Budget Q & A
Why does LWSD have to reduce the budget?
The state is expecting its revenues for the next two years to be substantially lower than in the past because of the recession. The current state revenue projections anticipate about a $9 billion deficit if state programs were left at the same level. The state legislature is now developing the budget for the next two years and we anticipate they will cut the money allocated for K-12 education by a significant amount. The district currently estimates that it will get up to $12.7 million less next year from the state than it did this year, though that number is offset by $5 million in federal stimulus money. The resulting cut of $7.7 million is 3.5 percent of the district budget.
What is the district’s current financial situation?
The district has a balanced budget and is financially stable. It last made budget cuts in 2006 to ensure a stable and balanced financial situation. This year’s budget cuts are due to the expected state budget cuts alone.
How will the district make budget decisions?
The district developed a budget screen in 2006 with the help of community, parents and staff members. It has gathered parent, community and staff opinion on that screen through a survey as well as asking what areas they want to see protected. The District’s internal representative group, DART, will use that survey information as it develops a preliminary list of potential areas to cut. A series of four public meetings will be held where community members will be asked to prioritize which budget items to continue to fund and what budget items to cut. Staff members will have an opportunity to do the same. DART will use the information from these processes to develop recommendations for the Superintendent. The Superintendent will make the final decisions on what items to include on the budget that he presents to the Board of Directors in June during a public hearing at the June 22 board meeting. The Board will vote on the final budget in August.
How do state budget decisions affect our schools?
State money makes up more than two-thirds of the district’s operating budget. Some of that money, about 14.2 percent in 2008-09, is earmarked for specific categories and cannot be spent on anything else. The rest of the state funding, 54.8 percent of the district’s operating funds in 2008-09, can pay for general expenses. Any change in the state funding portion of the general operating fund has a significant impact.
Will class size be affected?
The draft budgets have targeted both the Initiative 728 (I-728) funding that has been aimed at student achievement and state money that is used to reduce class size in kindergarten through fourth grade. Lake Washington School District has used its I-728 funding to reduce class sizes in kindergarten and first grade, so those grades get class size reduction help from both I-728 and the K through 4 reduction money. Depending on how much money is taken from these areas in the final state budget, class size could increase to as high as an average of 26 in kindergarten up to an average of 28 in fourth grade. As part of the budget process, we will be asking our community if they want to trade off other budget cuts in order to retain our current lower class sizes.
Will teachers or other staff members be laid off?
About 85 percent of the district budget is spent on people – on staff salaries and benefits for teachers, aides, support staff, administrators and others. It’s difficult to cut close to five percent of the budget without affecting people.
What programs will be affected?
At this point, the district must consider any programs that are not legally or contractually obligated. That doesn’t mean everything will be cut but everything must be considered.
Will special education be affected?
Again, the district must consider any programs that are not legally or contractually obligated. The district does receive some money for special education that is categorical, in other words, it cannot be spent for anything else. Those dollars would not be cut from the budget. We will also receive additional money for new special education efforts from the federal stimulus package –about $1.3 million of money that can’t be spent to replace money either cut by the state or normally spent out of local levy dollars. Another $1.0 million can be used to offset dollars the district contributes to the cost of special education in excess of what the state funds.
Can’t we stop adding more technology and use that money to fill the gap?
New technology is paid for through our capital levy: we are very restricted in how we use money from a capital levy. It has to go for buying assets – things that have value like computers or buildings – or improvements to assets or staff who work on installing, improving or building those assets. It can also pay for training to use the asset. So if we stopped buying technology, we would simply have more money sitting in our capital account. We cannot transfer it to the general operating account, where we need more money.
Why do we have plenty of money for capital projects but too little in the general fund?
The state limits how much money the district can raise through operating levies for the general operating fund, which pays for day to day costs including staff, services such as utilities, and supplies that get used up quickly like copy paper. Historically, the state put those limits in place so that students in school districts that did not have the property tax base or local support to pass local levies did not receive an education that was significantly different from the education offered to students who live in school districts that can get local support. It’s an issue of equity across the state. The state does not limit how much money we can raise through a capital levy. Capital levy dollars have to pay for assets – tangible things of value like buildings or equipment such as computers – or improvements to assets, like a new roof or heating system on a building, or related costs like training on how to use the asset.
What about delaying building new school buildings, such as Lake Washington High School, and use that money to fill the gap?
We borrow money to build new schools or modernize old ones by selling bonds. Money for the new LWHS and other modernization projects go into the capital fund. Those dollars, again, have to be used for their intended purpose. When we sold bonds to raise the money to rebuild Lake Washington High School, we promised that we would use the dollars for that purpose. We can’t move that money into the general fund or use it for any other purpose.
Can’t the district raise more money?
We are limited by the state in raising money through local levies. We do get some money from the Lake Washington Schools Foundation and PTSAs: those donations are even more vital now than ever. But we can’t rely on donations as a steady source of income. We can increase fees and have already increased the all-day Kindergarten fee for next year as well as some building use fees.
Can the district spend its reserves?
The district maintains a general fund balance of about $11 million, which is about five percent of the district’s general operating budget. The board of directors has set a target of a five percent reserve for several reasons. That cash reserve helps the district with its cash flow through months when expenses are high and revenues are low. It provides reserve funds for extraordinary or emergency expenses. It also gets the district better interest rates when it borrows money through bond measures to build new schools. It’s a good business practice to maintain this level of reserves.
Staff Questions
How will personnel reductions be decided and will seniority be a factor?
The collective bargaining agreements with various groups specify staff seniority and the Reduction in Force (RIF)/nonrenewal of contract process. Any changes in specific programs may also impact potential RIFs.
When will staff be notified about specific personnel reductions?
Staff will be notified of possible RIFs once the budget process has determined those areas. Notices of RIFS for certified employees must go out by May 15. Classified staff and those represented by other groups will be notified as soon as possible in accordance with their collective bargaining agreements. The district’s budget will not become final until the board approves it in August. Should changes in the budget take place after RIFS occur, staff will be recalled according to their Collective Bargaining Agreement.
Will the district recruit and hire for open positions for the 2009-10 school year?
The district may need to fill specific open positions that are funded in the 2009-10 budget. The overall level of hiring is expected to be very low for the next school year.
Has the district considered moving to a four-day workweek?
State law requires a 180-day school year. The state legislature would have to pass a bill to allow more flexibility in schedules before the district could consider such a move.
Will there be a cost-of-living adjustment this year?
All draft state budgets have eliminated any cost of living adjustments for school staff. As a result, the district will not be able to provide cost of living adjustments to any staff members next year, including administrators and the Superintendent.