NEWS RELEASE

Kari Dendurent, Assistant Superintendent

Kenai Peninsula, Alaska

The Kenai Peninsula Borough School District (KPBSD) is providing an important update regarding the district’s budget planning for the upcoming 2026-2027 (FY27) school year. As the district moves through the FY27 budget development process, KPBSD is facing a significant gap between projected revenue and the anticipated cost of operating schools.

Last year, the Alaska Legislature made a historic decision to permanently increase the Base
Student Allocation (BSA) by $700. While that investment provided stability at a critical time,
school districts across Alaska remain approximately $1,283 per student below where funding would be today if the BSA had kept pace with inflation since 2011. Despite the BSA increase, two factors are driving a projected funding shortfall for the upcoming school year. This shortfall will require the district to make difficult decisions in order to maintain fiscal stability.

First, Alaska’s education funding formula requires a higher local contribution as local property values increase. Under the formula, as the full and true value of taxable real and personal property grows, state foundation funding is reduced dollar-for-dollar. This does not increase the total amount of funding available to school districts but instead shifts fiscal responsibility from the State of Alaska to the Kenai Peninsula Borough.

For FY27, the Kenai Peninsula Borough’s required local contribution is projected to increase
by approximately $3.6 million due to this growth in property values. Under the state funding
formula, that increase results in a corresponding reduction in the State of Alaska’s foundation funding.

Second, the Kenai Peninsula Borough’s proposed FY27 budget provides approximately 5.27
percent less funding for schools than the prior year. As a result of both the state funding formula and the borough’s proposed budget, KPBSD is projected to receive approximately $4.5 million less in state revenue and approximately $3.3 million less in borough revenue compared to FY26. Taken together, these changes represent a projected revenue shortfall of nearly $8 million.

For planning purposes, the district has budgeted borough support of $59,074,865 for FY27.
This figure reflects the borough’s proposed budget and represents a 5.27 percent decrease
from the FY26 borough appropriation. While statute allows the borough to contribute up to a maximum of $68,685,024, that amount represents a legal cap rather than an assumed
funding level and is not treated as available revenue for budgeting purposes unless additional funding is approved.

“Given these realities, the district continues to plan conservatively and responsibly,” said
Superintendent Clayton Holland. “Our priority will remain focused on protecting student
learning and core classroom services as much as possible.”

During FY26, the current school year, the district made reductions in expenditures of almost
$8 million. For FY27, the district is again reviewing potential reductions that could impact
classroom size, school consolidation, and school programs and activities.

Over the next several weeks, KPBSD will engage with community members to share
information, answer questions, and gather input. Transparency remains a priority, and the
district encourages staff, parents, and community members to participate in upcoming budget meetings.

February 18, 2026
Seward High School Library, 6:00 p.m.

Additional budget information and opportunities for public input are available on the Finance page of the district website, including the Balancing Act tool.