Juneau’s Economic Health Impacts Population and Schools

First Things First Alaska Foundation – White Paper

Juneau’s Economic Health Impacts Population and Schools

March 4, 2024

The City and Borough of Juneau has been losing population throughout the 21^st century. Two important trends are evident: (1) a reduced number of children and young adults, and (2) an increase in the number of senior citizens (over 65). That is, young families are moving away while older residents are aging in-place.

From 2020 through 2023 State of Alaska Department of Labor (DOL) population estimates for Juneau show a decrease in school age children and their parents with only two age classes showing growth (See attached image: Figure 1). At the same time, retirement age residents have increased in numbers. This documents the loss of younger residents and aging of those who have remained.

Figure 1. Change in population by 5-yr age class from 2020 thru 2023 (Alaska Department of Labor).

The effect of this population decline has been a reduction in the number of students in Juneau’s schools. Juneau has lost a quarter of its student population from the peak enrollment in the late 90’s. Regardless, the Juneau School District (JSD) continues to operate the same schools as it did in those times, plus the new Thunder Mountain high school. That is, while school facilities have all been retained – and actually expanded – the school population has dramatically declined.

State funding for schools is tied to the number of students, which has resulted in declining school funding, yet operating expenses have continued to climb. The JSD announced early in 2024 that district expenditures would exceed available funds by $9.6 million (including the cumulative over expenditure from FY2022). While the CBJ will have to deal with the school funding shortfall this year, there must be change in operating budgets in coming years to match available funding while achieving desired educational outcomes.

There is no expectation that additional students will appear in future forecasts based on population estimates by the DOL. Their population forecasts are based on projecting past trends of births minus deaths and then adding or subtracting net migration (people moving into or out of Juneau). The forecast trend is for a steady decline in population overall and an increase in median age; that is, aging of the population (Figure 2). School students and young adults are and will continue to shrink in numbers, while retired or retiring persons will stay in Juneau and age in-place.

Figure 2. Juneau population and median age projections at five year internals from 2020 thru 2050 (Alaska Department of Labor).

Parsing this projection by five-year age class; i.e., 0 to 4, 5 to 9, and so forth, the same comparison can be illustrated looking forward (Figure 3) as was documented earlier (Figure 1).

Figure 3. Change in projected population by 5-yr age class from 2021 thru 2050 (Alaska Department of Labor).

Note that school age children and young adults (parents) are expected to dramatically decline in numbers, while octogenarians are expected to continue to increase. As such, the student population, associated state funding, and local homeowners paying property tax in support of school funding are all expected to decline.

Based on these data, it is only prudent to seriously examine the JSD fixed costs associated with school and other buildings to provide a quality education for a declining number of students. Some school buildings should be closed and facilities consolidated to reflect the declining population.

Of course, the critical issue here is the declining population, but why is it declining? As stated above, government employment at the federal and especially state levels has been and is expected to continue to decline. State government jobs have and are expected to continue to move north to other communities (e.g. Anchorage). A well-diversified economy may be able to shift workers between industries or attract new workers from outside the community, but the limited economic sectors of Juneau make such adjustments difficult.

To help diversify the economy to soften the blow of job departures, such as those of state government shrinkage in Juneau, it would be prudent for local leaders to promote the development of local opportunities. While there have been successful new projects opened in the region – exemplified by the opening of Greens Creek and Kensington Mines – these are successes hard won, including having to win court battles in the United State Supreme Court. The time and expense of such lengthy development programs that might include legal challenge to the US Supreme Court are sufficient to deter many businesses.

Other development opportunities have not flourished. While opposition to most all development projects is often seen, local government support is essential to ensuring a welcoming home for would-be job creators. Projects that have failed to materialize for a variety of reasons include the AJ Mine redevelopment, highway 7 extension up Lynn Canal to Haines/Skagway, private cruise ship dock expansion, redevelopment of South Franklin real-estate into tourist vendor facilities (e.g. Archipelago project), and a Navy ice breaker home port facility, to name a few.

A community will either grow or decline. The casual observer in Juneau might perceive that Juneau has remained stable and unchanged over the past few decades, but change is always present – if incremental – and the data shown above are real. Juneau has and will continue to lose population and associated services and school enrollment.  To maintain a top-quality school system and vibrant economy where young families want to come and stay, it is incumbent on the community to be welcoming to economic development opportunities as they arise and to seek out new industries.