Budget

2020-21 Budget Priorities Survey open until March 18

 

As preparation for the upcoming school year, the superintendent and Olympia School Board seek community, staff, parent and student input on the Olympia School District budget development. Due to recent changes in the state school funding system, the district is projected to face a deficit in the 2020-21 school year.

 

The deadline to complete the survey is Wednesday, March 18, 2020.

 

Take the 2020-21 Budget Priorities Survey


2020-21 OSD Budget Deficit and Frequently Asked Questions

 

Background

For the past three years we have communicated how the 2017 McCleary state funding “fix” had a detrimental impact on the Olympia School District. That funding system is the root cause of the financial difficulties we have faced each year since then and face again next year. You may recall the key issues including; the elimination of the teacher experience factor which harms districts with more experienced staff, or the higher cost to the district for the new employee health system, or the dramatic reduction in local levy funding with no commensurate increase in state dollars through regionalization that districts to the north of us did receive. We try to compete with those districts to attract, recruit and retain the highest quality staff possible, but it is harder to do with such a significant resource disadvantage.

Sadly, and not surprisingly, as we begin to build the 2020-21 budget, we again project a sizable deficit. But unlike last year, we don’t expect any significant funding enhancements from the state Legislature this session to improve our budget outlook.

Historically, we have always used the previous year’s ending fund balance as a basis for planning the following year’s budget. When we have been faced with increased costs, unexpected expenses (emergencies), or with a deficit like we are now, it has been helpful to have a more robust ending fund balance to offset any projected deficit or increased expenses. At our December 16, 2019 board meeting we notified the board that we will not have the benefit of a larger ending fund balance this year (August 2020) as we develop the 2020-21 budget. While we had already projected we would have a historically-low ending fund balance of 3.71% for the 2019-20 school year, we now project that number to be even lower at 2.04%. Because of this, we don’t anticipate having a larger beginning fund balance to offset the deficit in the 2020-21 school year.

Factors that contribute to OSD’s 2020-21 projected deficit:

 

  • Increased employer costs for Health Care or the School Employees Benefits Board (SEBB).
  • Like most school districts, Olympia has had an increase in labor costs. However, Olympia did not receive any “Regionalization” -- an arbitrary and inequitable increase in apportionment by the state to selected districts.
  • The state reduced the amount of money that pays for the extra cost associated with the education and experience levels of teachers. Olympia has a highly educated and experienced staff.
  • The state continues to under-fund adequate staffing levels in several specialized services such as nursing, counseling, and special education, and thus these staff are funded by our local levy.
  • We used $500,000 of the 2018-19 ending fund balance (savings account) to prevent other reductions during the 2019-20 school year. Drawing down our fund balance to temporarily respond to our deficit is no longer a viable option.
  • Even with the new revenue in programs like Special Education, we continue to fund our Special Education budget over the amount allocated by the state and federal government. We anticipate this gap to be in excess of $5.6 million for the 2019-20 school year.
  • Based on the factors above, our local levy has had to ‘back-fill’ state responsibilities for basic education. However, the amount that the state will allow our voters to contribute is reduced by 25.6% (from 2017-18 to 2019-20 school year).

 

Every dollar we don’t spend this school year can help us reduce less as we move into 2020-21. As a result, we want to make any cost savings that we can now, throughout the district. While we are always thoughtful stewards of our resources, we will be more deeply scrutinizing all expenditures, including travel, staff openings, materials and supplies, and more for the remainder of the year in order to seek out all possible savings.


Frequently Asked Questions Regarding Budget and Reduction Plan to Address 2020-21 School Year Projected Deficit


1. Why is OSD planning for a reduction in staff and programs?
Given our current financial outlook, OSD must reduce our expenditure plan to address a projected sizable deficit. (The district office is currently projecting costs against projected revenue, and will present the school board with a deficit estimate in mid-March.) Considering that approximately 84 cents of every dollar we spend is for staff salaries and benefits, the district cannot address significant reductions without reducing the number of staff that we deploy. Therefore, OSD will create a Reduced Educational Plan to reduce costs in the upcoming school year. This will include central office reductions, as well as school-based administrator, teacher and support staff reductions.

2. Can’t you cut spending somewhere other than staff?
We will first look at reducing Materials, Supplies and Operating Costs (MSOC) beginning in spring 2020 through the 2020-21 school year, not filling positions vacated by attrition, implementing travel restrictions, reviewing district costs for outside vendors/contracts, and more.

However, as mentioned above, approximately 84 percent of OSD’s budget is the workforce. The only way to significantly address the deficit is to reduce the number of staff.

3. In the event of a Reduction In Force of certificated staff, what is the process?
OSD will follow the Olympia Education Association (OEA) Collective Bargaining Agreement (CBA) language for a Reduction In Force. Because a Reduction In Force is a districtwide review of all OEA positions, all schools would most likely be impacted. Seniority and endorsements are key factors in the process. The seniority list has been sent to all certificated employees and is also available on the staff intranet.

4. When will OEA staff be notified about their position for the 2020-21 school year?
OSD will follow the OEA CBA language and state law that requires all certificated employees to be notified by May 15, 2020. (Non-certificated/classified staff, please see number 7.)

5. What about OEA staff attrition?
Attrition is defined as the gradual reduction of a workforce by employees leaving (e.g. resignation, retirements, etc.) and not being replaced, rather than through layoffs. While there is some attrition each year in OSD, the attrition anticipated for the upcoming school year is likely not sufficient to address the projected deficit.

6. Will class sizes be larger because of the reductions?
Given our projected budget deficit, class sizes will likely be larger across the district.

7. How will classified support staff be impacted by reductions?
All schools and district departments will most likely be impacted by reductions. OSD will follow the associated Collective Bargaining Agreements (CBA) and will work with our labor leaders around potential reductions. While there is no specific deadline to notify classified support staff, we will work with union leaders to notify them in a timely manner.

8. When will the school board decide to implement reductions?
The school board is scheduled to decide whether or not to authorize district staff to proceed with a reduced education plan on April 20.

9. Will job shares be allowed next year?
Job share assignments that meet the provisions of the contract (e.g. medical leave) will be approved; all other job shares will be reviewed.

10. How will staff be placed in another building if that is necessary?
OSD will follow the Collective Bargaining Agreements (CBA) and will work with our labor leaders around any transfers. Staff will be offered positions by seniority and will be offered positions based on their endorsed area. If multiple positions are available, staff members may be able to choose assignments based on openings that match endorsement areas.

11. Do classified staff have a seniority list?
Yes, all classified units have seniority lists that have been provided to the union. If you would like a copy of the list please contact your union representative or the Human Resources Department.

 


School Board approves 2019-20 budget

 

Below you will find information about the projected budget outlook for 2019-20, as well as the board-approved budget and related materials for this current school year (2018-19). If you have questions about the OSD budget, please contact the school district Business Office at (360) 596-6120. If interested in contacting Thurston County legislators about state K-12 funding, their contacts are listed below and on our Community Resources webpage.

 

Budget outlook for the 2019-20 school year

Updated May 14, 2019

 

Community budget forums canceled May 15 and 16

 

Community budget forums tentatively scheduled on Wednesday, May 15 and Thursday, May 16 have been canceled as a result of legislation passed at the end of the 2019 Legislative Session. The forums had been set from 6 to 8 p.m.

To learn more about how legislators addressed school funding, read the message below from Superintendent Patrick Murphy.

 


Message from the Superintendent/May 10, 2019

As a result of legislative action in the final hours of the Legislative Session on April 28, the projected budget deficit in our district has been reduced by nearly 80%.

While we will still have a deficit next school year, we will not need to invoke provisions for a certificated staff Reduction In Force (RIF). Rather, most of our remaining deficit will be addressed through savings such as reducing materials, supplies and operating costs; not filling a limited number of positions vacated by resignation or retirements; reducing curriculum adoption funding; reducing budgeted reserves; and reducing transportation expenses through route and monitor efficiencies.

These proposed reductions, shared at the May 6 Olympia School Board meeting, will be reflected in a recommended budget I plan to bring to the board at its May 20 meeting.

Thank you,

Patrick Murphy
Superintendent

 

Budget information prior to end of Legislative Session

On January 22, 2019, the Olympia School Board unanimously approved a resolution declaring the school district's legislative and funding priorities for the 2019 Legislative Session.

View the Resolution

2019-20 Budget Priorities Survey

As preparation for the upcoming school year, the superintendent and Olympia School District Board of Directors asked for community, staff, parent and student input on instructional and operational priorities and values for the 2019-20 budget. The budget priorities survey concluded on April 5, 2019, and results were presented to the Olympia School Board at the April 8, 2019 meeting.


OSD Facebook Live Budget Message/Forum Q&A

 




Hello Olympia School District Families,
Superintendent Patrick MurphyAs we enter the second half of the state legislative session, I am deeply disappointed to report that we have not seen lawmakers propose and support the kind of clear-cut financial resolutions to adequately address our projected $8.5 million budget deficit for the 2019-20 school year. We are at a point where we would be remiss in our duties if we did not begin more formal planning for spending reductions in the event there is no legislative fix, or an inadequate one, by the end of the session. Schools need to prepare their staffing and programs now for the coming year. We will look across our entire system to identify potential spending reductions while trying to minimize impacts to the classroom. We will again be asking for your help via an online budget survey to help us set budget reduction priorities. We will also use our recently adopted Student Outcomes, developed as part of ongoing Strategic Planning work, to help in this process.  For those of you unfamiliar with the history leading up to our projected deficit, we have been clear since the adoption of House Bill 2242 in 2017 that the so-called “McCleary fix” legislation did not help the Olympia School District. Instead, it resulted in a disproportionate allocation of revenue to districts across the state, thus creating winners and losers. Unfortunately, our district is in the latter category.  We have shared in previous messages to our community how the Olympia School District failed to receive state regionalization dollars. This is particularly perplexing as every other district on the I-5 corridor that touches Puget Sound received this money. Lawmakers have been unable to explain why we were left out of receiving regionalization given that Olympia housing prices exceed housing prices in several districts that received regionalization funds. 

Equally concerning, the state eliminated a long-time funding mechanism that apportioned more funds to districts with more experienced and thus higher-paid staff (staff mix funding). The elimination penalizes districts like Olympia with more highly educated and/or highly experienced teachers. In 2018, the Legislature agreed to allocate $2.3 million to Olympia beginning in the 2019-20 school year to address this problem, which we were grateful to receive. However, even with this new funding, we still would have received millions of dollars more and been better off under the state’s old funding model. This was confirmed by a recent study of the Washington Association of School Administrators. The association calculated that the Olympia School District should receive $5.9 million in hold harmless funding because our district, like 83 other districts in the state, would have been better funded under the old funding rules.

Additionally, state funding for our students with special needs continues to be inadequate. We subsidize our special education programming between $4 and $5 million annually out of our local levy funds. There is proposed legislation to increase state funding; however, the legislation we have seen is sorely lacking in its ability to make up for this subsidy. 

Without any regionalization and staff mix funding, we were especially hard struck by the new state-imposed restrictions on our local, voter-approved levy collection. The McCleary legislation imposed an arbitrary limit of $1.50 per $1,000 of assessed property value for school levies. As a result, our local levy collection has been cut in half. We previously used that levy to pay for teachers, nurses, librarians, principals and other critical support staff. Other districts in north Puget Sound with higher property values are collecting all or nearly all of their previous levy amounts. And in many cases, those same districts are collecting significant regionalization dollars on top of that. The result is that some districts saw hefty increases in revenue while others saw minimal or fractional gains. Once again, Olympia is in the latter category.

We have heard some legislators — not from our legislative district — declare that budget deficits are a result of school districts irresponsibly bargaining pay increases. To be clear, our district’s significant deficit was projected long before any salary bargaining had occurred. We value our staff greatly, as they are the key to the quality of our educational programming. We are committed to attracting, recruiting, retaining, and supporting the finest educators in the state, and we have. It is frustrating that we are planning for reductions to support this commitment while other districts are implementing enhancements. Again, this is due to the disparate revenue disbursement to districts as a result of the McCleary fix.

While we have been sharing the message about our projected shortfall with you for nearly a year now, as stated, we had hoped that there would be a clear legislative fix by now. The governor’s proposed budget and at least one proposed Senate bill (SB 5313) were encouraging, but the Senate bill never made it out of committee. A new House bill (HB 2140) is now under consideration, and while we remain hopeful there will be relief before the end of this legislative session, time is getting short in our budget planning process for the 2019-20 school year. 

We also want to make it clear that increasing the levy is not our preferred way to address the revenue inequities facing Olympia. We would rather legislators give us state regionalization or special education dollars; but, if those solutions do not become reality or do not close the gap, we believe our voter-approved levy should be an option for our community. 

We will continue to advocate, educate and implore our local legislators to help push through sensible, sustainable funding for the students and families of the Olympia School District. Many of you have asked how you can contact your local legislators. A list of our local legislative contacts, and more information about the budget, are posted on the school district website

Thank you for your ongoing support of our schools.

Sincerely,

Patrick Murphy Signature


Patrick Murphy, Superintendent


 

Related budget links:


 

Thurston County Legislators

 

22nd District:

 

35th District:

 


 

 

 

2018-19 Budget Information

 

2018-19 School Year

 

Information on the New Public Finance System

Impact of Inadequate Funding for School Nurses, Olympia School District
(posted August 18, 2017)

Olympia School District Financial Outlook Under EHB 2242
(posted on February 20, 2018)

Impact of Staff Mix Funding Elimination on Olympia School District
(posted on February 22, 2018)