Vancouver Public Schools is preparing for a 2019-20 budget shortfall of approximately $14.3 million. The projected shortfall is primarily due to major changes in the state’s funding system for K-12 schools, including the capped local levy rate and fewer state levy equalization dollars. Other factors are recent contract settlements and an anticipated decline in student enrollment. Passage of the education/operations and technology levies on Feb. 12 does not mitigate this shortfall.
The district previously announced budget cuts of $3.9 million in central administrative services for 2019-20 to address the shortfall. The district also will use approximately $3.8 million from the ending fund balance. This amount includes $1.5 million saved by a 3.5 percent reduction of central administration and school discretionary budgets and a hiring freeze on non-mission critical employees in 2018-19.
Among the 14 largest districts in the state with 20,000 or more students, VPS already is 4th lowest in expenditures for central administration. As a percentage of its general fund budget, the district spends 5.4 percent on district office functions. The average of the 14 largest districts is 5.9 percent. The 0.5 percent difference is approximately $1.65 million of fewer administrative costs already being directed to school-based services.
Reduction of reserve fund balance
The district’s current fund balance is approximately $30 million, however, more than two-thirds of the fund balance is restricted or locally assigned for special purposes and cannot be used to balance the budget. Furthermore, the fund balance is one-time money; it isn’t sustainable year after year.
Currently the unassigned portion of the fund balance is $8.3 million. Next year it is projected to be $5.8 million. After applying $3.75 million from the ending fund balance to address next year’s projected budget shortfall, the unassigned portion will be only 1.8 percent of the fund balance, significantly below the 3 percent target established by school board policy.
An expected decline of 458 full-time equivalent students next year will require 23 fewer full-time equivalent teachers. This adjustment will reduce the budget deficit by approximately $2.3 million.
Reductions in school-based services and staffing are necessary to make up the remaining $4.3 million shortfall. Preliminary recommendations were put forward to the board of directors at the Feb. 26 school board meeting.
A reduction of 33 full-time equivalent instructional staff and specialist positions not funded by the state would amount to approximately $3 million in budget savings. The average K-12 class-size impact of this reduction would be less than one student per class overall. Reducing clerical support by 185 hours per day district wide will reduce the budget by about $1.3 million. Some of the staffing reductions could be achieved through retirements and other employees seeking different opportunities.
“We don’t want to make these reductions in staffing,” said Superintendent Steve Webb. “We did not cause this budget shortfall. Our employees did not cause this budget shortfall. The problem lies with the legislative response to the McCleary court decision.
“I continue to advocate on behalf of our district and other districts across the state to ask our legislators to go back to the drawing board and fix school funding. It’s the state’s obligation to correct this situation and do what is right for our employees and for our state’s children.”
Update: Feb. 28
A Feb. 27 article in The Columbian stated the following:
“…the district has tens of millions of dollars more in funding now than it did in 2017-2018, the last year prior to the implementation of the state’s new school funding formula.
“According to budget documents filed with the Office of Superintendent of Public Instruction, the district’s general fund revenue was about $300.4 million in 2017-2018. In the 2018-2019 school year, the district’s revenue is expected to be $324 million.”
The $23.6 million in additional revenue for VPS between 2017-18 and 2018-19 is offset by the following increased expenses:
- The district has approximately $14 million in mandatory pass-through expenditures (e.g., state funds for employees’ medical insurance) and restricted-use dollars for specific purposes (e.g., bus operations; supplemental services to bilingual, highly capable and Learning Assistance Program students).
- The original four-year budget plan filed with OSPI assumed approximately $12 million of new revenue for additional salary and benefit increases for all employees and materials, supplies and operating costs (MSOC) inflation through 2019-20.
- That budget plan showed a $2 million operating deficit, which grew by approximately $10 million due to recently bargained contract improvements.