Gov. Frank Murkowski signed a bill on Friday to increase the state's education funding formula by $32 million, drawing most of the money from a grant program, and said schools largely will be spared from his veto pen.
While the governor contemplates $135 million in cuts to balance the fiscal 2004 budget, educators breathed a little easier.
With state education officials looking on, Murkowski signed into law a bill to raise the state's foundation formula by $159 per student, a 3.9 percent increase.
"It's the largest single increase in over a decade (and) it clearly demonstrates our commitment to focus on education in the classroom," Murkowski said.
But lawmakers took $30 million from learning opportunity grants to schools and put it into the foundation formula. Those grants were worth about $950,000 to the Juneau school district.
The foundation formula is the main funding stream for schools and is anticipated to cost the state more than $701.3 million in the fiscal year that begins July 1.
Together with an increase in debt reimbursement for school construction projects and $53.9 million for school transportation costs, "it provides a stable funding for schools well into the future," Murkowski said.
Education officials were relieved by Murkowski's support for the bill, but said they will have to endure other cuts.
Juneau schools Superintendent Peggy Cowan said the result is similar to what the school district anticipated in its recent presentation of a $1.4 million shortfall to the School Board for next year's budget.
The gap is the result partly of state cuts in pupil transportation and tuition for students who are state wards, and partly from increased costs of employee contracts.
"The bottom line is that the new cuts we will be taking to the board on June 17 will be about a total of $1.6 million from the March 28 budget that they passed," Cowan said.
The school district already has taken steps to cut about $525,000 from the roughly $39 million budget, including by reducing the teaching staff by 4.75 positions, putting off buying new math textbooks, and possibly holding kindergarten all day, thus eliminating the early buses for kindergartners.
State pupil transportation spending will remain the same but the money will be doled out under a formula that encourages districts to cut their rising costs. Districts had asked for more money.
But Murkowski said that "full funding comes with full accountability," and he pledged to continue to search for economies in state spending on education.
"The Murkowski administration pledges to continue to make financial resources available, but we need to hold recipients of these resources accountable for excellent educational results," Murkowski said in a letter to the superintendents of Alaska's 53 school districts.
Alaska schools fared well this year when compared to deep cuts in other areas of state government. But education didn't emerge unscathed.
Murkowski had proposed cutting nearly $28 million from education during his March budget address. While the GOP-controlled Legislature signed off on some of his proposals, it balked on the deepest cuts.
Legislators also funded pupil transportation at current levels, rejecting Murkowski's plan to reduce it by 20 percent.
But lawmakers cut $500,000 from community schools, eliminated the state's summer correspondence school program, and funding for 4-year-olds in kindergarten.
Alaska has a chronic budget shortfall and a $1.9 billion reserve account, which is expected to be drained in three years.
In an effort to extend the life of the state's reserve account and preserve Alaska's high bond rating, Murkowski has vowed to cut millions from the budget.
He plans to draw no more than $400 million from the state's Constitutional Budget Reserve, which has been used in recent years to balance state spending.
The Legislature cut millions from state spending before adjourning May 21, but $135 million still needs to be eliminated to meet the state's budget goals, Murkowski said.
Among the programs that could be cut or reduced are $22 million in municipal revenue sharing assistance and $44 million used to fund longevity bonuses to eligible seniors.
Murkowski said he plans to roll out many of his cuts next week, but he gave no indication of what they will be. He said there will not be any direct cuts to education, but indicated that schools could be affected by other cuts in the offing.
The Juneau School District is waiting to hear from the Juneau Assembly about the local contribution to school funding.
The increase in the state's foundation formula also triggers a higher allowable amount of city funding. In Juneau's case, it's about $300,000. The school district had been asking for about $292,000 over the previous cap, for items such as pupil transportation. Now it will drop that request and ask for full local funding up to the new, higher cap, said district Business Manager Gary Epperson.
Eric Fry contributed to this report.