Board receives budget update: legislature’s actions add roughly $1 million in funding, $50-per-student one-time payment

Snohomish School District finance staff briefed the board May 14 on the state legislature’s operating budget and other bills that affect district finances, estimating roughly $1 million in new recurring and one-time funds and describing program- and policy-level changes that will affect operations.

Tom, district finance staff, told the board the Legislature set an Implicit Price Deflator (IPD) of 2.5% for 2025–26 and 2.6% for 2026–27 that the state uses to calculate salary funding and MSOC (Materials, Supplies and Operating Costs) increases. The Legislature also approved a one-time payment of $50 per student for 2024–25; the district expects just under $500,000 from that payment, payable in June.

Tom said MSOC increases will provide roughly $35.27 per student for regular MSOC and an additional $4.69 per 9–12 MSOC, together amounting to about $360,000 for the district. Changes to special education funding multipliers were estimated to provide roughly $700,000. “So between MSOC and special ed, we're getting approximately a million dollars more in funding next year,” Tom said.

He also reported the Legislature lowered retirement rates, which reduces the state’s funded retirement cost and produces net savings for districts. The legislation eliminated a special-ed payment cap previously set at 16%; the district was not at that cap so it expects no direct change from that provision.

On transportation, Tom discussed Senate Bill 5009, which allows reimbursement for using cars or vans to transport students and to capitalize those vehicles on a depreciation schedule in the STARS transportation formula. The bill’s effective date was described as Sept. 1, 2026, but state implementation details mean the district may not see financial benefit until Sept. 2027 when vehicle categories are bid and depreciation schedules implemented. OSPI will develop rules for drivers; a district staff member, Veronica, volunteered to seek a seat on that OSPI committee to represent district interests.

Tom told the board the Legislature funded transition-to-kindergarten for 2024–25 and capped funding at current enrollment; for the district the cap is 59.1 FTE for next year.

He also described insurance market pressures. The district’s insurer placed districts into three tiers based on prior claims; Snohomish School District was placed in the lowest tier with a not-to-exceed insurance rate increase of 8%, a change Tom estimated at roughly $160,000. He said other districts faced much higher increases up to 22%.

Tom and board members discussed safety-net calculations for special education funding; legislation reduced the safety-net threshold factor from 2.3 to 2.0, which lowers the threshold for qualifying for state safety-net payments but overall allocations and final payments remain subject to legislative limits and possible adjustments.

Board members asked several clarifying questions; Tom said the governor had not yet signed the budget at the time of the briefing and that some details depend on final enactment and OSPI rulemaking. No formal budget action or changes to the district budget were taken at the meeting; staff said they will present the draft budget on the district schedule and will return to the board with recommended allocations.