District officials say the Fairbanks North Star Borough School District may have a $32 million budget shortfall in Fiscal Year 2026. Fairbanks school district budget deficit depends on there not being a one-time state funding increase like the one that was given in FY25. Lawmakers failed to override the governor’s veto of a permanent per-student funding system known as the Base Student Allocation (BSA).
The borough’s chief operations officer, Andy DeGraw, clarified that the state’s contribution may decrease by $20 million without more financing. During the presentation, DeGraw listed three possible outcomes, all of which involved impairments. He determined that the best-case situation was a $8 million deficit, while the most likely scenario was a $16 million shortfall.
Administrators have stated that consolidation and cutbacks will be required to handle the impending deficit. The closing of four campuses in the previous four years, including Eielson Jr./Sr. High School, in FY25, is only one of the significant changes brought about by recent budget cuts. DeGraw cautioned that such policies as layoffs and outsourcing will probably continue in future budgets.
“I don’t have the confidence at this point to say it won’t continue,” DeGraw stated. Although specific cuts have not yet been decided, possible measures include removing janitorial staff, an option discussed during the FY25 process. As the district navigates these challenges, leaders continue to explore ways to lessen the impact of the Fairbanks school district budget deficit on students and staff.
He proposed changing the state’s funding formula to remove borough contributions comprising 30% of the district’s budget. Since two-thirds of funding comes from the state, this change could increase education funding and ease financial pressure on local municipalities.
This news article was originally published by Alaska´s News Source.
