The budget committee for the Fairbanks North Star Borough School District’s Board of Education opened talks for the 2026-2027 budget last Thursday, with a top administrator saying Fairbanks public schools may be up against a deficit yet again, but that it’s shaping up to be smaller than it was this year.
The meeting is a first step in an annual conversation that has been headlined by cuts in recent years, with the Fairbanks area district routinely facing multi-million deficits and declining enrollment.
At the meeting last week, Chief Operations Officer Andy DeGraw gave an early projection for next fiscal year.
“So, if things line up in our favor, we could have a very small to no deficit. And at the same time, if things don’t fall in our favor, it could be, I’m estimating at this time, as high as $5 million,” he said.
For the current fiscal year, the board made up a $16 million shortfall by closing three elementary schools, contracting out custodial work, and increasing class sizes, among other cuts. In March 2024, the school board voted to close Ben Eielson Junior/Senior High School on Eielson Air Force Base. In 2022, the board closed another three elementary schools, with the administration at the time citing a 2,000-student drop over the previous decade and a $20 million shortfall spread over two years.
DeGraw also said Thursday that preliminary head count numbers indicate the district is down another 500 students this year compared to last.
The school district does not have the power to raise its own revenue directly. Instead, administrators and the school board have to adjust spending to align with what the district receives from state, local, and federal governments, which can vary year to year and are outside the district's control, save lobbying.
Last year, the Alaska Legislature overrode two vetoes to put through a long-requested permanent increase to the core part of the state's per-student funding formula, and the Borough Assembly added almost $3 million to the local contribution to the district through a last-minute budget amendment, making the local funding just under $63 million total.
It’s early days for the district’s next spending plan, and the range in the projected deficit will likely narrow as anticipated revenues and expenditures get more refined in the coming months. For comparison, last fall, DeGraw projected a deficit of between $8 and $32 million in the leadup to the 2025-2026 budgeting process.
Degraw said Thursday the final Fiscal Year 2027 budget must be presented to the state in July. Prior to that, the budget will pass through a couple other phases that take months-worth of meetings.
Those include district administration proposing an initial budget to the school board in February, and the school board tweaking that document before sending their recommended budget to the Borough Assembly by April 1. Once the Assembly solidifies local funding for the district, administrators and the school board work to finalize the budget.