Fairbanks North Star Borough School District administrators are proposing $6.75 million-worth of reinvestments to lower class sizes and restore some programs. That’s as the 2027 draft budget projects a roughly $2.6 million surplus.
In recent years, February has been a time when administrators and the school board confront plans to eliminate positions, close schools and increase class sizes. This year breaks that pattern, according to district Chief Operating Officer Andy DeGraw.
DeGraw presented the district administration’s proposed Fiscal Year 2027 budget at a school board work session and regular meeting Monday and Tuesday. He told the board it’s the first time in his eight years with the district that the administration anticipates entering the next fiscal year without a funding shortfall.
“We’re seeing the fruits of those difficult decisions,” he said. “As we worked through the hard years, we’re now seeing the benefits of those difficult decisions.”
The Fairbanks school district is currently suing the state and state officials for what the district and another plaintiff say has been a failure to adequately fund public schools. The lawsuit says the district has terminated 300 staff members since 2019, closed seven schools in five years, and that many high school classes in the district have more than 40 enrolled students. School boards over the years have taken those steps amid multi-million dollar estimated budget deficits.
But in the 2027 proposed budget, the district administration recommends adding back teacher positions to lower elementary, middle and high school’s calculated class sizes by varying amounts. Elementary school class sizes would see the largest decrease, from 26 to 23. That’s among other recommendations to budget for more staff and programs, like instrumental music in elementary schools and before-school care.
District Superintendent Luke Meinert said their proposal is a step toward restoration – but not like hitting the undo button.
“We made a lot of hard decisions,” he said. We’re starting to reinvest back in our district, but this reinvestment doesn’t bring us all the way back to all of the cuts that we’ve made over the last decade.”
The district has little power to raise its own revenue, instead budgeting based on predictions about annual funding from local, state and federal governments. The proposed 2027 budget assumes the same local contribution from the borough as last year at $62.7 million, an $8.7 million drop in revenue from the state due to declining enrollment this year, and a $2.9 million increase in federal aid. The recommendation also includes a $2.3 million draw from fund balance. The assumed revenues total about $229 million.
The 2027 budget proposal comes at the same time an audit of 2025 financials shows the district may have to return $11.4 million to the borough. That’s because the district’s unrestricted fund balance is exceeding a threshold established by borough ordinance.
Those audit results have introduced public skepticism to some of the school board’s past budget decisions, including from Cora Hamilton, who works in special education at Salcha Elementary. That school escaped proposed closure last year – but continued to operate with a reduced staffing model, and Hamilton said Tuesday it’s unsustainable.
“The district is running the last rural school in the borough on a skeleton crew and calling it a budget decision,” she said. “We were told last year there was no money, and then we learned about the $11.4 million surplus, and that is insulting.”
DeGraw and some board members said they know cuts have pained sections of the community. But they say they still believe those decisions represented responsible budgeting and have put the district in a more stable fiscal position.
“Going back to the large, structural nature of the decreases that we made to such a large organization, [it’s] just not realistically possible to capture 100% of those savings in advance or be sure of what amount they’re going to equate to at some future point in time,” DeGraw told the board.
School board member Morgan Dulian said at the end of Tuesday’s meeting she understands that people must be wondering if all the cuts have been necessary. She said votes she made last year affected her own children – but that she’d vote the same way again.
“I can say with certainty after going through the budget, going through the audit, asking a million questions, that I would’ve still made that decision,” she said.
Dulian is now looking forward to thinking about what to add back to the district rather than what to trim from it, she said.
It’s still early in the district’s budget season. Assumptions about revenue and expenditures are subject to change in the coming months, and the school board can also tweak how funding is allocated. The board has to forward a recommended budget to the borough assembly by the beginning of April, but a final spending plan isn’t due to the state department of education until July 15.