Kennewick School District finance staff told the Board of Directors that legislative changes and updated revenue estimates have reduced the district’s preliminary 2025–26 budget shortfall to about $640,000.

Why it matters: The shift narrows a previously projected multi-million-dollar deficit and affects the district’s planning ahead of a levy and the June budget adoption. Key drivers include state increases in special-education allocations and an IPD (inflationary) rate set at 2.5%, offset by higher employer-paid health insurance costs.

District staff presented a point-by-point summary of revenue and expenditure changes. Notable items included a state increase in MSOC (materials, supplies and operating costs) funding of about $81 per student; a rise in special-education tier funding (Tier 1 up ~4%, Tier 2 up ~9%); an anticipated IPD inflator of 2.5%; and an insurance premium increase of about 11% (health-insurance contribution rising from roughly $14,136 to $15,006 per covered employee). Staff also said the state retirement contribution rate declined, producing modest savings.

On net, staff reported roughly $5.54 million of preliminary revenue increases relative to the April estimate (driven partly by LEA/AV recalculations and special-ed increases), while expenditures increased in areas such as medical insurance. Transportation funding and CTE-related revenues were expected to increase modestly, and projected enrollment shifts could reduce basic-ed funding by an estimated $6.6 million if current trends hold. Staff emphasized that kindergarten projections are the least certain element in enrollment forecasting.

District staff said the prior projection in spring had shown a roughly $5.5 million gap; the updated numbers reflect legislative action, updated OSPI calculations, and refined local projections. The finance presentation noted the district is still finalizing figures and will return to the board for final adoption on June 18.

Ending: The board did not vote on budget adoption at the meeting. Staff will continue to refine figures and present a final budget for public notice and adoption at the June 18 hearing.