This section of the Community Report provides a snapshot of the district's finances and factors that affect our budget. For a complete report including a line-by-line operations budget, please see our Guide to Understanding the Financial Plan.
Issaquah School District is an urban school district of approximately 21,000 students, fifteen elementary schools, five middle schools, three comprehensive high schools, and a choice high school. Over the past two decades the district has experienced very rapid expansion requiring the addition of seven elementary schools, two middle schools and one high school. The growth continues and the District plans on adding four new school facilities in the next few years. Total enrollment will continue to grow at a quick and steady pace in the near term. Long term enrollment patterns will be dependent upon land use decisions and the overall pace of housing development.
The Budget Process
Each spring the budget process begins with the Board establishing broad parameters for budget development. (Adopted 1-23-2019) The Administration follows the Board’s parameters and reinforces these parameters during actual budget development. These guidelines have been observed and incorporated into the 2019-20 Budget.
From 2009-10 to 2011-12 (3 fiscal years) the District had cumulative reductions in state funding totaling nearly $16 million. State funding as a percentage of District revenues has dropped from 68% in 2008-09 to 60.8% in 2012-13. The trend of declining state revenue subsided in 2012-13 and for budget years, 2013-14 through 2016-17, there was an actual increase in state revenue. State revenue as a percentage of total revenue appears to have peaked in 2018-19 (71.4%) and will now comprise 71.2% of the District’s operating revenue, a slight decrease of 0.2% over the prior fiscal year. The State is now 3.2% above the recent historical peak in state funding as a percentage of total operating revenue.
The State legislature has continued to increase education funding pursuant to the McCleary decision, however a large portion of this “new” revenue comes in the form of salary and benefit allocations, making the funds less flexible than local levy dollars.
The legislature has provided significant structural changes to the education funding for 2019-20 and beyond, which included a decrease in local levy authority (capped at $2500 per student or $2.50/1000, whichever is less) this results in a decrease in calendar year 2020 of an estimated $19M in local levy collections ($59.7M vs. $40.6M). This drop in local levy funding is coupled with new restrictions on what and how local levy funds can be used to support and supplement basic education.
Overall, the increase in state revenue has allowed the District to make key programmatic investments, which as a community have been desired for many years. The District continues to have concerns on how local enrichment levies can be used in the future and the pending changes that are foisted upon us by the implementation of the School Employee Benefit Board who will subsume all of the health benefit plans for all K-12
employees across the state. The 2019-20 Budget reflects an increase in State funding for Health Benefits. The SEBB has expanded eligibility and looks now for the District to pay for staff whom opt out of insurance coverage and in some cases for substitute employees. This change will cost the local levy nearly $5 million annually.
In order to keep staff and community informed and seek input, we offer several communication avenues: the District creates a budget website with a timeline and ongoing updates; the School Board scheduled time at each business meeting for legislative and budget updates (podcasted for the public), administrators met with key groups such as the PTSA to provide updates; the District asked for comments and suggestions via a budget e-mail account, and the District shared information via eNews and staff e-mail messages.
The District receives funding from three primary sources. The State of Washington provides approximately 71.2% of the funding for general operating costs, the federal government provides 2.3%, and 26.3% is generated through local fees and the Educational Programs/Operations Levy (M&O).
There are 295 school districts in the State of Washington and 18 other Local Education Agencies that receive funding. Issaquah School District is ranked 257 out of 295 in terms of total revenue per student. The average district in 2017-18 received $12,966 in revenue for each student while Issaquah School District received $12,075 per student. This puts Issaquah School District at a revenue disadvantage of $18.4 million per year when compared to the state average per student rate.
The good news however, is that in 2018-19 the State Legislature (persuaded by the McCleary Decision) significantly changed Issaquah School District’s revenue per pupil predominately due to increased funding amounts for salary allocations.
The Issaquah School District is the second largest employer in Issaquah with over 2,800 full time and part time staff members. (This excludes several hundred substitute employees) These employees are represented by 1,400 teachers, 370 educational assistants, 135 bus drivers, 70 food service workers, 195 office/support staff, 140 custodial/maintenance personnel, and other administrative and support staff.
The District budget is represented by seven distinct cost centers. These cost centers encompass all of the above staff and help to present a visual picture of the district and its many programs and services. These cost centers are defined as follows:
Budgetary Goals and Philosophy for 2019-20
The Board of Directors and Superintendent have established the primary goal of funding a comprehensive educational program that reflects overall community values and directs resources in support of the District Mission and Ends learning goals for students. This endeavor is to be accomplished within the parameters of:
- The District Mission, Executive Limitations, and Ends learning goals for students.
- A comprehensive educational program which reflects overall community values and interests and provides an equitable and balanced educational experience for all students.
- Overall growth in student learning toward state and federal learning targets, as well as growth for each of the disaggregated This includes students working above standard.
A program that allows students to:
- Meet the requirements for a Washington State high school diploma;
- Meet the standards set forth by the Student Achievement Council for baccalaureate institutions or community and technical colleges to meet each student’s High School and Beyond Plan;
- Have access to student-driven opportunities to explore non- core options especially in the areas of CTE, STEM and the arts, providing career-connected learning;
- Consider student opinion in academic remediation and acceleration opportunities.
- Maintaining an unassigned fund balance of 3-7% of the general fund budget
- Establishing staff compensation and benefit levels that do not deviate materially from the local professional market, insofar as district resources allow
- Maintaining administrative costs at a level no higher than the King County average (Currently: 12.31%) for school districts. (Issaquah’s admin expense is set for 9.05% in the 2019-20 Budget)
- Maintaining and managing the district’s resources to protect district assets and guarantee the board’s financial goals, including an annual review of program that is sufficient to determine how much local Educational Programs and Operations levy must be collected/rolled back.
Major Budget Drivers for 2019-20:
- State revenue increase of approximately $10 million,
- The majority of this State funding was driven out via salary and benefit allocations. Comprised of a 2% IPD (Inflationary adjustment) and additional funds for the implementation of the School Employee Benefit Board.
- Projected enrollment growth of 120 new students.
- Loss of Local Levy Authority in 2019-20 of $4 million
- Negotiated salary increases of $4.3M
- $1.5M in increased non-employee costs; fuel, commodities, insurance, and utilities.
- Utilization of set-aside funds for the implementation of the 7th period schedule at Issaquah and Skyline High Schools (from 2018-19) $3.6M
- One time funds of $2.2M from no health benefit remittance in December of 2019.
- Draw down of reserve balances estimated at $2-3M
The 2019-20 budget is a fairly flat operating budget as compared to the 2018-19 budget year which was had the greatest investments in program the District has ever been able to make. We have to thank the State for increasing funding, the local community for supporting our levy measures. Finally, thanks to the Board of Directors for providing stable governance and supporting our students, staff, and community.