Evergreen board advances $467 million 2025‑26 budget to second reading amid warnings of cuts and borrowing

The Evergreen Public Schools board on Aug. 12 voted to advance the district’s proposed 2025‑26 budget to a second reading after Chief Financial Officer Jennifer Jacobson outlined revenue declines and multi‑year fiscal pressures that will require reductions or other actions to restore reserves.

Jacobson told the board that the proposed general fund budget is about $467 million and that district enrollment has fallen roughly 5,000 students from its peak about a decade ago. She said the district expects to end the next fiscal year with a projected fund balance of $16.8 million, or about 2.5 percent of expenditures — below the board policy minimum of 5 percent.

Jacobson outlined three primary drivers of the shortfall: declining enrollment, inflationary increases in costs such as insurance and utilities, and inadequate increases in state funding per pupil. She said basic education funding from the state averages about $11,000 per student while Evergreen spends roughly $14,000 per student when basic education program costs are compared with district expenditures. Jacobson said special education costs account for a large share of the gap: the district expects a special education funding shortfall of about $17 million next year, funded currently from levy dollars intended for enrichment.

The CFO said the district began the year with a $32 million fund balance, spent about $10 million more than anticipated in 2024‑25 largely because of higher special education expenditures, and now projects a beginning balance of $22 million for 2025‑26. Jacobson projected ending unrestricted reserves of $10.8 million (2.5 percent) after anticipated deficits and said the board’s policy target of 5 percent will require a financial action plan to restore reserves over several years.

Her four‑year forecast assumed only inflation adjustments (IPD) for salary settlements and projected a path to rebuild reserves that would require roughly $11.5 million in reductions in 2027‑28 (about 62 staff positions) and additional reductions in subsequent years to reach the 5 percent target. Jacobson warned that any salary increases above the state IPD assumption would raise the projected shortfall further — she estimated about $2 million additional cost for each 1 percent above IPD for certificated staff.

Board members asked technical questions about cash flow, vendor payment terms and borrowing. Jacobson said the district may need short‑term interfund loans from its capital projects fund to meet low‑apportionment months and that such interfund borrowing requires interest and must be repaid within the fiscal year; she also described apportionment advances and the use of registered warrants as more extreme steps that carry additional cost.

After the presentation, Director Perkins moved and Director Bocanegra seconded a motion to advance the proposed 2025‑26 budget to a second reading; the motion passed unanimously. The CFO said she will close the prior year’s books in October and return with updated figures and a proposed financial action plan to restore reserves.

Discussion versus decision: the Aug. 12 meeting included a public hearing and board discussion; the board’s advancement of the budget to a second reading is an administrative step, not final adoption. The transcript records detailed financial projections, estimates of required reductions, and potential short‑term borrowing options, but no final staffing decisions were taken at this meeting.