The Lake Washington School District (LWSD) avoided another round of major state cuts to its 2012-13 budget while creating a stable spending plan that continues a crucial cushion for possible future shortfalls.
The LWSD board of directors unanimously approved Monday night a $238.8 million general fund spending plan and $151.1 million for the capital fund, which includes voter-approved construction and technology projects. The other district expenditures include $44 million for the debit services, $4.6 million for the associated student body fund and $1.3 million for the transportation vehicle fund, bringing the LWSD’s total expenses for the next fiscal year to $440 million.
The general fund, which pays for the majority of expenses, has a beginning balance of $19.8 million with an expected $237.2 million in revenues, giving the district $257 million in spending power, according to Barbara Posthumus, business services coordinator for the district.
LWSD is budgeting for $238.8 million in general fund expenditures, leaving $18.2 million left to transfer to the 2013-14 budget. The $18.2 million in general fund reserves more than meets the board’s five-percent balance requirement.
“We want to make sure we are reserving funds in case there are more state cuts,” Posthumus said. “There have been state cuts over the last two years so we have been conservative in how we spend our money.”
Over the previous two years, the state has cut $9.1 million in funding for the LWSD, forcing district officials to make difficult decreases to district programs. This year the state did not make any significant slashes — or additions — to education, allowing the district to avoid even more program cutbacks, according to Posthumus.
TAXPAYERS TAKE ON BURDEN
But Posthumus did warn that future cuts could be necessary “if the state doesn’t step up to the plate.”
In response to the downturn in the economy and two straight years of budget cuts, the state allowed the district to increase local tax levies by four percent, providing a $3.5 million boost in tax revenues to the 2012-13 general fund, Posthumus said.
Posthumus said the state is “continuing to shift the burden of paying for education to local taxpayers, but the good news is we as a district are fiscally sound.”
The levy lid increase is set to expire in 2017 and if the state does not boost funding for education that year, the drop in tax revenue could lead to future cuts, said Posthumus. This year’s $18.2 million general fund balance is there “to maintain a cushion for expected state budget shortfalls,” Posthumus pointed out.
The majority of the district’s general fund money comes from the state, almost 62 percent. Another 22.9 percent comes from local property tax levies, 6.3 from federal funds, 6.1 from fees and the rest from other agencies.
LWSD board members praised district staff with its forward financial thinking after voting 5-0 to adopt the budget.
“It’s not the ideal budget because we are learning to live with less and less, but at least the bleeding from the state legislature and state has stopped,” said board member Doug Eglington. “At least we are not realizing more cuts in this budget. That’s a relief. … It’s balanced and a responsible budget in my opinion.”
INCREASE IN SPENDING
The $238.8 million in general fund expenditures is a 3.24 percent increase from last year. The increase in spending is mainly due to a bump in enrollment, expenses involved with district’s grade reconfiguration plans to a K-5, 6-8, 9-12 model and federal grant increases, which drive expenditures up, according to Posthumus.
Posthumus said the district expects to see a total enrollment of 24,607 students in 2012-13 — an increase of 556 students, a little more than 2 percent.
The reconfiguration plan will cost the district $1.3 million to implement — less than half the cost of not doing the reconfiguration, Posthumus said.
“What’s important about that increase is if we didn’t reconfigure, we estimated we would have to build four new elementary schools and the cost of staffing those four elementary schools exceed the cost of reconfiguration,” Posthumus said.
She said the cost to staff four new elementary schools would be about $2.8 million.
A key increase to this year’s general fund budget is an $800,000 boost in federal Title I money, which provides assistance to students who are struggling to meet standards in areas of reading, language arts and mathematics, Posthumus said.
The district allowed public input after the budget proposal was presented to board members in June, but the district did not receive any comments. But the budget page of the LWSD website did get more than 200 hits, Posthumus told board members Monday night. In addition, no one commented at Monday night’s budget public hearing.
“Compared to the last two years, this was a much smoother budget process,” Posthumus said. “There were no significant cuts or adds. It was really a maintenance, moving-forward budget other than the changes we needed to make for enrollment and grants.”