Dear HSD Community:
Spring is always a busy time in schools - academically and financially. Each year, Hockinson School District undergoes a state audit and begins building its budget for the following school year. While I am happy to report that our district received another clean financial audit for the 2024-25 school year, I also have some difficult news to share: We are struggling to balance our projected 2025-26 budget. Although the state’s proposed biennial budget has not yet been formally approved by Governor Ferguson, it likely represents the best case scenario for funding - and that “best case” still falls short of our personnel and operating costs. Also, as we approach mid-May, we are confronted with employee notification and budget timelines. All of this leaves me with the reality of making decisions that I don’t want to make, but that I have to make to keep next year’s expenses in line with state funding and levy revenue.
Budget Outlook
Like many districts across Washington, HSD is grappling with a growing gap between what the state funds and what it actually costs to run schools. Despite reforms, state support isn’t keeping pace with rising costs in staffing, healthcare, and operations. Over the past five years, our state's investment in K-12 education has declined as a share of its overall budget (52.4% in 2019, to 43.1% in 2024).
Thanks to careful planning and collaborative negotiations with our labor groups, the HSD has avoided budget cuts for the past three years. As we look to next year, our district is still in a healthier financial position than many of our neighboring school districts and districts across the state. Unfortunately, that does not mean we will avoid the need to make reductions at the administrative, certificated, classified, and program/school/department levels.
I regret that some of these reductions will impact members of our school and district teams. Approximately 87% of our district’s budget is dedicated to staff salaries and benefits. With nearly $9 of every $10 going toward personnel, it is sadly unavoidable that reductions in spending will impact our people. We have included a high-level breakdown of district expenditures and other budget information on our HSD Budget website here.
2025-26 HSD Budget Reductions
A preliminary staffing proposal and enrollment forecast was shared at the School Board meeting on Monday, April 28. To protect classrooms as much as possible, we are prioritizing cuts furthest from student programs. Action steps under consideration include:
Prioritizing reductions in superintendent, district, and school administrators’ salaries and other contractual expenses such as professional development funds and paid time off next year.
Reducing some employee work assignments and work days. We will also consider implementing furlough days and reducing professional development funds for some staff.
Deferring technology and curriculum replacement cycles.
Trimming building and department budgets. Wherever possible, we will look to cover expenses and maintain student-centered programs using grant and levy funding.
Scaling back utilities, paper use, tech subscriptions, and non-essential maintenance.
Budget Timeline
April 28: Preliminary enrollment forecast and staffing proposal presented to the School Board.
This week: Staffing and/or program proposals for 2025-26 have been shared with union leadership. Team members affected by staffing changes will be notified as soon as possible.
May 28: Updated staffing and budget proposals will be provided to the School Board.
Early June: Staff and community members will receive a more detailed update about programs impacted by budget reductions.
June 9: The formal 2025-26 budget proposal will be presented to the School Board for approval.
Understanding Washington’s School Funding Dilemma
Districts across our region are feeling the impacts of inflation and declining state investment in K-12 public education. Five major factors are impacting school budgets:
Declining State Investment: As I mentioned above, Washington State’s K-12 education budget has not kept up with actual costs, even as the state’s overall operating budget has increased.
Rising Costs: Increases in materials, supplies, and operating costs have far outpaced revenues. For example, Hockinson School District’s insurance premiums have increased 212%, and fuel costs are up 39% since 2019.
Declining Enrollment: State funding is tied to student enrollment, which is down statewide. Factors include lower birth rates and an increase in home and private school enrollment.
End of Federal Relief Funds: School districts used temporary federal relief funding to fill the gap between actual student needs and what the state funds for school nurses, academic recovery, counselors and more.
Depleted Reserves (emergency fund): Some school districts have been spending down their reserves in order to balance budgets. School Board policy requires Hockinson School District to maintain a minimum fund balance of 8% to pay staff on time and preserve our credit rating. The HSD is currently at that 8% minimum.
How HSD Has Responded
Despite these challenges, HSD has taken proactive steps:
Every year, we are cautious in forecasting our enrollment and budgeting to reduce the risk of overspending.
We received a relatively low amount of pandemic funds and spent what we did receive conservatively so we could manage their eventual end.
Secured over $2 million in competitive non-recurring grants over the last five years to enhance safety and efficiency.
Launched a Transitional Kindergarten program to support early learning and stabilize enrollment.
Maintained one of the lowest levels of per-student spending among school districts in Clark County.
The Importance of Local Support and a Commitment to Students
As mentioned above, state funds cover only a portion of what it really takes to fully fund public education. For example, state funding provides just two nurses for our three schools and covers 70% of classified employee costs. Local levies fund the rest, along with extracurriculars like music and sports - not to mention curriculum, maintenance, and staffing. 1 in 7 staff positions in Hockinson School District are supported by levy funding.
I know this is a long message, but this is a complicated and important subject and I want to make sure our staff, families and community have ample information. I also want to express my appreciation to the HSD staff for their continued dedication and to our community for its understanding as we respond to this funding shortfall. As we do every year, our district will continue to practice financial responsibility and prioritize student programs. It is truly unfortunate that this situation cannot be solved without making difficult reductions. In spite of our funding and staffing challenges, I take heart knowing that our team of school leaders and staff will continue to give our absolute best to Hockinson students every day.
Sincerely,
Steve Marshall
Superintendent