Across Washington State and the nation, school districts are grappling with rising costs, declining enrollment, and reduced funding. Some of the key factors include:

• Rising costs, inflation and cost-of-living increases.

• Higher operational costs, such as workers’ compensation and paid family medical leave; higher utilities, and gas prices.

• Declining birth rates leading to lower student enrollment.

• A reduction in the state’s share of funding for K–12 education—from over 50% in 2019–21 to 43.2% in the 2025–27 state budget.

We're committed to sharing accurate information with empathy and care. Talking about money isn't comfortable for most people. Our community deserves to know what goes into our budget and what the money is spent on. You can expect that we are:

• Sharing accurate, timely information with staff and the community.

• Making student-centered decisions that preserve educational quality as much as possible.

• Listening to feedback from schools, departments, and employee groups.

Immediate steps included:

• Reducing central office and building spending

• Pausing hiring vacant positions

• Reviewing all departments and programs for efficiency

• Recalibrating budgets to reflect enrollment changes and other financial impacts

Long-term, the district must plan reductions over the next several years to maintain a minimum fund balance required by our school board policy.

We will provide regular updates through school board meetings and district communications such as our website and e-Newsletters. 

The fund balance is the money that a school district has left over at the end of the fiscal year. The Tahoma School District's fiscal year runs September 1 through August 31. We use this money like an emergency savings account. This allows us the flexibility when unexpected things come up, like repairing parking lot lighting after the copper wires were cut out or unplanned roof repairs.  

Our current school board policy requires that we keep our fund balance between 10-12%. 

Our budget is made up of state (77.2%), federal (1.8%)  and local (21% including levies, grants or other local sources) funding. 

The district has maintained its Aa2 Moody’s credit rating, which represents fixed securities, like bonds, that are of a high quality and very low credit risk. This is the third highest credit rating assigned by Moody’s to fixed securities, and the highest possible credit rating for a district of our size. Our recent bond sale was also backed by the Washington State School Bond Guarantee with a “Aaa” rating, which is the strongest bond rating possible, and is also partially determined by our historical clean audit reports. The rating reflects strong financial practices, long term stability, and consistent progress over several years.

Additionally, Tahoma was recently awarded the Washington State Auditor's Stewardship Award. This award recognizes local governments and districts exceptional dedication to financial excellence and the responsible stewardship of public funds. Since its inception in 2015, the SASA has only been awarded to 15 of the 295 school districts in Washington State. Read more about it here. 

Our community voted to pass our replacement EP&O and Tech levies in February 2026 at the same collection rate as the previous levies. We will begin collecting those levies in 2027, which means any levy-supported programs or services right now are from the remaining expiring levy from 2024. 

Due to unpaid property taxes, we've already seen delays in our full levy collection. It is uncertain if we will see those dollars in the future. An example of this impact from this school year is our most recent levy collection in late April was lower than expected and we have had to make reductions to levy-supported activities this spring, including Kindergarten Camp, to absorb the loss of revenue. We anticipate lower collection rates next school year as well.

We understand that seeing levy-supported programs get impacted is difficult. This is a new challenge for Tahoma. Pair this with the flat collection rate and rising inflation making everything more expensive to run, and we are looking at fewer dollars for some of the programs historically supported by our local levies.

We've been operating with class sizes well below the state funding range.  Part of the adjustments being made will bring those class sizes closer to the state funding range. 

The district encourages families to:

• Contact state legislators about the need for adequate school funding

• Advocate for improved funding for special education, transportation, and operations

These programs are not being eliminated. However, efficiency adjustments to staffing are occurring across all departments, and program consolidations may be necessary.

The district is committed to transparency and ongoing communication. Updates will be published on our website and shared in our weekly family newsletter to ensure ongoing access and transparency.

Staff and community members may send questions to tsdmessages@tahomasd.us, attend budget meetings, and watch recorded presentations online.

We recognize these challenges impact people, not just budgets. Because many of our staff have worked in Tahoma for many years, this is also something most of our staff have not been through before, and we understand the anxiety and fear challenges like this can create. 

To address these challenges responsibly, we are focusing on aligning our staffing levels with our current student population. As the student population decreases, our funding for staff does as well. We are currently reviewing student-to-staff ratios for both our certificated and classified positions. One of the ways to rebalance our staffing is by utilizing natural attrition (retirements and resignations). We are also decreasing costs in purchases of materials, and other operating costs, to absorb some of the needed budget reductions due to a decline in enrollment and decreased state funding for 2026-27 school year.

The district is working to avoid a formal Reduction in Force (RIF). Because approximately 83% of the district’s budget is personnel, staffing adjustments are likely.  Going into next school year, we will rebalance staffing to our funding model through natural attrition. This means reviewing all vacancies carefully before backfilling those roles.

Our demographer's projections have been off the last couple of years. While we used to be able to depend on the medium projections, this last year we chose to use the low-medium projection and it was still too high. For the 2025-26 school year, we had approximately 100 fewer students and we're anticipating about 250 fewer students next school year. With graduating classes of 700+ and incoming Kindergarten classes under 500, our enrollment is anticipated to continue to decline. 

For the past 30 years, our district has experienced consistent growth. Prior to this school year, enrollment has only declined twice in almost three decades, once in 2011 and again in 2020, with student numbers rebounding immediately the following school year. However, we experienced a decrease in enrollment for the 2025–26 school year, and projections indicate another decline for the upcoming 2026–27 school year. This marks the first time in our district's recent history that we have faced consecutive years of lower enrollment.

State funding is directly tied to student enrollment. When enrollment declines, revenue decreases immediately, while staffing and operational costs cannot always be reduced at the same pace. This creates structural budget pressure that we must address to remain financially stable.

Adjustments to spending are happening across the district. Every building and department have made adjustments to their budgets and staffing.

When 83% of our operating costs are tied to staff salaries and benefits, it is necessary to reduce costs in these areas. To do this, we are focusing heavily on attrition (not filling positions opened by retirements or resignations) and reassignment in alignment with our labor agreements. 

Adjustments for the 2026-27 school year include reduced positions, reduced extra hours, and lower than inflationary increases for non union represented employees, which reduces our operating costs by $9.47M.

Specific adjustments made to the district office include, loss of professional development funds for directors/executive directors, moving staff back into the classroom or to fill other open roles within the district and reduced FTE (including not backfilling some vacancies). 

Looking ahead, the district faces:

• Continued enrollment decline (graduating classes of 700+ being replaced by incoming Kindergarten classes of ~500)

• Higher operational costs, such insurance, salaries/benefits, higher food, utilities, and gas prices

• Continued loss of state and federal funding anticipated

• Continued delays of local levy collections

Without additional funding or reductions, the district would not be able to maintain required fund balance levels.

The Educational Programs & Operations (EP&O) levy provides approximately $33 million annually to support district programming and operations. Historically we have received 99% of our levy dollars, but this school year it’s closer to 97%.

While 3% doesn't seem like a big percentage, this means approximately $990,000 is not available for our students and operations and unfortunately, our general fund cannot absorb these lost levy dollar for the programs and services supported by the levy.  We anticipate continued delays in our full levy collection based on what we've received this school year.