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Summer Budget Update

Our KSD Budget and Finance Team continues to work with our staff and present updates to our School Board and community as they finalize the 2018-19 budget for adoption in August by our KSD School Board. Per state law, KSD must submit a budget not only for next school year, but all school districts in Washington State must also submit a four-year budget plan. This multiyear budget planning work is a positive step forward for KSD.  

Public school funding in Washington State and our district budget is complex. It involves many different individuals and entities at the local/district, state, and national levels. Our district budget includes multiple sources of revenue (state, federal, local levies and grants) and many expenses including: transportation, facilities, energy, health and safety, instruction (teachers), curriculum and staff development, food services, counseling services, school leadership and support (principals), and more. In Kent School District, we have more than 3,000 dedicated employees. We have nine employee groups, eight of them are represented. Our core business as a district is teaching and learning, with an emphasis on learning, and to deliver that learning $.85 of every dollar in our budget goes to funding employees in KSD.

As the 2018-19 budget development work continues this month, there has also been important statewide judicial decisions made that impact all districts, including KSD, moving forward. On June 7, the Washington State Supreme Court officially ended proceedings on the 2012 McCleary v. State of Washington school funding case.  The court ruled the actions taken over the last two legislative sessions have now satisfied the court's directive to fully fund "basic education" for Washington's public school system.

The legislature did not significantly change what programs and services are included in the definition of "basic education", but rather changed the allocation rates and sources of funding. Many of us experienced a significant increase this spring on our property tax statement, mainly attributed to an increase of the state property tax rate for education. This additional revenue allows the state to significantly increase the portion of salaries and materials it pays to each school district (295 school districts in Washington) while addressing the court mandate to reduce the reliance on locally voted levies for the salaries and materials our district was already paying for.

In fulfilling its responsibility to fund "basic education" through this one-time state tax increase, the legislature has also mandated a corresponding reduction in local levy authority since, historically, these funds were used to backfill the unfunded portion of "basic education." 

That means what we will also see next year on our property tax statement is a large reduction in Kent's local school levy property tax rate, as we shared at our Community Conversations in January. All school districts, including Kent, will be limited to a maximum levy rate of $1.50 per assessed $1,000 of property values, down from our current rate of $2.77 per $1,000. 

With significant changes in state funding formulas and variable local levy limits, the final budget impact is different for every school district in the state. The media has reported there are school district "winners and losers" on who will gain funding and who will see cuts. Where districts fall on this scale is primarily related to their previous levy rates, the average property values within district boundaries, the experience level of their staff, and how much "regionalization" salary adjustment they receive based upon each district's median home values. 

To illustrate this, the table below shows two districts similar to Kent and how the corresponding new funding will impact budgets.

State Funding Increase comparison table

 

 

 

 

 

*The State Regional Salary Increase refers to the increase in allocation of state funds as determined by the Washington State Legislature

**Financial changes comparisons are between the 2017-18 school year and the 2019-20 school years to show before and after budget implementation.

In addressing the ruling, state superintendent, Chris Reykdal recognized, "While the Legislature ultimately resolved the court case by increasing state resources spent on K-12 education, it did not fundamentally change how to support students and educators or increase student achievement." 

With the reduction in our local levy combined with the new funding formula, in addition to the current fiscal challenges unique to Kent School District, it is critical that we continue to remember that the financial decisions we make this year will impact our students for at least the next five years.

While it has been a challenging year operationally, the cost-saving strategies we have implemented as a district continue to be reflected in a projected positive year end fund balance for August 2018. To continue serving our students' needs within this new educational funding landscape and ensure our fiscal health long term, KSD is committed to ongoing open and honest communication with all stakeholders about our financial status and decisions, ensuring that our investments are aligned with our district vision, strategical goals and our shared commitment to successfully preparing all students for their futures.

We appreciate the opportunity to share where we are in the budgeting process and our continued efforts to be good stewards of the resources that support the education of each and every student in Kent School District.

 

Kind regards,     

Dr. Calvin J. Watts

Superintendent