Dear RSD Families and Community,

We understand that recent financial challenges have raised concerns with our staff, families and the community. Like many districts across the state, Richland School District is navigating significant budgetary pressures caused by a combination of unplanned expenses, rising operational costs, and systemic funding gaps. Read more about the funding issues impacting school districts in Washington.

This situation has drawn our ending fund balance to critically low levels, requiring immediate and impactful budget adjustments. We are committed to transparency as we address these challenges and implement necessary budget adjustments to ensure a sustainable financial future for Richland School District.

The finances of all Washington State school districts are closely monitored, with oversight from the State Auditor's Office to ensure compliance. Audit and budget reports are available to download on the district’s website.

Why is the District in this Financial Crisis?

Several factors that have compounded our financial situation:

• State Funding Gaps: Washington’s state funding model does not fully cover basic educational costs, leaving districts reliant on levies and other sources to fill the gaps. 
• Enrollment Fluctuations: Enrollment declined during the 2020-21 school year, while staffing numbers remained the same compared to the year prior. This was a decision made to prevent staff layoffs during the pandemic. Enrollment eventually exceeded pre-covid numbers in the 2023-24 school year.
• Substitute Costs: The state funds only four substitute days per teacher annually and provides no funding for classified staff substitutes. In 2023-24, Richland covered $3.68 million in underfunded substitute costs. 
• Regionalization Funds: The district’s allocation from this state program has steadily decreased since 2020. The last year we received regionalization was 2023-24.
• Growing Expenditures: Rising operational costs not adequately covered by the state continue to outpace revenue, leading to budget shortfalls. 

What Actions Have Or Are Being Taken?

Richland School District has already taken significant steps to address the financial challenges: 

• Staff Reductions: A total of 52 full-time equivalent (FTE) positions have been reduced through attrition since August 2023, saving $4.88 million. 
• Cost-Cutting Measures: Adjustments and eliminations to contracts and services have resulted in $1.6 million in savings since 2022-23. 
• Spending Controls: Travel is limited to essential or grant-funded purposes, extra hours (overtime) have reduced significantly, excess supply purchases have been halted, and a confirmation process for all expenditures is in place. 
• Advocacy Efforts: The district is working with local and state officials to advocate for better funding alignment with student needs. 

Looking Ahead: What’s Next?

To meet budget requirements for 2024-25, Richland must reduce spending by approximately $3 million. Long-term, the district aims to achieve a 5% unassigned fund balance (approximately $12 million) for financial stability. 

Planned Reductions:

1. 2024-25: Balance the current budget with a reduction of approximately $3 million, including roughly $2 million in staffing reductions and $1 million in non-staff cuts. Examples of these savings are listed below:
   1. Superintendent will donate five days’ pay to the district
   2. The Superintendent’s cabinet will donate three days’ pay to the district
   3. Other district office including building administrators will donate one days’ pay.
   4. Suspending all transportation to high school sporting events within the cities of Richland, Kennewick, Pasco beginning December 1, 2024
   5. Continue to eliminate positions through attrition as staff resign or retire
   6. Where possible, fill classes up to negotiated sizes by focusing on grades 6-12 for second semester
   7. Offer separation incentive to general education paraeducators
   8. Reassign paraeducators to special education positions currently being filled by substitutes
   9. Reducing facilities and operation costs by an additional $1.1 million
2. 2025-26 and Beyond: Continue to balance the budget and grow fund balance until it reaches 5%, which is approximately $12 million. 
   1. The School Board will work alongside district administration and community partners through the budget process to identify strategies that will continue to make progress towards reaching a $12 million fund balance.
   2. Additional actions to be determined by the outcome of the EP&O and Technology Levies in February 2026.
   3. The district's budget is influenced by legislative funding decisions, inflation, enrollment trends, and the success of local levies. These factors could impact reductions in the coming years.

Ongoing Communication:

The district is committed to keeping the community informed. In the coming weeks a new Budget Information page will be added to our website with a detailed look at the district’s financial situation. As updates about our financial situation become available, we will share them with the community as well as post them to the new budget webpage.

This is a challenging time for our district, but with community support and strategic planning, we can create a sustainable future for Richland School District.

Thank you for your continued support.

Dear Richland School District Community,

As most have become aware, state funding for public education is not keeping up with the costs of providing high-quality education in our public schools. Our Superintendent, working alongside the School Board and district staff, has been diligently trying to right-size our budget, without impacting students by making cuts to services or staff.

These funding challenges are not unique to our district. Schools across the state are working to keep costs in line with revenues. Unfortunately, we have reached a point where it is no longer possible for us to continue with our current expenditures, and we must take action to ensure the sustainability of our district.

Considering this, the Board and Superintendent are developing a plan to align expenses with our available resources. We understand the impacts staffing reductions have on a community like ours, so we are pausing the current request to reduce paraeducators while we formalize a comprehensive plan. The district will continue to evaluate in greater detail where these changes can be made, with the least impact on student learning.

The Board has provided the following priorities to guide this process:

• Review Business Contracts and Non-Staff Expenses: Identify efficiencies, eliminate unnecessary contracts, and discuss the renegotiation of current contracts that are essential. These initial cuts can be implemented immediately.
• Evaluate District Staffing: Since approximately 86% of our budget is allocated to staff salaries, we will assess all district positions to determine their necessity and impact on student learning and safety. Reductions, wherever necessary, will focus first on roles with minimal impact to students.
• Utilize Attrition: Whenever possible, we will aim to achieve reductions through retirements or voluntary departures, while filling positions with remaining staff as needed.

Our goal as a Board is to ensure we continue providing the high-quality education our community expects and deserves. We deeply value our employees and aim to avoid layoffs whenever possible.

As comprehensive plans are formed, the district will continue to keep you informed with updates. Thank you for your understanding and support.

-Rick Jansons, Jill Oldson, Bonnie Mitchell, Chelsie Beck and Katrina Waters
Richland School District Board of Directors

Dear RSD Families,

Fall is officially here and with it comes amazing opportunities for enriching educational experiences, exciting extracurricular activities and beloved traditions that foster school and community spirit.

The fall is also a time we closely assess the needs of our district for the rest of the school year. We knew difficult financial times were inevitable, due to inadequate state funding, the loss of one-time federal funding and various economic challenges we have all faced. However, it’s become clear that the financial models and assumptions that worked for us in the past, haven’t been good enough to avoid the hardships that many other districts in Washington state are facing. This is especially true when factoring in the impact of our recent cybersecurity incident.

As the school year progresses, my goal is to maintain transparency with our families regarding the district’s budget and school funding. I will continue to provide factual updates on the district’s financial situation to keep families, staff, and the community fully informed and aware.

What has changed?

The state of Washington is constitutionally responsible for fully funding the costs of basic education but even after reforms (the McCleary Solution), the state’s efforts aren’t keeping up with actual expenses.

Immediately following Legislature’s decision on the McCleary Solution which changed the school funding mechanism in 2018, more than half of Washington's general fund budget was dedicated to K-12 education. Since then, K-12 spending in the state’s general fund budget has continued to grow but K-12 education is no longer the funding priority. Today, the state invests about 43% (compared to 52% in 2019) of the overall general fund budget in K-12 education. This represents a significant shift in the state's financial priorities and impacts the quality of education schools have the money to provide. What lawmakers determined was needed in schools in 2017-18 is different from what is needed today.   

How has this impacted schools?

The largest contributing factors fall into three areas: 

1. Growing Student Support Needs and Declining Designated Funding

• According to a 2021 state auditor’s report, even before the start of the pandemic, Washington students experienced mental health challenges at a higher rate than national averages. The disruption and social isolation of the pandemic only made the problem more intense. Teachers also report that they are seeing more challenging behaviors, especially in younger students.
• School districts used temporary federal relief funding to fill the gap between actual student needs and what the state funds for counselors, school nurses, social workers and psychologists, academic recovery and prevention programs, and more.
• The temporary federal funding ended in the 2023-24 school year. School districts can no longer rely on these funds to offer the academic, social, and behavioral supports our students still require. 
• In lieu of continued state funding, the Richland School District continues to seek out and apply for grants to fill the gap in funding with mental and behavioral health. However, the model of using grants to fund these necessary supports isn’t sustainable or reliable long term.

2. Insufficient Special Education Funding

• Special Education is an important and necessary service for many RSD students, and it is a state and federal requirement. However, the state puts a cap on the percentage of students in a district covered by state and federal special education funding. This cap means that some districts with a high percentage of students who qualify for special education have to use local levy funds–which are supposed to fund enrichment activities–to cover the extra expenses.
• Although the Legislature raised the funding cap to 16% in 2024, that increase amounts to an investment of only $19.6 million for 2024-25. In the 2022-23 school year, statewide special education expenses that were unfunded amounted to $529.8 million. 
  • That amounts to approximately 19% of state special education costs left to be funded by local communities.
• The cost of meeting students individualized needs through assistive technology, specialized services and therapies, etc. is higher than the rate of funding provided by the state. School districts are required by law to meet the individualized needs of students regardless of whether funding is provided or not. Districts across the state ask their communities to fill the gap through local levies. 
  • During the 2023-24 school year, RSD special education relied on more than $2.5 million to be funded by local levies due to lack of funding from the state.

3. Much Higher Operating Costs

• The price of things that schools need to support students has skyrocketed, but the money schools get from the state isn’t even close to keeping up.
  • Everything is more expensive–operational expenses, curriculum, insurance, product licenses, electricity, and so much more.
• Utilities: Similar to how household utility bills have increased, so have these costs for school districts. Since 2018, the average cost of electricity in the Western United States increased by 37%. The price of natural gas for heating increased by 62%. Source: U.S. Bureau of Labor Statistics
• Insurance: Just like a homeowner or a business, local school districts must carry insurance. Since 2020, the cost of insurance for Washington’s school districts has increased by nearly 60% (through 2023-24). Costs continue to increase, but the state only pays for a portion of the total cost. Source: Insurance company invoices from all school districts across the state
  • In 2021-22 school year, RSD paid almost $266,000 out of pocket for insurance and utilities not covered by the state. In the 2023-24 school year, that amount increased to $1.3 million not covered by the state.

What are we doing to help?

Historically, our district has maintained the state recommended 4% fund balance. However, this school year we are operating with a fund balance of about 0.5%. Despite the financial hardships, we’re committed to doing everything we can to make changes furthest from the classroom. Our collective decisions will be guided by our dedication for always placing students first.

Many of the changes to help rectify the funding discrepancy have taken place at the district office, where staffing has been reduced by more than 20% through attrition. Department leads and school principals are evaluating budgets and looking for additional cost saving measures. Staff are also being asked to be cautious with spending and only place orders for current needs, rather than the whole school year. We are streamlining operational costs as much as possible without compromising student support and continuing to seek out alternative funding sources. Our district is also advocating at the state and local levels for funding to match the critical needs of our students.

This will not be an easy journey, but as a district, we have faced challenges before and emerged stronger. We are confident that, by coming together as a community, we will persevere through this period of financial hardship. We appreciate your patience, understanding, and support as we work through these difficulties.

-Dr. Shelley Redinger
Superintendent

Staff attrition refers to the loss of employees through a natural process, such as retirement, resignation, elimination of a position, or other similar reasons. With attrition, an employer will not fill the vacancy left by the former employee.

Levy Equalization, or Local Effort Assistance (LEA), helps districts in areas with lower property values generate adequate funding through state contributions. LEA ensures that districts with less property wealth can still provide essential programs and services.

Historically, the Tri-Cities has had a lower cost of living compared to other areas in Washington State. However, in recent years, property values have risen significantly, leading to a reduction in the amount of LEA provided to the Richland School District by the state. Until February 2026, when the district can ask voters to approve the Educational Programs & Operations (EP&O) levy, the district is unable to capture the full levy rate from new homes being built or from rising property values.

The state assumes an annual increase of 2-3% in home values, which is factored into the allowable amount the district can collect from taxpayers. This adjustment is intended to keep tax rates stable for local residents. However, if home values increase by more than the projected 2-3% annually, the LEA amount the district receives decreases. Once a levy is passed, the allowable amount to be collected is fixed, meaning the district cannot collect additional funds even if home values rise significantly.

Materials, Supplies and Operating Costs (MSOCs) are non-payroll related expenditures such as curriculum, insurance, licenses, and utilities. These costs for schools have risen dramatically, far outpacing the funding provided by the state. For instance, insurance costs for Washington school districts have surged by nearly 60% since 2020, with the state covering only a portion of these expenses. As a result, Richland School District has faced substantial out-of-pocket costs, spending $266,000 on insurance and utilities not covered by the state in the 2021-22 school year—a figure that climbed to $1.3 million by 2023-24. These rising costs have added significant pressure to the district’s already strained budget.

Regionalization is an adjustment in Washington State’s funding model designed to account for cost-of-living differences across districts. It provides percentage-based increases in funding for salaries to help districts attract and retain staff in higher-cost areas.

RSD was given 6% regionalization by the state in 2019-20. Since then, this amount has decreased by approximately one percent each school year. For 2023-24, RSD was only given 1.5%. We will not receive any regionalization funds for 2024-25.

The purpose of regionalization was to help fund salaries, so the yearly allocation was included in salary budgets. However, as the district faced a decline in regionalization funds, salaries were maintained at their original levels to prevent staff from experiencing pay cuts. As a result, a larger portion of salaries is now unfunded by the state.

Certificated Staff: employees who hold a teaching license or other credentials, such as teachers, counselors, nurses, specialists, etc.

Classified Staff: employees who are in support roles that do not require a teaching degree, such as paraeducators, bus drivers, custodians, secretaries, nutrition services, maintenance and operations staff.

Administration Staff: employees can be either certificated or classified and hold positions such as school principals, assistant principals, district directors, assistant directors, coordinators, and the superintendent.

Yes, many school districts across the state are making significant cuts to their staff, programs, and services because funding provided by the state is not enough to cover their basic education expenses. A handful of other school districts are in what is called binding conditions, meaning they cannot balance their budgets. This list of news articles (which is not all-inclusive) shows the vast number of school districts in challenging financial situations.

Yes, as Washington State’s operating budget has increased, the percentage dedicated to funding K-12 education has not kept up. Five years ago (immediately following changes to the way schools are funded by the state), about 52.4% of the state’s general fund budget was dedicated to K-12 education. Now, it’s down to about 43.1%, even though it is the state’s constitutional responsibility to provide adequate funding to support basic education services. Further, Washington ranks well below the national average for investment in K-12 education as a percentage of Gross State Product (the state’s output) at 3.11%. SOURCE: OSPI

Both short-term help and long-term solutions are needed to fix school funding challenges in Washington State.

In the short term, schools need:

• Full funding for student support programs and staff
• Full funding for the actual costs of special education
• Increase funding allocations for transportation, supplies, insurance, and other school operating expenses to match actual and rising costs.

In the long-term: 

The McCleary “Solution” must be reexamined to fix some of the structural issues and develop a school funding mechanism that recognizes the unique needs and differences of Washington’s 295 school districts. One size does not fit all.