Highline Schools Budget for 2023-24 Released: A First Assessment

Highline Schools Budget for 2023-24 Released: A First Assessment

The Highline School District budget for 2023-24 is released in time for the June 7 public comment, board workshop and board meeting.

The budget book has a lot of numbers. There are some that do not make sense, including enrollment numbers for the current and past school years. There is a chance a figure was put in the wrong column. What are the implications of this possible mistake? It is hard to know because many of the numbers in the budget do not have much if any context.  I am writing this draft assuming that all of the numbers are correct, but that is a big assumption. I want people to be able to read this and look at the budget themselves before the board hearing.

Here are some highlights from the draft 2023-24 budget:

• Operations budget is $391.6 million.
• The AAFTE enrollment (average annual full-time enrollment) is listed as 17,415
• That works out to $22,489 per student.
• The amount in reserves is nearly $42 million, somewhat higher than in previous year
• The Capital projects fund spending is listed as $234 million. Evergreen and Tyee rebuilds account for $203.6 million of the $234.

After reading through the budget, there are many areas to investigate.

The federal government has provided over $80 million total for Covid relief (ESSER) over the past few years through next year. Most is already spent. It appears in the 2023-24 school year, ESSER relief funding will total $11.8 million. Covid spending per student appears to be $677.

• How will the funds be spent? How has it been used?

Other issues to investigate:

• Enrollment forecasts: is the district growing or shrinking?
• Enrollment numbers: are they accurate? ALE appears placed in the wrong year. Comparing to the state data is hard, I think they may use headcount, where the budget book uses average annual full time enrollment, which can include some part time students.
• Is the amount home owners of median properties pay per year increasing or dropping?
• Where does the levy money go?

Let’s look at three issues in detail.

Enrollment

The state funds per student. If/when enrollment goes up or down, so does state funding.

In prior budget books, there have been tables showing forecasted enrollment beyond the current year, and forecasted fund balances for future years. Neither is present in the 2023-24 budget.  Here’s the data that’s listed for enrollment in the 2023-24 school year, plus columns showing the changes over the past two years:

*These numbers are calculated for this story, they are not a part of the budget briefing book.

The district staff told me ALE is Highline Virtual Academy enrollment. But, HVA started in the 2021-22 school year, and according to OSPI data for Highline Virtual Academy, the enrollment that year was 589. The enrollment in 2022-23 (current year) is listed as 367.

So are these numbers correct? I checked on June 6 but did not hear back before it was time to post this story so people can read it before the board workshop.If, a big IF, the numbers are correct, then Highline is dodging many of the major enrollment drops and budget cuts that are impacting school districts in the state. A change of just 40 students is not significant.

But the numbers make me wonder how we got through this year. Comparing 23-24  to 21-22, we have a major negative change. A drop of 445.9 at the middle school level is half or more of the enrollment at each of the five middle schools. A drop of 238 at the K5 level is equal to half the size of several district elementary schools.

The overall total drop though is 330, not 581. This is largely due to a significant increase in ALE (Highline Virtual Academy) students.

Reserves, and Sources of Revenue for the Operations Budget

Of the $391.6 million operations budget:

• The state provides $268 million
• Local levy is $55 million
• Federal support is $41 million. Nearly $12 million of this is for Covid relief
• Other revenue comes from many different sources and totals $25.8 million. This can include drawing down reserves

At the budget work study session in June 2022, one of the board members said ‘we’re heading for dwindling reserves.’ I looked at the budget development slide deck presented to the board in a work study session of February 1, 2023, and saw there are two scenarios for the next several years: one where the state kicks in a lot more money and then the reserves don’t dwindle, or one where present trends continue and the reserves drop a lot.

The budget book does not address what the longer-term situation is for reserves.

The book also does not mention how state funding is increased for special ed, which historically is where a major part of the local levy money has gone. When state money for SPED increases, does that mean local levy spending can decrease on SPED?

Levy Amount and Levy Use

In the 2021-22 school year, Highline collected $48.8 million in local property tax levy.

The forecast for the 2023-24 school year is $55.6 million. This is an increase of nearly $7 million, even though enrollment dropped by 581 or 330, depending on whether you look at the subtotal or the Total.

See page 42 (out of 71) for information on the levy. A part of this text appears to be cut/paste from previous years. Here are two sentences (with some words put in bold) that seem they should be past tense for the 23-24 budget:  “Operating levy revenue is anticipated to increase by $500,000 in 2022-23. In calendar year 2022, districts are allowed to use enrollment from school year 2019-20 rather than 2020-21 as the basis for the calculation.”

The budget lists the amount per thousand, but does not list the median price of a home in the district. So one can’t tell what the total amounts are for median home owners. On page 32, there is a discussion of a house valued at $450K, and how the taxes on a $450K home would have dropped from $2421 in 2018 to $2030 in the 2021 tax year. But does anyone know anyone whose house value did not greatly increase from 2018 to 2021? Then the table uses the same $450K for the next few years as well. This is not realistic, and creates a very misleading picture of what taxpayers are really paying.

And even worse: page 33 (property tax overview) and page 42 (budget)  use different values for the levy rates per thousand!

2022 property tax rate for enrichment levy is listed as $2.03.  2022 budget is listed as $2.06.

2023 property tax rate for enrichment levy is listed as $1.93.   2023 budget is listed as $2.27.

2024 property tax rate for enrichment levy is listed as $1.88.   2023 2024 budget is listed as $2.05.

Closing Editorial Comment

This is a first analysis, written on deadline. There’s a lot that seems contradictory. I just hope Highline is not heading for a major budget blowup. But not having any discussion in public for over four months, just 48 hours between budget release and public comment meeting, and very little historical context for most numbers or outline of how the numbers are calculated sets up a situation where a LOT can go wrong.