instruction

• Legal staffing requirements and service minutes

• Program types and levels of student need

Staffing may include special education teachers, paraprofessionals, therapists, and related service providers. Because student needs change, staffing is reviewed regularly and adjusted when necessary.

The district monitors enrollment and student needs throughout the year. If there are significant changes, staffing and services may be adjusted to continue meeting student needs and legal requirements.