Implications of proposed state budget cuts, and how to make up for potentially large shortfalls in local education funding were discussed during Tuesday’s Ketchikan Gateway Borough Assembly meeting.
Gov. Mike Dunleavy released his proposed state budget last week, which makes significant cuts to public education, along with other state services.
During the school district’s report to the assembly, district Business Manager Katie Parrott said the proposed reduction to the Base Student Allocation would mean $6.4 million less for local schools.
“If we eliminated all of our support staff, every single paraprofessional, every single cook, custodian, additional staff, aside from our teachers and our school administrators, that would be close to that amount,” she said. “That for us is impossible. It’s unimaginable.”
Parrott cautioned officials and the public to seek out accurate information. She said some of the numbers coming from the state’s Office of Management and Budget are not correct.
“I don’t know how else to say it. One of the figures that’s been given is that 50 percent of the school funding that’s given to the school districts, only 50 percent is used for instruction. That’s not correct,” she said. “The implication is that the other 50 percent goes entirely to administration. That’s not correct.”
Parrott said in Ketchikan, for example, instruction costs are nearly 70 percent; administrative costs are about 11 percent. She said OMB might be combining facility costs with administrative costs, which would skew the numbers, especially considering the costs of building and maintenance further north and in rural communities.
The assembly spent a long time in a work session Tuesday to discuss revenue options. The Ketchikan School Board late last year approved a new contract for teachers, which increased some costs to the district. That was the initial reason for the assembly’s revenue discussion. State budget cuts added another layer.
One proposal would increase the sales tax cap from the current $1,000. A seasonal sales tax also was discussed. The assembly eventually agreed to forward both ideas to the Cooperative Relations Committee, which includes city officials, for further consideration.
The assembly agreed to have staff bring back an ordinance to dedicate 100 percent of the borough’s tobacco tax for education. Currently, 85 percent of the tax is dedicated to local schools. The remainder was to be used for tobacco cessation. However, the borough’s attempt to fund a program from those funds has not worked out.
A change to the borough’s hotel bed tax failed. The proposal would have removed the in-city exemption for the borough’s 4-percent bed tax. The exemption is in place because the City of Ketchikan charges its own 7-percent bed tax.
Two hotel owners, Terry Wanzer and Stephen Reeve, spoke strongly against removing the exemption. Reeve said increasing the bed tax would deter visitors.
“If you’re a convention planner looking at various communities in Alaska, you look at the bottom line,” he said. “If you’ve got a combined bed and sales tax, the highest in the state, you’re not going to go there.”
Assembly Member Judith McQuerry argued that the tax would mean less than $5 a night on The Landing’s winter room rate. Assembly Member Rodney Dial noted that a property tax increase would be more expensive for hotel owners than a bed tax, which is paid by visitors.
The motion to remove the exemption tied 3-3, with Assembly Members AJ Pierce, Sue Pickrell and Alan Bailey voting no. Mayor David Landis broke the tie with a no vote.
There was some debate about whether the assembly should take action on revenue now, or wait to see what the state’s final budget looks like. Bailey favored making plans, but waiting to take any action. McQuerry leaned toward taking action sooner rather than later.
One action the assembly agreed to take right away was to ask borough management for a resolution expressing the assembly’s opposition to Dunleavy’s proposed budget cuts.
The resolution will come before the assembly for consideration at its next meeting on March. 11.