Declining enrollment, inflation among issues affecting NKSD budget

Declining enrollment, inflation and the end of federal COVID funding support are just some of the issues affecting the North Kitsap School District budget development process for the 2023-24 school year.

The budget update was presented at the March 23 NKSD school board meeting.

NKSD is feeling the effects of enrollment decline, as are most school districts nationwide, documents state. As of February, the district’s enrollment is just above 5,100 students. The district is also overstaffed by design to support students post-pandemic.

Also, local levy collection in tax year 2024 will be limited by enrollment cap, which will affect the total revenues for NKSD next school year and beyond. Additionally, even though the district gets inflation-adjusted revenue from the state, levy dollars are not, which presents challenges when seeing costs across the board impacted by inflation.

Regarding federal COVID funding support, ESSER helped prop up funding for districts across the nation during and after the pandemic, per documents. The funds have now been expended and are no longer available and numerous districts are having to end additional support.

ESSER funds have been used to provide additional support to students coming out of the pandemic. Support consisted of additional staff to help limit class sizes as well as specialized support teachers to implement blended learning, AVID, and MTSS strategies.

Because NKSD expended ESSER funds across different years, the fund balance was larger than normal coming into the current academic year, documents read. The district budgeted for a deficit spend for the 22-23 academic year knowing that the fund balance would be used to offset revenue shortfalls. The fund balance will be normalized by summer 2023. It is “one-time money” and cannot be used for continuous expenses as it is not sustainable.

A legislative update was also provided, which states the IPD (inflationary index used by the state to apportion salary revenue) will come in at 3.6 to 3.7 percent. A small increase in special education funding is also expected but a transportation funding fix will not happen this session.

“We have limited legislative action, and limited inflationary relief,” the presentation reads. “We must take action to maintain stability and solvency. This includes many difficult decisions about programs and personnel. Again, we are not alone in this struggle. Districts across the state are all experiencing the combination of these … impacts.”