Olympia School District projects $7.93M ending fund balance for 2024-25 school year

A combination of spending more money amid a backdrop of less revenue coming in is taking a bite out of Olympia School District (OSD) finances.

The school district is projecting a $7,931,947 ending fund balance for the school year 2024-25, which is down from a beginning fund balance of $10,186,316.

“This year, we started with a higher fund balance than anticipated, and we're going to probably still end with about a very similar ending fund balance as we anticipated,” said OSD Executive Director of Business and Capital Projects Kate Davis, who noted the district is spending more money than the revenue coming in.

 Misaligned calendar and state funding issues

OSD Superintendent Patrick Murphy said that the misalignment of the calendars of the state and the district poses challenges to budget planning, as the district prepares a budget for the upcoming fiscal year.

“This is my eighth year in the school district, and this is the eighth time we've gone through the ... preliminary budget process. … It is not a good thing that the state budget and school district budgets are not synchronized,” Murphy said.

Gov. Bob Ferguson is currently proposing a $4 billion budget cut to alleviate the possible deficit of at least $12 billion, according to an article from The Washington Standard.

“We are making decisions, bringing proposals, bringing information to the board with a lot of unknowns,” Murphy said.

However, the McCleary decision, named after the Mathew and Stephanie McCleary et al., v. State of Washington case, safeguards basic education resources by ensuring funds can only be cut for academic reasons and not for budget reasons.

“Roughly 43% of the state's budget is K-12, and most of that is basic ed that cannot be touched. So, when the state's talking about making cuts, this is what they're talking about (that) they can't cut,” Davis said.

There are, however, some risk areas in the budget that the legislators can cut, such as Transition to Kindergarten, School Food Services and Transportation Safety Net programs.

 Enrollment

Davis explained that the district is funded on an annual average Full-Time Equivalent (FTE) enrollment, and OSD is estimating ending the school year with an annual average of 8,970 FTE students.

“We are doing a little bit better than last year, but … it's just about 20 students, which isn't going to drive enough funding to make a big difference,” Davis said.

The 2025-26 enrollment is estimated to decrease by 121.7 FTE, which is attributed to several years of low kindergarten enrollment.

Enrollment is the main driver for OSD’s “enrollment-driven staffing,” meaning the number of students determines the number of staff. The state also drives the district’s funding based on the number of students.

An approximate $1,475,000 total reduction in state funding also impacts the special education funding.

Special education is based on a percentage of students enrolled in basic education. The state also puts a cap on the percentage of covered students equal to 16% of the district’s total student enrollment.

Davis explained that if base enrollment goes down, special education is going down as well.

“We are not able to fully reduce by that exact same amount … the state takes it all together as one ball. However, we have it spread over our 19 schools. We have it spread over all of … the 13 grades,” Davis said.

Davis added that OSD is not able to achieve the same savings that the state puts in their prototypical model.