Council, school board discuss

tax contributions

Robert Monteith

November 26, 2008.

The city council met with members of the school board Monday to discuss this year’s local contribution from the general fund. Petersburg Schools Superintendent Gary Jacobsen and School Board Members Jean Ellis and Jim Schwartz painted a grim picture for the district’s finances. At the heart of their discussion was the fact that local tax contributions from residents was one of the lowest in Alaska for a school their size. That’s despite spending less per student than most schools in Alaska.

Wrangell, for instance, spends $13,191 on one student each year. Petersburg only spends $12,838 per student.

“It makes it really difficult when we’re trying to attract teachers here, or having calculus, or doing all these things that really enrich our students when we’re competing with these people that have a lot more money,” said Ellis to the council. “It’s just hard.”

Part of the reason why Petersburg has less money to spend on schools is its low mill rate. Jacobsen compared Petersburg’s contribution from the general fund to places like Valdez where residents pay 20 mills in property tax. Petersburg residents only pay 10 mills.

Councilor Lee Corrao said that made it hard to compare contributions as a city councilor.

“It makes it difficult when we have a 10 mill system and we’re comparing it against a 13 and a 20 mill system. They have more money to put into that. That becomes a voter issue as opposed to a city council issue,” he said.

Jacobsen agreed, but said he hoped the information would be informative to the council and the public.

“We’re just trying to make sure that everybody understands, and that locally people understand, that Petersburg is actually fairly low as far as the contribution based on taxes compared to other communities our size and in Southeast,” he said.

Mayor Al Dwyer then asked where Petersburg ranked academically within the state. Despite having less money to spend, Jacobsen informed the council that Petersburg was sitting in the top five. “You’re getting a darn good deal,” he said.

Less money has meant significant cuts, however. Schwartz, a former teacher himself, told the city council about a number of positions that had fallen to budget cuts.

“We’ve had to be really lean in what we do. Teachers’ salaries were lowered. A lot of the things that when I came in 1980 are not there. We had a full time reading teacher in the elementary. We had a full time gifted and talented. We had a half time home economics teacher when I first came here. A lot of those went away when the oil money started to go. Those kinds of things have never really come back. As we start to get more funding, we’re trying to put some of those things back like a middle school administrator,” he said.

Those cuts have meant facing difficulties in recruiting new teachers, which will become more of an issue as 40% of Petersburg teachers are currently approaching retirement age.

“The problem we are running into with this is when you go to a teacher fair...nobody would even stop and look or talk to them because the base salary was the first thing they looked at. They don’t look at the whole salary schedule, just the base salary, and it wasn’t high enough to have them even stop and talk,” said Ellis.

Jacobsen added, “At that time, we had around $32,000 as a base salary and right across the aisle from us was a place out of Houston, TX that was starting at $49,000.”

Despite financial constraints, the district is still performing very well academically with math scores up and dropout rates low.

“Our kids perform very well. The average score on the math test throughout K-12 is somewhere in the neighborhood of 60% being proficient. Ours is in the 80s,” said Jacobsen.

Councilor Corrao then asked about the school’s dropout rate, which Jacobsen said was 2.3%. That is much lower than the state average, which is the worst in the nation. Jacobsen compared numbers with Ketchikan and Juneau districts, which had 25% dropout rates.

The real concern for the school district, however, centered on their reliance on the Secure Rural Schools Act. The federal program gives money to schools near national forests. For Petersburg, that means about $900,000 a year. This year, the program was not in effect, which would have put the district in financial distress had the program not been forward funded. A four-year extension of the program recently passed as part of the $700 billion Wall St. bailout package, but Jacobsen remains worried that the program will not be reauthorized after it runs out. To cope with the loss, he asked the council to again consider setting some of the federal money aside for later use.

“If they fail to reauthorize it, we’re going to have $800,000-$1 million that we’re going to have to cut unless you guys come up with it. That much of a cut is not painful, it’s devastating,” he explained. “We wouldn’t survive it. So we came up with this possibility of having you increase the funding based on the general fund by 5% each year for at least the first three years, then saving that amount of timber receipts for further use down the road.”

More money from the city’s general fund could be a tough sell to some city councilors, who have shown a more conservative approach to spending money, but Jacobsen reminded those present that every other city department had seen significant increases in their budgets.
“From 1999 to 2008, if you look at the City of Petersburg expenditures, schools...had a 2.5% decrease in revenue from you guys. Whereas your general government increased 82%. Public safety increased 52%. Public works increased 36%. Community service increased 6.5%. Culture and recreation was 76%,” he said.

Mayor Dwyer thanked Jacobsen for keeping the schools at a high level of performance, but stated that he didn’t want to raise any taxes. Councilor Corrao also stated concern over the sustainability of the school’s current budget.

The city council will take up the topic again at a later date.