Mercer Island School District projects $3 million shortfall, urges state funding and local action

Superintendent (name not specified) warned Mercer Island School District residents that the district projects roughly a $3 million shortfall for the 2025–26 school year and said the district has “run out of tricks” to cover rising costs without new revenue.

The district’s short-term finances remain solvent for this school year, Superintendent (name not specified) told the live webinar audience, but he said “if we receive no new revenue at all ... as we head into 25, 26 … we project it will be about $3,000,000 short.” The district said enrollment—3,900 students so far this school year—remains the primary driver of state funding because state payments follow student full‑time‑equivalent (FTE) counts.

The message: why it matters

The shortfall stems from a mix of structural and local factors that district leaders said the state must address: limits on local levy collections, underfunding of special education, steep increases in insurance and operating costs, and growing transportation expenses. The superintendent framed the shortfall as partly the result of changes since the McCleary litigation and a state cap on local Educational Programs and Operations (EP&O) levies that the district says is limiting local revenue.

What the district told families and supporters

At the start of the presentation the superintendent summarized the district’s approach: use conservative enrollment projections, limit discretionary spending, and avoid deficit spending. Matt Sullivan, executive director, explained funding mechanics: “FTE stands for full time equivalent ... we’re funded via the state of Washington, OSPI, the Office of the Superintendent of Public Instruction via our student FTE.”

Levers already used and emerging gaps

District leaders said they have already tightened spending, used one‑time funds and interfund transfers in past years, and repaid prior temporary loans. They said the district has not engaged in deficit spending over the last two years. Still, several cost increases and policy limits are creating pressure:

- The district projects about a $3 million shortfall for 2025–26 if no new revenue arrives. - Enrollment this school year is about 3,900 students; the prior year peaked at 3,881. - Personnel accounts for about 83 percent of general fund expenditures; certified salaries were cited at about 44.5 percent of that fund. - District insurance costs rose about 137 percent over four years, from roughly $478,000 to about $1.1 million annually. - Transportation is running a larger gap than in prior years; leaders said the district was about $300,000 short several years ago and now projects roughly $1,000,000 short. The district noted buses travel about 1,100 miles each weekday on the island’s roughly 17‑mile circumference and that the state funds roughly two‑thirds of transportation costs. - The district said the state‑imposed cap on EP&O levies constrains local revenue; leaders quantified a recent contrast of about $17.8 million (estimated at an escalated pre‑cap level) versus a permitted $12 million in 2023–24, a difference district leaders described as nearly $6 million for that year.

Potential responses discussed

Superintendent (name not specified) and staff outlined a mix of options the district is preparing to use or recommend:

- Enrollment and outreach: increase recruitment and retention (choice transfer/open enrollment changes are under consideration) and events such as “Future Islander Night” and outreach to families and recent graduates. - Fees and booster support: modest increases in student fees and coordination with PTAs, boosters and the district foundation; leaders stressed they do not intend to “put it all on the backs of our families.” - Staffing adjustments: further reductions in FTE and administrative positions remain possible to align staffing with enrollment; the superintendent said some administrator positions were not backfilled this year and that additional painful staffing decisions are being planned for the spring. - Legislative advocacy: district leaders and PTA advocates are pressing the Legislature for increased funding in special education, transportation and materials/operating costs, and for changes to levy caps. The superintendent said district advocates will be active at the upcoming legislative session.

PTA advocacy and community actions

Mara Breton, legislative advocate for the Mercer Island PTA Council, urged parents to sign a letter to state legislators and to enroll in Washington State PTA action alerts. “We would love to have you,” Breton said, describing plans to deliver signatures to legislators and the governor and to organize parents for meetings and calls during the legislative session.

Questions from attendees and district clarifications

During Q&A, district staff answered community questions about administrative staffing, part‑time enrollment, legal options and program choices:

- Administrative staffing: the superintendent said the high school is operating with one fewer administrator and the district has not refilled several associate principal roles; some temporary administrator assignments are intended to bridge the current year and not be replaced next year. - Part‑time enrollment and private‑school course taking: officials said state funding is tied to FTE; if a student takes fewer than six class periods in the district the district may lose funding for that student, but if a student takes one class elsewhere while remaining a six‑period student the district typically receives full funding. - Legal recourse: participants referenced the McCleary court case (State Supreme Court litigation over school funding) and asked about new lawsuits; district leaders said rumors exist but no firm legal action was reported and that advocates are awaiting legislative outcomes this biennium. - Program and technology spending: the superintendent defended the Yondr pouch program (phone pouches purchased from the capital technology levy) as intended to reduce classroom distractions and support learning despite the expense.

What the district asked of the community

Leaders urged parents and residents to contact state legislators, sign PTA letters and participate at the precinct and ballot level if levy limits change. The superintendent and PTA advocacy lead framed legislative change as the most durable remedy, while noting local measures (levy renewal or increase if allowed and approved by voters) would also be necessary if the Legislature alters or lifts levy caps.

Ending and next steps

The district said it will return to the board with specific recommendations, continue staffing reviews and present a proposal on open enrollment next week. The district also plans additional community outreach events and said the recorded webinar will be posted online.