O il revenue in Alaska accounted for about 87 percent of the state general fund revenue in fiscal year 2004. Price and the volume of oil produced are the primary determinants of petroleum revenue received by the state. The price for a barrel of oil continues to remain above $50 a barrel and has had a negative affect on the stock market since it moved above $35 a barrel. The Association for the Study of Peak Oil, created by a group of oil executives, geologists, investment bankers and academics has been warning the world of high oil prices for the past several years.
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Oil affects every area of life in our society in one form or another. Oil and public education in Alaska and its affect on the Iditarod Area School District is of highest concern to me. The schools in the district are spread over 41,000 square miles. We must fly to all locations and have no road system to connect any portion of the district. We currently serve eight schools, four located on the Yukon River and four located on the Kuskokwim River. Each site requires heating fuel to provide the necessary heat so all children can learn in a warm environment. Each community requires oil to provide the electricity necessary for every citizen and the schools located in those areas. Airlines must depend on fuel and any increase per gallon will translate into higher transportation cost. School vehicles depend upon gasoline and oil for daily operation and are necessary for the operations of schools. How does this translate into actual dollars for the Iditarod Area School District?
The district projects at least a 25 percent fuel expense increase at each school for a total of $50,000 above current cost. Currently, we will use over 100,000 gallons of heating oil for the school year. A 10 percent per gallon increase for gasoline is projected with an increase of $20,000 above current budget. The projected increase in transportation cost will range between $30,000 and $50,000 above current budget figures. This increases our projected budget at least $100,000 for 2006-07. We are also starting to see the effects of the higher fuel cost on other utilities. One site has increased the water and sewer rate from $300 a month to $700 a month.
Considering the increase in the Public Employees' Retirement System and the Teachers' Retirement System (PERS and TRS) we will need an additional $100,000. The Legislature continues to refuse to review and act on the School District Cost Study Update completed by the Institute of Social and Economic Research of the University of Alaska. Under the current district cost differential and foundation floor, Iditarod Area School District only receives .62 cents per dollar of the Basic Student Allotment.
The governor's proposed increase in the base instructional unit value for fiscal year 2007 is for $90 million. This amount will force us to cut positions and reduce services in many areas. We would need at least a Basic Student Allotment of $6,500. To date the Legislature has not considered the proposed legislation increasing the instructional unit value. Funding levels for the 2006-2007 school year remain undecided.
Projected petroleum revenue for fiscal year 2006 has passed the original $2.3 billion based on an average price of $34.50 per barrel for Alaska North Slope crude delivered to the West Coast. Education is at the very foundation of every job opportunity in Alaska. How can we not afford to provide the necessary funding to help our children in Alaska?
Joe Banghart is a resident of McGrath and the superintendent for the Iditarod Area School District.
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