Webb brings community up to date on school budget, legislative activity

||| FROM ERIC WEBB for ORCAS ISLAND SCHOOLS |||

I wanted to take a moment to reach out with an update on legislative activity and OISD’s budget planning for the 2023-24 school year.

Legislative Efforts

The Legislative Session in Olympia has recently transitioned to now focus their attention on budget writing and discussion. Just last past week, the Senate released their operating budget and the anticipated House budget was released on Tuesday. Unfortunately, these budgets fail to address the funding gap in K-12 education, which has added to the frustration felt by OISD and other school districts across the state as well as that of the Office of the State Superintendent of Public Instruction.

“Districts should not be forced to cut more programming and staff as learning recovery continues post pandemic, nor should employees lose ground to inflation.” … State Superintendent Reykdal

It appears that no legislative action will take place this year on Regionalization, nor will Levy Lid adjustments be made. The debate continues around Special Education funding, however. The current Special Education funding bills are but only a shell of the originals, having undergone different striker bills and amendments. Transportation Funding, which entered the session with much enthusiasm, has been reduced to a Special Passenger Net Program and an analysis taking place following the 2024-25 school year. Neither of these in their current form will generate significant funding for Orcas Island School District.

Significant and impactful Legislative change is a “long game”, and this year the District made an incredible amount of progress by establishing a foundation that we will build upon in the years to come. Due to your efforts and actions, our legislators in both the Senate and House of Representatives are now aware of the impact that Regionalization and the Levy Cap have on island school districts. I could not be prouder of this display of community support! I would also like to extend a special thank you to OISD’s School Board Legislative Rep, Bridget Broderick for leading a multi-district initiative to bring about change for island students!

Budget Process Update

OISD’s budgeting process for 2023-24 is well underway, and now in its second month. The first major budget component, setting of the Enrollment Forecast, was finalized this week during the Regular March School Board Meeting. The Enrollment Forecast is the driving factor that generates revenue within the budget.

Although it is never an easy task for the OISD School Board to predict student enrollment in March of each year for the following school year, it has been particularly challenging in a post pandemic year with multiple factors influencing student enrollment within our district as well as Washington State and our Nation. Setting the Enrollment Forecast requires a delicate balance, as there are consequences: a) if set too high, the district could see a negative midyear revenue adjustment b) if set too low, it places additional and unnecessary stress on the district to introduce possible staffing and program adjustments and/or reductions.

After a thorough enrollment analysis and much discussion, the School Board set the Enrollment Forecast for the 2023-24 school year at 652 student FTE. This is 50 student FTE below our current budgeted amount of 702 student FTE, or 46 student FTE below the March enrollment count of 698 FTE. This number is the perfect balance of being conservative enough to protect the district if student enrollment numbers should decline in our ALE School, while allowing minimal impact on reduction of programs and staff.

With the Enrollment Forecast determined, the next step in the budgeting process is to design and develop a budget on the determined revenue generated by 652 student FTE. The deficit in revenue created by a predetermined lower enrollment number is also compounded by the anticipated sun setting on pandemic-era federal stabilization funding (ESSER), declining levy stabilization funding, low Regionalization Factor funding, and inflation accelerating OISD (and other districts around the state) toward a “fiscal cliff.” This is the same “fiscal cliff” that State Superintendent Reykdal warned our Legislators of if they failed to take action on these items in this current legislative session. For OISD, these factors are creating an approximate budget deficit of $1.2 million.

This is a significant deficit, although not unexpected. We identified and have been preparing for this anticipated “fiscal cliff” over the past several years. Simply put, OISD is prepared and has the ability to make a “soft landing” as we enter the post McCleary Decision and pandemic years. In preparation for this day, OISD has increased its Fund Balance (savings) to an all-time high and will now use $600,000 of that fund balance to help offset the budget deficit and allow for attrition to take place to further reduce the budget. The use of these funds will still allow the district to maintain 10% of expenditures in fund the balance as per OISD policy.

Fund Balance and attrition will not eliminate the deficit in its entirety, although it will greatly reduce possible nonrenewal or reduction of staff. Over the next month, the district will continue to develop and refine the budget, set a Minimum Education Plan, look for ways to reduce expenditures that do not directly impact the classroom, and communicate on our progress as we navigate this time of limited budget resources. Please feel free to reach out to me with any questions that you may have.