Tacoma Public Schools ends 2024–25 with slim reserves after revenue shortfalls, district finance official says
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Summary
District finance presenter Ross told the board the district closed 2024–25 with a $3.2 million general-fund balance, well below the ~5% reserve target (about $28 million), citing a roughly $3 million midyear transportation revenue loss and other pressures; the district will use short-term mitigation and multi-year recovery plans.
Ross, the district finance presenter, told the Tacoma School District Board the 2024–25 fiscal year ended with an operating fund balance of $3.2 million, far short of a 5% reserve target he estimated at about $28 million. "We budgeted for a beginning fund balance of 17.5 million, and we actually came in last year at 11.1 million," Ross said, adding that revenues for the year were $571.6 million, roughly $6.2 million under what had been planned.
The finance presentation singled out an unanticipated transportation funding hit of about $3 million that occurred during the year, which Ross said carried through to the end of the fiscal period. "One of those would be the transportation funding; we didn't know that we would have about a $3,000,000 impact on our transportation revenues during the middle of the year," Ross said.
Why it matters: A smaller-than-planned reserve reduces the district's flexibility to respond to emergencies and increases reliance on short-term mitigation measures, Ross told the board. He said the district had planned incremental rebuilding of reserves across multiple years and that levy timing would affect when additional resources become available. "We planned in the 25–26 budget for about a 1% impact, and we said 1% per year," he said.
Board members pressed for clarity on the time frame for rebuilding reserves and the sources of pressure. One director flagged a state sales‑tax change that added tax to contracted services for students with disabilities, calling it a multi‑million dollar hit the district did not budget for. Ross responded that while the district ended the year in positive territory, the balance was far below policy targets and that staff would continue forecasting and pursuing mitigation options, including temporary interfund borrowing if necessary.
District next steps and context: Ross said staff will finish closing the first month of 2025–26, begin forecasting, and determine additional mitigation steps. He also noted the district expects some levy-related revenue to arrive in later budget years that could help restore reserves. The board set a monthly financial update for Dec. 11 and directed staff to provide further details in upcoming meetings.
Provenance: Presentation and Q&A given during the financial report (2024–25 year-end), as presented by Ross.