Superintendent’s Blog: Our Financial Reality and Budget Planning

Dear BSD Community, 

Happy New Year and welcome back from Winter Break! Last night, I saw many of you at Sammamish High School for the Eastside Town Hall on the School Funding Crisis. Educators, parents, board members, legislators and amazing students from Bellevue, Issaquah, Renton, Mercer Island, and Lake Washington came together (standing room only) to address the financial challenges our districts are facing. Huge shout out to Kristi Schwesinger (BSD parent and Bellevue PTSA Council Advocacy Director), School Board Director Jane Aras, Bellevue Education Association President Jill Rock, leaders from the Bellevue PTSA Council, and so many others for planning the event. Thank you to those who were able to be there. There will be other opportunities like that to learn more and get involved. 

In these first few months of 2025, we’re going to embark on some important and challenging conversations as a school district community about our finances, budget planning, and the need to cut spending in order to align our spending to our revenue from the state. When you have a minute, take a look at the information below that shares our financial reality, how you can share your input, and what we’re doing to advocate for more funding in this upcoming legislative session.

Our Financial Reality 

Like practically every district across the state, we are grappling with a substantial budget deficit caused by rising costs, increased student needs, and inadequate state funding. Since COVID, we have been spending more than we receive in revenue, leading to the depletion of our reserves below the 5% required by board policy.  

Three main state funding shortfalls are driving this crisis: 

1. Materials, Supplies, and Operating Costs (MSOC): Rising operating costs and inflation have left us underfunded by nearly $30M since 2020, with an annual funding gap of approximately $9M. 
2. Special Education: State funding continues to fall far short of meeting the needs of our students with disabilities. Since 2020, we’ve spent $133M more on special education than the state has provided, using local levy funds to fill the gap. 
3. Transportation: In the current school year alone, we’ve had to cover a $3M funding gap for transporting students to and from school. 

To put us on a path to restoring our financial stability and realign our spending to meet the revenue we receive from the state, we will need to reduce spending by approximately $16M for the 2025–2026 school year. That’s on top of the $10M that we are already working to cut from this year’s spending. This means making tough decisions about programs, services and staffing. 

Your Voice Matters: How You Can Share Your Input 

In the upcoming weeks, you will have several opportunities to share your questions, thoughts, and input on how we can reduce spending, generate revenue, or prioritize trade-offs. Here’s how you can contribute: 

Attend a community listening session 

• January 21, 4:00 – 5:30 p.m. at Odle Middle School, or 4:00 – 5:00 p.m. online (join on Microsoft Teams) 
• January 22, 5:00 – 6:30 p.m. at Wilburton Instructional Service Center (WISC) in the Rainier Room 

Email your suggestions to communityinput@bsd405.org or respond to the survey we’ll be sending soon. 

• A frame that some districts have used to gather input is: “If given the choice, I’d rather preserve more of X and reduce some of Y.” 

These conversations will help us craft a spending reduction proposal for 2025-2026 and create a restoration plan for prioritizing programs, staff, and services if additional funding becomes available from the state. 

Advocating for Ample and Equitable Funding from the State 

While we work to align our spending with revenue, we’re also fighting for change at the state level. Our School Board, labor partners, PTSA and I are advocating for ample and equitable funding for public education. The only way to preserve the supports, services and quality of education our kids deserve is to increase funding to all school districts in this upcoming legislative session. 

Looking Ahead 

The next few months will be challenging as we navigate difficult conversations and decisions. Our goal is to develop a spending reduction proposal that we will share with the board on February 6. There will be additional opportunities for staff and the community to comment on the proposal before it goes to the Board for approval on March 13. It won’t feel good for any of us to make cuts to things we know our kids need. However, I’m confident that doing this hard work to right-size our budget and more importantly by securing more funding from the state, we will emerge stronger for our kids and community and each other. 

We’ve overcome tough times before — through the pandemic and school closures — and we will do it again. Thank you for your dedication to our students and this community. 

Wishing us all a hope-filled and thriving 2025. 

Kelly