District Budget Update

May 9 2024

In response to significant budget constraints caused by factors such as lower-than-projected enrollment, inadequate state funding, and rising operational costs, the district has implemented several measures to maintain financial stability going into the 2024-2025 school year.

The district is currently facing a $12M deficit, originally $14M, and was directed by the School Board at the February 20 School Board Meeting to present a Budget Stabilization Plan for the upcoming school year, minimizing the impact on students and classrooms.  This represents approximately a three percent reduction in the district’s general fund for next year.

Background

Similar to school districts across the state and nation, the Puyallup School District faces significant financial pressures. These factors have necessitated a thoughtful realignment of staffing levels to meet current needs. With approximately 87 percent of the district operating budget dedicated to personnel expenses, adjustments are critical to maintain fiscal responsibility and meet students' educational requirements.

Significant factors driving the budget deficit include the following:

Enrollment

Student enrollment is a main factor in state funding, with projections determining budget allocations and basic education classroom staffing for each school and grade level.

Despite initial projections, enrollment this fall was 450 students lower than projected, resulting in $4.2 million less state revenue. Although enrollment has gradually increased, it remains 392 below projection. We are addressing this shortfall by examining department budgets and other areas. While current enrollment is below initial projections, we remain confident in our long-term growth forecast.

For the 24-25 academic year, we will adopt conservative enrollment projections that anticipates an overall flat enrollment, including a lower kindergarten enrollment. Consequently, some schools may experience a reduction in basic education teachers compared to the current year, with the exact number yet to be determined. It is important to note that schools’ staffing allocations will align with their projected student enrollment numbers.

Pandemic Relief Funding

The district's deficit can be partially attributed to the sunsetting of the American Rescue Act or Elementary and Secondary School Relief funding (ESSER), a crucial source of pandemic relief support. As these funds expire, the district must navigate the financial implications while maintaining a commitment to providing quality education and services.

Current Stabilization Plan Information

To achieve this, the following reductions will be made in four key areas:

Central Office Impacts - $5.6 million through Central Office restructuring, staffing allocation adjustments, expense reductions, and program modifications. Key actions include reducing an Assistant Superintendent position and implementing furloughs for unrepresented staff.

School Impacts - $5 million in school expenditures through staffing allocation and expense adjustments, program restructuring, and utilization of carryforward budgets. A significant portion of savings comes from provisional non-renewal employee reductions.

Districtwide Supports - $915,000 from unrepresented staffing allocation adjustments, mutually agreed-upon changes to bargained expenses, and department budget reductions.

Reduction to Fund Balance - Reallocating $500,000 from contingency fund balances, reducing the targeted reductions to $11.5 million. This measure prioritizes the district's financial stability while maintaining flexibility to address potential challenges.

Next Steps

As the 2024-2025 operating budget continues to be developed, it is important to note that this process involves a collaborative effort between various departments and stakeholders.

The final district budget will be brought to the Board of Directors for a public hearing and consideration to adopt in August 2024, providing an opportunity for community members to offer feedback on the proposed budget. Throughout this process, the district remains unwavering in its dedication to delivering quality education and direct services for its students and staff, while maintaining long-term fiscal stability.