Recent history in Kent School District (KSD) has taught us that planning ahead for fiscal challenges may be hard in the short-term but is essential for the long-term financial health of the district.
Beginning in April 2022, presentations have been given at school board work sessions and meetings regarding our financial outlook for the next several years.
As outlined in these presentations, our district is currently fiscally stable. Our fund balance is healthy and remains well-above Board Policy requirements. However, this healthy fund balance is mainly due to the Elementary and Secondary School Emergency Relief Funds (ESSER), which are set to expire in September 2024. Planning for a future without this substantial funding source is the key to our stability and sustained financial health.
We are forward planning now to remain fiscally responsible.
Our State Superintendent of Public Instruction Chris Reykdal has called the current budget situation for Washington school districts a “perfect storm.” Many districts are facing financial distress. Thankfully, with a solid fund balance, Kent School District is in a better position than many other districts due to our continued financial planning.
The combination of factors listed below has culminated in budget issues for many school districts in our state:
- Declining enrollment
- Expiring ESSER funding
- Rising costs (inflation)
- Potential loss in local levy capacity (due to enrollment loss)
- Continued lack of “full funding” from the state
Like our peers, KSD needs to take steps over the next several years to avoid a long-range budget deficit. The earlier we plan for these changes, the easier it will be to minimize impacts to programs, and continue momentum toward long-term fiscal health in KSD.
Declining Enrollment
Our enrollment has seen an overall decline since 2018, with a slight bump in 2022-2023. We have intentionally and responsibly utilized ESSER funding as it was intended to maintain our staffing and provide support for students and staff through the COVID-19 pandemic and beyond.
KSD enrollment decline is a large piece of our funding challenge. The district has lost about 2,300 students, while maintaining staffing levels using ESSER relief funding. However, most of our funding is generated or capped on a per pupil basis, including our local Educational Program and Operations (EP&O) levy. The last several years have laid bare the new reality of lower enrollment influenced by declining birth rates and a significant increase in the cost of housing in King County. Lower enrollment in KSD translates to less funding, and fewer staff.
Lack of Full Funding from the State
The State Legislature also has great influence over our revenue outlook. Unfortunately, we do not expect significant funding increases in this budgetary cycle, with the education budget projected to drop from 51% to 43% of the overall state budget.
In fact, the cost-of-living adjustments (COLA), to salary allocations in current legislative proposals is less than 4.0% in each of the next two years, despite the fact that general inflation (CPI) is currently well above these figures.
Remaining Fiscally Responsible
To remain fiscally responsible, our budget strategy moving forward will reflect a thoughtful, multi-year, “step down” approach whereby staffing reflects the lower enrollment in KSD moving forward.
This spring, staffing allocations will reflect the first phase of these adjustments, while still remaining compliant with our collective bargaining agreements and aligning supports for schools. To that end, some current vacant positions may not be filled during this process. However, because our current financial position remains stable, there are no plans for a Reduction in Force this year.
Our focus remains on students. This work will remain at the top of our priorities while we continue providing an excellent education, along with an equitable allocation of resources and high-quality learning opportunities to each and every student, regardless of race, ethnicity, learning difference, linguistic ability, or zip code.
