Olympia School District ending fund balances dropping steeply after tax levy changes

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Executive Director Kate Davis briefed the Olympia School District (OSD) Board last Thursday, February 22, on the district’s latest Fiscal Report.

Davis shared that an estimated $5,474,013 from the House budget and $5,458,509 from the Senate budget is allocated for the upcoming school year 2024-2025.

McCleary compromise

Davis explained the McCleary decision, which protects basic education funding and cannot be cut for budget reasons, only for academic reasons.

In 2017, the House and the Senate passed their McCleary grant compromise, and the governor signed it shortly after. It had legislature fixes and was put out in 2018.

This caused the state to increase funding for state-funded employee salaries, Professional Learning Days, and health benefits under a new system, CTE class size, Highly Capable Program, Learning Assistance Program High Poverty Schools, Transitional Bilingual Program, and Special Education funding cap increase.

However, the state implemented a new levy system that cut local school district levy authority by nearly half and increased the state schools’ property tax.

This swap from McCleary to the state levy removed the mechanism to fund teacher experience and never fully restored it. It also underfunded staff benefits and became unresponsive to state investments in counselors, nurses, and special education.

“Having a levy allows us to have a lot more flexibility. But when they did this switch, they put a lot more funds into their categorical programs that didn't give us as much flexibility,” said Davis.

Davis added that the switch to a newer healthcare system also created an ‘unfunded mandate,’ and the district had to provide these health benefits to all workers.

2024-2025 projections

The chart shows OSD’s ending fund balance trend through the years.
The chart shows OSD’s ending fund balance trend through the years.

For 2022-2023, OSD had $165.5 million in general fund expenditures. This included objects such as certified and classified salaries, employee benefits, supplies and materials, capital outlay, travel, and purchased services.

“85% of we’re spending is on compensation-- certificated salaries classified salaries and the associated benefits. That is normal,” said Davis.

By program, these expenditures included regular instruction, support services, special education, vocational instruction, compensatory education, ESSER (activities that would have otherwise been classified under Regular Instruction), and other programs or services.

The overall enrolment of the district is 7.2% down since 2019-20. The estimated ending fund balance for this school year 2023-2024 is $8,370,927, while the estimated ending fund balance for 2024-2025 is $5,471,010.

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  • JW

    Overall enrollment is down 7.2%. Let's stop whining for more money and cut OSD down to match.

    Maybe we should see this as the perfect time to tear down the dinosaur public school system of a bygone era and build something for the 21st century...but there's too much money involved for it to die without a serious fight.

    Tuesday, February 27 Report this