Bigger BISD deficit means staff reductions

The Bainbridge Island School District announced Jan. 22 that it must cut its already hamstrung budget by up to $7 million for the 2025-26 school year, the largest deficit the district has faced since its budget troubles were first revealed October 2023.

This means the district must make staff reductions that will impact the student day, changes which it initially aimed to avoid. An official list of reduced positions will be completed by the April 24 school board meeting.

BISD is “in the midst of a perfect storm,” superintendent Amii Thompson wrote in the announcement Jan. 22. At the district level, years of deficit spending, several fiscal errors and a few years of low oversight overextended the budget while declines in enrollment slowly reduced state income.

The district could lose anywhere between 55-120 students in the next year, which could mean a loss of up to $1.4 million in revenue from state apportionment, per the most recent demographer’s report. After consulting with the District Budget Advisory Committee and the Puget Sound Educational Service District, BISD has decided to plan for 85 fewer students.

“While this enrollment projection is very conservative, we have very little room for error,” Thompson said. “If we miss the mark and end up with fewer students than projected, we would end up in a negative budget position for the 2025-26 school year and be in binding conditions.”

When a school district ends the fiscal year with a negative fund balance, it goes into binding conditions, in which a financial officer from the regional educational service district — in this case, PSESD — steps in as a consultant for the district to get its budget back on track.

The conditions are literal financial goals that can be summarized in a sentence or two, such as “by (Nov.) 30, the district’s general fund balance must be greater than $5 million.” If a district cannot meet its goals within three years and cannot prepare a satisfactory financial plan, it is considered financially insolvent, and the state Office of the Superintendent takes over.

But on top of the looming deficit, BISD has been facing more immediate problems.

In October, financial director Kim Knight discovered that the district’s fund balance, essentially a savings account, will end the 2024-25 school year with negative $35,400 due to untracked expenditures in previous years. Thompson and Knight certified a spending freeze and authorized three loans from the district’s capital fund to make payroll during the school year, but warned that staff reductions may be necessary to financially recover.

“The good news is that our mid-year corrections are working and we currently spend an average of 3% less per month. We hope to pay the loan back, or a large percentage of it, by the end of this fiscal year,” Thompson said.

Thompson, a former second-grade teacher and once a member of the certificated staffing union, has been vocal about avoiding staff reductions that impact the student day — meaning teachers, school nurses, counselors and more. The district hopes to spread reductions across employee groups, school levels, programs and departments in order to minimize the impact on students.

“It is possible to make reductions in that amount without drastically changing the school day for our students, but that is not to say that it won’t be incredibly difficult,” she said. “One of the most important things that we can do is to take a step back and think about what we offer our students each day, and if there is a different framework or model that we may have not considered.”

With time and effort, revenue may be on the horizon. The creation of an all-day preschool, sale of land in the Grand Forest and projected higher enrollment in 2026-27 could improve the district’s financial outlook. But in the meantime, school closures remain off the table, Thompson added.

“Building closure does not save as much money as once was originally thought. It is important to remember that the number one way to reduce spending in a school closure scenario is by reducing the number of staff positions,” Thompson said. “Any potential school closures or reconsolidations considered need very close to the same amount of staffing as they currently have due to the overall number of students.”