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School district grapples with unexpected shortfall in state funds

Due to the state's budget crisis, the Vashon Island School District expects to lose between $103,000 and $151,000 in state funding this year — an unexpected mid-year reduction that has thrown a wrench into the school district's budget.

Gov. Chris Gregoire, facing an additional $1.1 billion shortfall for the current fiscal year, proposed a supplemental budget to the Legislature in December that would, among other things, eliminate extra money the state currently provides school districts to reduce class sizes for students in grades kindergarten through fourth.

Initially, she proposed that the budget cuts go into effect Feb. 1, which would result in a $103,224 reduction in state funding for the Vashon school district this year.

She has since asked the Legislature to make those cuts retroactive — meaning districts would lose those funds dating back to Aug.1. If the Legislature approves her request to make the cuts retroactive, Vashon would lose $151,023 this year, Michael Soltman, the district's superintendent, told the school board Thursday night.

Because the district has 23 more students than it had budgeted for, Soltman said, he could take the state funding it receives for those kids — more than $104,000 — and use that to cover the state's reduction in funds. He also suggested what he called "a selective spending freeze" in non-essential materials.

But Soltman said he's troubled by the predicament the governor's budget proposal puts the district in. He had hoped to put those funds from additional enrollment into the district's rainy day fund — a pool of money that's needed, he said, to keep the district in financial solvency.

"It's serious because school districts are living on the edge of default," he said. "The only safety net we have is our unreserved fund balance."

The district currently has a fund balance of $187,023, up from as low as $13,000 or so a few years ago. But Soltman, who has made replenishment of the fund balance a top fiscal priority since his arrival a year and a half ago, said those reserves should total 5 percent of the district's annual operating budget, or around $700,000.

"Our financial security is at risk," he said.

Should the district end up facing a loss of $151,000 in state funds, the situation will be more dire, said Laura Wishik, who chairs the board.

Soltman has also suggested turning to the newly created Vashon Public Schools Foundation to help it through this crisis or implementing additional cuts, such as furloughs of non-certificated staff — administrators, maintenance staff and para-educators.

Wishik said she thinks Soltman's proposal for how to deal with the state shortfall makes sense.

"The anxiety in the pit of my stomach is that it's going to end up being a bigger number and we'll have less time to deal with it," she said.

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