Declining enrollment prompts spending cuts
Citing “increasing financial pressure,” Methow Valley School District officials will trim expenses in the upcoming school year, according to a draft budget obtained by the Methow Valley News.
Declining enrollment and rising costs have prompted school officials to propose cutting staff and tapping into cash reserves to balance the 2026–27 budget.
The school board will hold a public hearing on the budget at 5:30 p.m. Thursday (July 30) in the district office. Board members are expected to approve the budget at the same meeting.
The proposed budget holds few surprises. Superintendent Grant Storey reported an anticipated $460,000 shortfall for the upcoming school year back in April. He said at the time the district was likely to reduce staff size and dip into its ending fund balance to help close that gap.
The draft budget calls for eliminating the equivalent of 2.8 full-time staff positions and spending $130,000 of the district’s fund balance to make ends meet on the $18.13 million general fund budget. The board is also considering reduced outlays for professional training and other discretionary spending, and “organizational adjustments and operational efficiencies,” according to a July 13 budget memo Storey wrote to school board members.
Storey has said the district is avoiding layoffs of school employees.
Staff cuts will be “achieved primarily through attrition and vacancy management,” the memo said, meaning that some staff who are leaving will not be replaced, or those positions will be filled by part-timers. For example, departing Liberty Bell Junior/Senior High School music teacher Eva Aneshansley will be replaced by a teacher guaranteed only 70% of full-time hours.
A separate budget memo said the district anticipates spending nearly $2.7 million on materials, supplies and operating costs, accounting for a majority of the district’s general fund expenses outside of payroll. But the state is covering less than half of that — just $1.1 million.
“Methow Valley continues to face increasing financial pressure,” Storey said in his memo, citing “declining enrollment, rising operating costs, changing funding sources and uncertainty surrounding future grant funding.”
“These challenges are not unique to our district, nor are they the result of poor fiscal management,” the memo continued. “Rather, they reflect broader changes in the financial landscape facing public education and reinforce the importance of long-term planning.”
Downward trend
The long-term outlook for the school budget isn’t good. Enrollment, which ticked up during the COVID-19 pandemic, has begun to trend downward, and school district budget writers don’t see that changing over the next four years.
The district is budgeting for 737 students in K-12 in the upcoming school year, down from 747 at the end of 2025–26. That number is expected to drop below 700 by 2029–30. State funding for schools is largely based on student enrollment.
The draft budget projects a 2.6% increase in state funding over the next four years, despite an enrollment decline of more than 5%. Even so, the four-year budget outlook anticipates that the district will continue to draw down its cash reserves, from $1.57 million in 2026–27 to $942,000 in 2029–30.
But a lot can change in four years. Enrollment could rebound, and state lawmakers could decide to provide more funding for public education.
State Superintendent of Public Instruction Chris Reykdal has been vocal on the issue of school funding, saying in his January “State of Education” speech that he would like to see a “good billion dollars or more” funneled to schools, on top of the $27.7 billion the state spends annually on K-12 and higher education. He called for “a massive overhaul of the tax code” to provide the needed revenue, according to a KUOW report.
State Sen. Shelly Short doesn’t support new taxes, but the Republican did have some ideas for easing the cost burden on schools at a candidate forum in Twisp earlier this month.
Short indicated she would support “liability reform” to reduce insurance fees for public schools.
“Their insurance costs have just been astronomical,” Short said at the forum. “The money doesn’t go as far as it needs to.”
Insurance rates at Methow Valley schools went up 48% in 2024–25 and another 12% this past school year. Insurance costs will go up again in 2026–27, but not beyond 10%, Storey said in April.
Regarding federal funding, school districts could see significant cuts in the coming years, Storey said in April. This is not reflected in the district’s four-year outlook, however. The budget projects 2.5% growth in federal funding in each of the next three years after 2026–27. For the upcoming school year, federal funding accounts for just 3% of the total budget.
Most of the district’s funding (58.7%) comes from the state. Another 32.8% comes from local taxes and other local sources. The small remainder comes from “other entities” and “other financing sources.”
Investing in students
Despite the district’s budget challenges, Storey’s memo highlights certain investments school officials are committed to, including competitive pay for staff; expansion of the district’s dual credit, and career and technical education programs; safety improvements in the schools, to be paid from a separate capital projects fund; and small class sizes at Methow Valley Elementary School.
The smaller elementary school classes are happening with little help needed from school officials, due to a recent trend of smaller kindergarten cohorts. The school budget anticipates 279 students in grades K–5 this year, down from 311 at the end of 2025–26.
While much of the focus among school leaders has been on the $18.13 general fund budget — which covers everything from teachers’ salaries and liability insurance, to cleaning supplies and utility bills — the board will be asked to approve five separate budgets Thursday.
In addition to the general fund, the draft budget includes a $9.08 million capital projects fund, mostly for building improvements. Of that amount, $7.2 million comes from the state, with local taxes covering $1.65 million.
The other funds are for transportation ($370,000), debt service ($307,500) and the Associated Student Body ($362,000).
