A budget crisis in a public school system does not happen overnight. It is usually the result of a combination of factors that build over time.
Marysville School District’s current budget crisis causing the action to enter into financial binding conditions with the State did not happen overnight. Much of the cause has been building over time and was subsequently inherited by the superintendent and current district leadership team. “In my review of the Marysville School District’s current financial situation, I believe the District and my superintendent predecessors did the best they could to address the challenges that existed. Given that so many school districts are making reductions to balance their budgets, it is far-fetched and disingenuous to say that current budget challenges are due to anything other than a volatile financial landscape impacting schools and school districts across the state and nation,” said Dr. Zachary Robbins, Superintendent.
Although previously shared by the school district in past communications, some of the most common factors of a budget crisis are listed below. They are worth repeating to build understanding and clarity around the current situation:
Decreasing state and local funding: In recent years, many states have cut funding for public schools. This has been due to a variety of factors, including tax cuts, reappropriation of funds, and increasing demands on state budgets.
Increasing costs: The cost of providing quality education has been rising steadily. This is due to factors such as rising teacher and support staff salaries, healthcare costs, and special education expenses. Similarly, the cost of doing business has increased significantly, with expenses like insurance, fuel, utilities, materials, technology, and contracted labor adding to overall expenditures, often competing with instructional costs.
Unfunded mandates: Unfunded mandates are laws or regulations that require schools to provide certain services or programs that do not provide adequate funding to do so, such as Special Education, food/nutrition, transportation, and athletics, to name a few. This puts a strain on the school district budget.
Declining enrollment: In most areas of Washington and much of the United States, the number of students enrolled in public schools has been declining, particularly since the start of COVID. This can lead to decreased funding, as schools are funded based on enrollment numbers. In Marysville, enrollment has been declining over the past several years.
Changes in state funding: School districts rely on the state to provide a significant amount of funding for public schools. However, these funds are often cut or reduced, which further puts a strain on school budgets. An example of this is the loss of ESSER (emergency funding during COVID closures).
Inadequate funding: Even when there are no major changes in costs, enrollment, or state funding, public schools may still face budget challenges if they are not adequately funded. Our schools need a certain amount of money to provide quality education to students.
Meeting financial obligations: A school district must meet its financial obligations, such as fulfilling promised contracts, including bargained contracts, paying for operating expenses such as heat, lights, and fuel, and funding areas that are not fully covered by state funding to meet requirements of student’s individual education plans.
Eroding tax base: In some areas, the tax base is eroding, which means that there is less money available to fund public schools. This can be due to factors such as businesses closing or moving away, lack of affordable housing, mass apartment complexes, or an aging population.
When these factors combine, it leads to a budget crisis in a public school system, creating a number of negative consequences. These factors have all had an impact on Marysville, including:
Layoffs of teachers and staff
Cuts to programs and services
Increased class sizes
It is important to note that not all public school systems are facing budget crises but many more may in the future. Some school districts are better funded than others, and some have been able to weather the financial challenges. But, the problem of budget crises in public schools is becoming more widespread.
It is also important to note that in the Marysville School District, the finance department has carefully reviewed the budget and taken the necessary steps to address the shortfall, including preparing for binding conditions. When the initial budget was reviewed in the spring of 2023, the amounts were estimated based on what was known at that time. Between spring and the start of summer, revenues and expenditures have continued to be reviewed and monitored closely. In July, a preliminary budget was submitted to the ESD in accordance with state law. The preliminary budget submitted to the ESD showed a cash flow deficit of approximately $28M that would require the district to borrow money from the County Treasurer through the “binding conditions” process.
Since the submission of the preliminary budget, the finance department and human resources departments have continued their detailed work to analyze the preliminary budget and the thousands of data entry points for staffing and other expenses. This included meeting with large and small groups of staff and district-level departments to clean up any errors that may have been present and gone undetected.
As a result of these careful studies, the proposed budget is now showing a cash flow deficit in the amount of $17M, which is still a deficit, but about $11M less than the preliminary submission to the ESD. Even with this lesser deficit amount, the district will still be required to enter into binding financial conditions. The district knows with 100% certainty we will need to borrow money in the future to meet previously bargained agreements, including a full pass-through of the Inflationary Price Deflator (IPD - also known as a cost of living adjustment) and an additional, previously committed 3% raise for the majority of MSD staff.
As the Marysville School District looks to the future, the district is committed to addressing the budget deficit and working with state leaders and others to help prevent budget crises in public schools, including finding ways together to work towards:
Increasing state and local funding for public schools.
Controlling the rising costs of education.
Eliminating unfunded mandates.
Managing enrollment declines.
Strengthening the tax base.
Making schools more efficient.
Engaging the community in supporting public schools.
By taking these steps, we can help to ensure that all children have access to quality education; however, we know this process will take several years.