FY 17-18 Potential Budget Deficit

The state’s paramount duty is to fully fund public education and it has failed to do so.

To date the state has failed to carry out this duty. Districts, like Seattle, are forced to make up the financial difference by passing local levies and by asking our community and families to cover the cost of education services. The state only pays 70 cents for every dollar it costs to provide our students with the bare minimum of services. Each school year, our Seattle community provides an additional $100 million dollars in salary compensation, which is a state responsibility.

Unless the Legislature takes action to address school funding, the district has a projected deficit of $74 million for the 2017-18 school year.

This is the largest budget deficit we have faced since the late 1970s and has the potential to erode many of the programs, supports and services students are currently receiving. Closing the $74 million gap will be the most difficult challenge we’ve faced in decades. Right now there are many unknowns. These unknowns will cause challenges and disruptions to the good work that our schools, educators and central office staff are doing.

We want to thank our Seattle Legislative delegation for their continued support to provide ample and sustainable funding for K-12 education. They have been extremely helpful partners in supporting our next generation of learners.

Below you can watch a presentation by Tom Ahearne, lead counsel, Network for Excellence in Washington Schools, at the November 16, 2016 School Board meeting. In his presentation he explains the state’s failure to fully fund education and the impact on school districts.

This potential deficit is the result of two key failures by the state.

First, the state has not fully funded education as it is constitutionally required to do. While the Legislature has started to address their obligation regarding all-day kindergarten, class size, Maintenance, Supplies and Operating Costs (MSOC), and transportation, the state has been underfunding compensation for school district staff for more than 30 years.

Second, the Legislature has also made it impossible for our community to make up the difference by restricting how much we can collect from our voter approved levies. This has increased our 2017-18 budget gap by 30 million dollars and is known as the Levy Cliff. The Levy Cliff will happen, unless State Legislators take action by April 2017 and make adjustments to House Bill SHB 2893, an act relating to school levies passed in 2010.

Seattle Public Schools will need to plan for the worst-case scenario

Unless the Legislature takes immediate action, the worst case scenario must be planned for. The potential deficit will affect the entire district including central office supports (maintenance, programs, services, and accountability), support for teaching and learning, educators, school leaders and support staff. We will need to make significant cuts and or leave critical positions unfilled. Most of significantly, it will affect our students – the children that we have all committed to serve.

Initial reduction recommendations have been made that protect school services. These reductions, if approved by the School Board, could bring the gap down to an estimated $44 million. The budget reductions beyond this point will be challenging for all of us. Eight-five percent of our budget is salaries and much of the remaining budget includes fixed costs like utilities and insurance. Forty-four million dollars represents over 440 positions within the district. The worst-case scenario budget will be finalized on January 11 and lay the foundation for school-based budgeting in February/early March.

2017-18 Budget Development Guiding Principles

Seattle Public Schools values our students, our staff, and our families. We are committed to educational excellence for every student. We will work thoughtfully, diligently, and transparently to achieve the best outcomes possible for SPS students, while acknowledging that any budget cuts are not in the best interest of our students while facing unprecedented budget challenges.

2017-18 Budget Projections

This is how the district and student supports including staff are currently funded.

Seattle Public Schools receives funding from a variety of sources. The five major resource categories include state, local levy, federal, other revenue, and other resources.

Budgeted Resources by Type 2016-17


Budget Resources 16-17: 56.5% state, 25% local, 6.7% federal, 5.1% other revenue, 6.6% other resrouces

General Fund Expenditures 2016-17

A $74 million deficit is nearly 10 percent of our operating budget.

The pie charts below illustrate the breakdown of how SPS operating budget is spent.

General Fund 16-17: 60.8% teaching, 10.8% teaching support, 16.1% student support, 6.3% principals, 5.9% central office

Another way to look at this is to compare Direct Services and Support Services.

Direct and Support Services 16-17 81% direct, 19% support

Direct Services can be categorized in two groups:

1.) The school allocation budget which is managed by the individual schools, and

2.) Centrally held budget that pays for staff and supplies that are exclusively in the schools, such as teachers, nurses, instructional assistants, custodians and food service workers. This also includes the utilities that heat our schools and the costs of transporting students to and from school.

Support Services include the staff that do not work directly in the schools with students, but rather support the staff in schools and are instrumental to running a district. Support Services include the costs of processing payroll, paying bills, administering programs, managing grants and hiring staff. It also includes the costs of our technology team, our delivery drivers, warehouse staff and insurance.

 

2017-18 Budget Development Timeline

We don’t anticipate, based on the Legislature’s past practice that they will pass an approved budget until June 2017 and this will be highly disruptive for our schools, staff and students. The district will need to plan for the worst-case scenario in order to perform essential school and department planning for the 2017-18 school year.

Visit our 2017-18 Budget Development Timeline webpage

Action You Can Take

The district is actively lobbying our legislature to fully fund education. However, we are legally prohibited from encouraging the public to lobby on our behalf.

Learn More

Learn more and support the Seattle School Board’s resolution to ensure full funding of public education by visiting the Network for Excellence in Washington Schools' website.

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