Our district’s student enrollment has decreased over the past few years. Many urban and suburban school districts lost enrollment during the pandemic, and we’d hoped they would return once the pandemic ended. That has not yet happened. Enrollment losses were mostly due to families moving out of the area and homeschooling. State Superintendent Chris Reykdal stated that regaining that enrollment will likely happen slowly and may not fully return to pre-pandemic levels.

Mukilteo School District lost 628 students since fall of 2019 which equates to about $6.3 million in funding. Another way to look at that is roughly the equivalent of an entire elementary school. Despite the decline in enrollment, we still must provide staffing, transportation, classroom space, etc. The Office of Superintendent of Public Instruction is communicating this funding structure issue with the Legislature, but we don’t know if or when they may address it.

One of the largest contributing factors to the budget issues facing school districts across the state is that in response to McCleary in 2018, the state changed public education funding formulas to rely more on state funding and less on local funding. While this was a short-term “win,” the state only funds basic education, programs and salaries. Given our location and services, the district backfills the gaps between what the state provides and our actual expenses. However, the state limited how much districts could collect locally and has slowly reduced the regionalization funding we receive to help offset the higher cost of living in our area. Our district’s regionalization funding has decreased two percent each year since then, starting at 24 percent and decreasing to the current 18 percent. As we all know, cost of living has not decreased over the past few years. In fact, inflation has increased living costs.

Another cause of the funding shortage is increased costs not covered by the state. In the past several years, staff pay rates increased with a significant driver being an inflationary measure the state sets that is called the Implicit Price Deflator (formerly known as COLA, or Cost of Living Increase). Last year we saw high Implicit Price Deflator and a similar increase is expected again this summer.

While this is good news for staff wages, the state only funds certain positions and at a basic pay rate. The district pays the difference to pass on the benefit to all employees and at the competitive wages we’ve come to expect in our region. That money comes from the district’s general budget. The estimated impact of that increase is about $6 million annually for our district.

Other costs such as supplies and contract services have also increased, making current “status quo” services much more expensive than in past years. New family leave benefits, COVID-related leave and other extended leaves and the substitutes to fill those positions cost the district about $750,000. The district also covers the gap in what the state funds for special services and the actual costs. The district typically pays about $5 million above what the state funds in a school year, but that has increased to about $13 million this school year. Most of these services are legally required, but not fully funded by the state.

You might be wondering about the money the district received during the pandemic. Those Elementary and Secondary School Emergency Relief (ESSER) funds were one-time funds and have been allocated. They helped delay this funding shortage and got us through the pandemic with needed supplies and services, but it was a temporary fix. The end of ESSER funding represents about $14 million next school year.