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Kent School District projects multi‑year deficits, flags special‑education shortfall
Summary
District finance staff told the school board a flat post‑pandemic enrollment and rising staffing costs leave a projected $6.7 million deficit for 2025‑26 that grows in later years, driven largely by special education and unsustained federal grants.
The Kent School District’s finance team told the board on Wednesday that the district faces a growing structural deficit driven by flat enrollment, rising staff costs and the end of federal ESSER funding.
Raul Parenko, the district’s executive director of finance, presented a forecast showing a $6.7 million gap for 2025‑26 that expands in subsequent years if no changes are made. “Our enrollment has declined by about 8.7% or about 2,308 students over the last 10 years,” Parenko said, and he emphasized enrollment drives the largest share of state funding.
Why it matters: state general‑purpose dollars are roughly 55% of the district’s general fund revenue and are enrollment‑driven, Parenko said. That leaves Kent exposed when enrollment lags or when categorical and federal funds fluctuate. The district closed 2023‑24 with a larger unassigned ending fund balance than anticipated because of levy results, but staff warned reserves fall below the board’s 5% policy in the multi‑year forecast unless the district adopts balancing actions.
The budget presentation laid out revenue and spending details for the current year (2024‑25): about $528 million in general‑fund revenue and $538 million in expenditures, with salaries and benefits making up about 81% of spending. Parenko told the board that special education currently shows a roughly $24 million budget deficit and multilingual education about $7 million; those program shortfalls are a major driver of the forecasted structural gap.
Board members asked staff about levers to address the shortfall. Parenko outlined a three‑step strategy presented previously: pursue efficiency savings, seek revenue increases, and use expenditure reductions as a last resort. He said staff have modeling tools to test class‑size changes and staffing scenarios when the board asked about potential class‑size reductions.
The board discussed whether to raise the district’s minimum unassigned fund balance above its current 5% policy. Parenko said a 5% reserve covers roughly two and a half weeks of operating costs and cited auditor guidance that 10% (about $52 million in Kent’s case) would cover about a month and provide a stronger cushion for unexpected costs. Board members heard the auditor’s recommendation but acknowledged raising reserves would require tradeoffs.
Next steps: staff will return with updated numbers after the close of the state legislative session (the last day of session was listed as April 27) and provide a budget update May 14. The board will hold a June 11 work session and regular meeting with a public hearing before formal budget adoption planned June 25.
Ending: Finance staff urged the board to view the presentation as the beginning of a multi‑meeting discussion and asked trustees to weigh priorities before the district’s June adoption timeline.
