Why is the District in a position to reduce its budget?
As with most school districts in the state, our district continues to face reductions to our budget due in part to the state’s inadequate school funding formula which continues to woefully underfund special education and transportation, along with enrollment declines and increases in staff pay and benefits. And, just like with family budgets, inflation has driven operational costs for school districts to historic highs for fuel, food, electricity, and insurance premiums (100% increase over 5 years). Yet, state funding has not kept pace, leaving schools struggling to cover even basic necessities.
What steps are being taken now to reduce next year's budget?
To address these challenges, the district is taking steps now and will continue to make additional reductions needed for the upcoming school year. We have initiated efforts to reduce or eliminate spending this school year. This will likely result in some savings into future budgets, but this is not a long-term solution. We've put a freeze on non-essential discretionary expenditures, and we will evaluate each open staffing position for timing and necessity for the remainder of this year.
What is the timeline for the budget work?
Work on the 2025-2026 school year budget has been underway since November as we reviewed early enrollment projections and began to estimate our revenue and expenses. We will continue through the spring to determine what can be reduced in our district to help balance the budget. We anticipate presenting a budget for the public and board to review in early June and will recommend adoption of the budget to the School Board in June 2025.
Will this impact athletics or activities?
Work is underway to determine what will be reduced from our budget. Student athletics and activities will take priority in our budget decision-making. We are working diligently to make reductions as far away from classrooms and student experience as possible, knowing that every part of our school system is important to our students and community.
Can the District use voter-approved Capital Projects funding, technology levy funds, or school construction bond measures to soften this general fund reduction?
No. While the technology levy can be used more flexibly to cover technology needs and the staff who support technology, it cannot be used for non-technology expenditures. The school construction bond dollars approved by our voters are used only to build and modernize schools and support facilities. Those funds are fully protected, and can only be used for the stated purposes. We will hold true to our promises to complete construction projects presented in our bond measures, including rebuilding Renton High School and numerous other projects.
Is this a short-term problem? What about the following year?
If enrollment continues to decline, and costs for insurance/energy/supplies, goods and services, and pay and benefits continue to increase, we will likely be in this position again and will need to be vigilant about aligning our expenditures carefully to our revenue.
What is Ending Fund Balance?
The ending fund balance is a bit like a savings account. There are two parts to it, reserved fund balance and unreserved fund balance. If the district spends less than our revenue each year, the remainder is added to fund balance. The reserved fund balance exists for assets we have for a specific purpose. This includes carryover – or unspent funds – from programs with inflexible expenditures. The unreserved fund balance is liquid cash – available to use on any district expense and available to cushion the months when our revenue from the State is lower, as we are not paid in 12 equal payments.
Our fund balance is currently at 4%. Both for the upcoming budget and beyond, we must begin the process of restoring the fund balance to our 7% target so that we have sufficient resources on hand, which places our district in a stronger financial position in the short and long term to address any unanticipated fiscal issues.
Why is Fund Balance important?
A school district fund balance is important because it allows the district to cover unexpected expenses, manage cash flow fluctuations throughout the year, maintain stability during economic downturns, and ultimately ensure the continuity of educational programs without major disruptions to classroom instruction, all while potentially improving the district's credit rating and lowering borrowing costs.
