Kent School District previews 2025-26 budget, warns multi‑year deficits could require cuts

Kent School District finance staff presented the proposed 2025‑26 general fund budget at a public meeting on June 11, telling the Board the district expects a $14.9 million deficit in the coming year and that deficits grow in subsequent years unless the district takes balancing actions.

The presentation was led by Earl Perringer, Executive Director of Finance, with Lisa Tyler, Director of Budget. Perringer said the district is projecting $555 million in revenue and $570 million in expenditures for 2025‑26, producing the $14.9 million gap. “Our estimated ending fund balance is … 7.3%,” Perringer said, adding that the district’s policy requires a 5% minimum reserve.

The nut graf: The district faces a structural gap because projected expenditures are rising faster than revenues and because substantial parts of district costs—special education, MSOC (materials, supplies, operating costs), and employee compensation—remain underfunded by the state. Finance staff said the community’s EP&O levy covers much of that state shortfall now, but levy proceeds are time‑limited and cannot fill an expanding multi‑year deficit.

Most important facts: staff showed that state funding grows by an estimated 5.1% while district expenditures rise about 6% in 2025‑26; special education enrollment is projected to grow about 12.6%; salaries and benefits are about 80% of the district’s budget; and the district currently estimates a 7.3% ending fund balance for 2025‑26 after using current reserves to cover underfunded state obligations.

Staff and board members discussed revenue risks tied to federal programs and to the Community Eligibility Provision (CEP) that pays for meals. Perringer said the president’s federal budget proposal would keep Title I whole but would fold Title II, III, IV and other smaller grants and may cut them by roughly 70% in that proposal, estimating that Kent could lose about $3.5 million if the proposed consolidation were enacted; he added that the broader uncertainty tied to federal proposals and pending investigations (described in the presentation) could produce larger reductions.

Perringer described the district’s longer forecast: absent further action, the projected deficits grow to roughly $16.2 million in 2026‑27 and to $21.4 million in 2028‑29, and the ending fund balance would fall below policy to a negative figure by 2028‑29. To achieve the board policy 5% reserve in future years, Perringer said the district would need roughly $7.5 million of recurring budget balancing each year beginning in 2026‑27; he noted that if one subtracts newly added items (for example $2.3 million for deferred maintenance), the required reductions would be smaller but still substantial.

Board action and next steps: the Board held a public hearing on the 2025‑26 budget at this meeting (the hearing was opened and closed at the meeting; there were no public hearing comments). Perringer said staff will present a final budget for adoption on June 25; he cautioned numbers may be adjusted slightly as the state and federal details firm up.

Context and caveats: staff emphasized that many line items are estimates and that actual year‑end numbers for 2024‑25 could change the opening balance for 2025‑26. Perringer also said three bargaining units remain in negotiation; outcomes there could materially affect future forecasts. The presentation repeatedly distinguished discussion/forecasting from formal adoption; the Board did not adopt the budget at the June 11 meeting.

Ending: Perringer and board members agreed to continue budget work sessions and to return June 25 for formal adoption, with staff committing to incorporate new state or federal details as they arrive.