Frequently Asked Questions
Budget and Reduction Plan to Address a Projected 2023-24 SY Deficit
The Olympia School District faces a significant budget deficit in the 2023-24 school year. Some of the factors for this deficit:
- Decline in enrollment, and therefore a reduction in state and enrichment levy revenue
- Depletion of ESSER funding
- Rising inflation
- Increased salaries and benefits costs
- Increased materials and supplies costs
- Special Education Program needs are not adequately funded and the enrichment levy is subsidizing this effort substantially
- The McCleary legislation in 2017-18 disadvantaged Olympia School District
As of March 2023, we project a $13.9 million deficit for the 2023-24 school year. This deficit estimate will be updated periodically. Below are answers to some of the most common questions we have received about our district budget, and the reduction in staffing for the 2023-24 school year needed to address this deficit. We will update these questions and answers periodically.
What is the deficit? What has changed since the district announced a $17.9 million deficit?
As of March 30, 2023, the district is projecting a 2023-24 school year financial gap between projected revenue and projected expenditures. At this time, the deficit is projected to be a maximum of $11.5 million, but could be as low as $9 million to $10.3 million depending on Legislative negotiations. This is an early estimate; a more refined estimate will be available in April as Legislative decisions are made.
Assuming a $10.3 million deficit, this is a reduction from our original deficit projection of $17.9 million for several key reasons:
| Multiple revenue and expenditure updates to August 2022 data |
$753,774 |
0 associated position |
Reductions in staffing associated with enrollment decline
|
$1,205,000
|
8.7 associated positions
|
Reductions in staffing associated with temporary positions (largely ESSER)
|
$1,928,000
|
13.2 associated positions
|
Increase in Projected Beginning Balance
|
$1,412,917
|
0 associated positions
|
Increase in Projected State Revenue
|
$2,204,575
|
0 associated positions |
Additional Technology Levy Revenue related to Qmlativ Conversion
|
$767,870
|
0 associated positions |
Higher Contingency Assumed (0.5% of Expenditures)
|
-$901,413
|
0 associated positions |
Assumed increase in revenue for Transportation
|
$250,000
|
0 associated positions |
Reduction in Deficit between $17.9 and $10.3 million
|
$7,620,723
|
21.9 associated positions
|
Why doesn't the district sell property that it is not using in order to help close this deficit?
State accounting guidelines and laws control which expenditures/revenue can be attributed to the General [Operating] Fund, and which can be attributed to the Capital [Construction] Fund. The purchase or sale of land is conducted in the Capital Fund only. Currently the 2023 Legislature is considering amending this law to permit districts to sell land and place the proceeds in the General Fund. However, legislation has not been enacted yet, and limits the allowable change only for land where a school cannot be built. All land owned by Olympia SD can support a school so if the bill is enacted as currently designed would not help Olympia SD.
Why doesn’t the district collect more of its [Enrichment] levy to close this deficit?
State law limits the amount of levy that a district can collect to a dollar amount per student. As enrollment declines, a district’s ability to collect Enrichment funds declines. Revenues over this threshold remain uncollected and taxpayers are not taxed for these amounts.
How much of the deficit is caused by lawsuit settlements?
No legal settlements are contributing to the projected deficit. Legal settlements are paid by the district’s insurer, including legal costs that the district incurs. Importantly, the district’s 2022-23 SY insurer is often not responsible for the legal settlement. The insurer at the time the plaintiff was injured governs the entity that pays the settlement/legal costs.
While our deficit next year is not impacted any settlement directly, but is impacted in a small part by the larger insurance market that finds covering school districts as less-profitable than other entity groups. Our insurance pool is working to mitigate these impacts so that insurers feel comfortable bidding on our group. Addressing the insurer reticence to enter/stay in this market starts with focusing on best practices for human resources, student care, and facility management and these are intrinsically of import to continuously improve, regardless of insurance costs.
How much has central administration increased over the last 4 years?
Since the 2019-20 school year, central administration has increased by 4.65 positions that are on-going. As background, the Olympia SD central administration expenditures totaled 6.45% of total expenditures in the 2021-22 school year; of 15 districts Olympia ranked ninth. Fourteen peer districts (of similar size and/or Thurston County) had an average central administration expenditure of 6.38%.
Why does the district support such special purpose / low enrollment programs?
Olympia SD seeks a balance between programs that are financially sustainable, and deployment of programs that are a good fit for student needs and educational best practices. As the full impact of the 2017 McCleary funding legislation has taken shape, the district’s ability to sustain low-enrollment programs is changing and we must revisit these decisions over time.
Why is OSD planning for a reduction in staff and programs?
Given our current financial outlook, OSD must reduce our expenditure plan by approximately $13.9 million. Considering that approximately 86 cents of every dollar we spend is for staff salaries and benefits, the district cannot address reductions without reducing the number of staff that we deploy. Therefore, OSD will be constructing 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.
Can’t you cut spending somewhere other than staff?
We will first look at reducing Materials, Supplies and Operating Costs (MSOC) beginning in spring 2023 through the 2023-24 school year, not filling positions vacated by attrition, implementing travel restrictions, re-negotiating district costs for vendors, considering furlough days and more.
However, as mentioned above, approximately 86 percent of OSD’s budget is the workforce. The only way to significantly address the deficit is to reduce the number of staff.
District leaders will have to make hard decisions; decisions we wish we did not have to make, but necessary nonetheless. We intend to keep our staff and all members of our community informed as we move forward as a district to ensure financial solvency.
How will decisions be made about school allocations?
We will make every effort to minimize cuts to the classroom. The Board will consider staff reduction options, community and staff feedback in a survey and public testimony, and then adopt a budget for the upcoming year.
How will certificated OEA staff be impacted in the event of a Reduced Education Plan
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 employees, all schools would most likely be impacted. Seniority and endorsements are key factors in the process. The seniority list has been finalized, has been sent to all certificated employees and is also available on the staff intranet.
When will OEA staff be notified about their position for the 2023-24 school year?
OSD will follow the OEA CBA language and state law for a Reduction In Force process. By law, all certificated employees must be notified by May 15. (Non-certificated/classified staff, please see number 7.)
What about OEA staff attrition?
Attrition is defined as the gradual reduction of a workforce by employees leaving 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 not sufficient to address the projected deficit.
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 Collective Bargaining Agreements (CBA) and will work with our labor leaders around potential reductions.
When will the school board begin the process to authorize reductions?
The school board will decide whether or not to authorize district staff to proceed with a reduced education plan for the 2023-24 SY in mid-April.
Will class sizes be larger because of the reductions?
Given our projected budget deficit, class sizes will likely be larger across the district.
How do recent proposed state budgets affect the OSD budget?
The governor’s proposed budget released in December would be helpful to the OSD. The House of Representatives and Senate have yet to weigh in on their own budget proposals. The legislative session will last at least 90 days and will finish at the end of April at the earliest. Given that timeline, and the potential for insufficient state funding, we must proceed with our reduction planning.
Will job shares be allowed next year?
Job share assignments that meet the provisions of the contract (eg. medical leave) and existing job shares may be grandfathered.
How will staff be placed in another building if that is necessary?
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.
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.