Northshore trustees hear budget update as state funding lifts fall short, levy authority eyed

Northshore School District officials on May 12 told the board of directors that modest gains in the state biennial budget and one-time payments will not fully close the district’s funding gap and that the district will likely need increased local levy authority to avoid recurring cuts.

Deputy Superintendent and Chief Financial Officer Jolynn Berge opened the study session by calling it “just an informational update for the board” as staff walked members through legislative funding changes, cash-flow shifts and the district’s restoration plan for restored positions and services.

The update matters because the district’s four-year forecast still shows expenditures outpacing revenue without additional local levy collections. “We are anticipating a few more dollars that we can apply back to the restoration plans,” Superintendent Tolley told the board, while cautioning the board that final amounts depend on legislation that, as of the study session, was not yet signed by the governor.

At a glance: Berge said special education funding will increase by about $1,470,000 next school year and Material, Supplies and Other Costs (MSOC) policy-level funding will rise about $860,000 (roughly $35 per pupil). The district received roughly $1 million in one-time K‑3 reversion funds for 2024–25 that will be paid in June based on April average annual full-time-equivalent enrollment, Berge said. She also said special-education multipliers were adjusted upward (reported near 1.16), and that some cash‑flow provisions — including a move to quarterly payments for certain special‑education reimbursements — could ease timing pressures.

Still, staff said those increases cover only a portion of next year’s projected costs. Berge told the board that special education expenditure growth for Northshore next year is likely to be “north of $3,000,000,” with the state’s multiplier and safety-net changes covering roughly half of that cost.

Board members and staff described several technical changes that affect district accounting and future eligibility for state safety-net awards. Berge explained a change often referred to in the presentation as the “basic ed back out” (3121) that shifts how revenues are recorded on safety-net Worksheet A and that, for Northshore, reduces the worksheet’s calculated need by about $1 million because of an accounting change rather than an actual revenue increase. Director Sotak warned that some of the law’s changes “[are] penalizing us for being more inclusive,” referring to how time-in-general-education reporting may change the district’s displayed least restrictive-environment metrics.

On levy authority, Berge said the legislature increased maximum levy authority by $500 per pupil beginning Jan. 1, 2026; that authority would require a local voter approval to collect and, if approved, collections would begin in 2027. The new law ties levy growth to 3.33% plus the Consumer Price Index and includes a further step-up around 2031 that staff estimated could raise maximum per-pupil levy capacity toward roughly $5,000 by 2031–32. Berge framed the district projection models around scenarios: (1) collecting the maximum new levy authority and restoring class sizes, (2) collecting the maximum levy without class-size restoration, and (3) no levy increase and no class-size restoration.

Board members pressed staff on assumptions and risk. President Cast asked whether the model already accounted for a roughly $1 million reduction in safety-net eligibility; Berge said the effect could make projections “even worse” and that final outcomes depend on details still to be finalized by the state. Director McGourty and others sought clarity on the class‑size scenarios and the extent to which restored positions are included in the forecast. Staff said the recommended forecast to present publicly assumes the district would ask voters for maximum levy authority while not immediately restoring all prior class-size reductions.

Staff described specific elements of the proposed local restoration plan tied to the anticipated incremental funding. The plan would restore all high‑school assistant principal (AP) positions and 6 of 11 dean positions at identified schools (Canyon Creek, Canyon Park Middle School, Fernwood, Maywood Hill, West Hill and Hollywood Hill). Central-office reductions eliminated some director-level positions; duties will be reassigned and the central-office reorganization will create new titles, including an Executive Director of Organizational Change and Student Advancement to oversee Racial and Educational Justice (REJ), student services, MTSS and AVID. Early-childhood restructuring also will convert 1.0 and 0.5 assistant principal roles to two assistant-director positions to support transitions from early learning to kindergarten.

Berge noted the district’s ending fund-balance estimate for 2024–25 sits higher than earlier forecasts (an estimated $11.4 million total ending fund balance and an estimated board reserve near 1.2%), partly because of one-time funds. But staff repeatedly cautioned that many modeled outcomes depend on: (1) the governor signing budget bills and related provisions, (2) whether federal grants include assurances that districts would accept, and (3) successful voter approval of increased levy collections.

No formal vote or action was taken. Staff said the timeline calls for a preview of the full proposed budget on June 23 and for the board to receive a budget to recommend for adoption on July 14. Berge asked the board for direction on whether to proceed with the forecast that assumes maximum levy authority; several directors urged an earlier “big picture” community conversation about the total levy amount the district should seek.

The board and staff discussed the broader policy trade-offs: whether per‑pupil, prototypical models mask differences in student needs, and whether increased reporting requirements and accounting shifts set incentives that could make inclusionary practices more expensive but not better funded. Director Hayes characterized education as a service that resists efficiency-based cost-cutting: “You can’t put 70 kids in a classroom and make it more efficient,” Hayes said, arguing that the district should frame funding conversations around educational quality rather than efficiency.

Next steps: staff will refine the assumptions and present updated forecasts at the June 23 study session and a budget recommendation at the July 14 meeting. Any decision to place an increased levy before voters would be a separate board action requiring public engagement and formal board approval.