The 2026-27 school year will be the district’s first full year without levy funds

Cade Barker
The Reflector Newspaper

The Battle Ground Public Schools Board of Directors approved a $227 million budget that relies on fund balance reserves to cover a $14 million gap between projected revenue and expenditures as the district enters its first full school year without local levy funding.

The board voted 5-0 on Monday, Aug. 24, to approve the 2026-27 budget following a public hearing. The general fund budget projects $212,992,846 in revenue and $227,003,616 in expenditures, leaving expenditures $14,010,770 higher than revenue.

Michelle Scott, the district’s financial administrator, said the budget was shaped by the loss of levy revenue and reductions already made by the district.

The district’s February election “required a $20 million reduction in programs, in addition to the already $14 million that we had already done, and then use of fund balance reserves,” Scott said.

The 2026-27 school year will be the district’s first full year without levy funds.

“This would be our first full year without any levy funds,” Scott said. “So we are going to be required to use fund balance to have to help support that in addition to cuts.”

The district also faces rising operating costs and state funding that does not fully cover those increases. The budget includes a 39.4% increase in fuel costs and an 8% increase in insurance costs.

Scott said the district will receive $372,000 more in basic education materials, supplies and operating costs funding than it received in 2025-26. That increase, however, does not cover the district’s increased fuel and insurance expenses.

“So $372,000 doesn’t even cover our fuel increase of $345,000 and our insurance increase of $200,000,” Scott said. “So this is why we show that even though we have an IPD that we’re receiving, it’s not always enough to keep up with the actual cost that the district is incurring.”

Staffing reductions also account for a significant portion of the district’s budget changes. Scott said 137.2 positions were identified for reduction for the 2026-27 school year. Most of those reductions occurred, although the district added some staffing back to address critical needs in areas including nursing and special education.

Over the past two years, the district has reduced staffing by about 16% compared with 2024-25, with the largest percentage of reductions focused on district and building administration.

The district’s projected beginning fund balance is $25,686,284. After using reserves to help balance the budget, the projected ending balance is $11,675,514.

Scott said the district will completely drain its assigned fund balance under the budget. That reserve can be used for purposes including major curriculum adoptions and unexpected costs.

“In our case, we will be draining that completely out under this budget,” Scott said. “And there will be $0 projected to be left in that balance, which is quite worrisome because when we get to 27-28, we do have curriculum adoptions that are starting to clip off.”

The district’s fund balance policy calls for reserves equal to 4% to 6% of expenditures. Under the adopted budget, the district is projected to have 3.13%.

Scott said the district is about $2 million short of reaching the 4% level and will have to closely monitor its finances during the coming fiscal year.

The district’s four-year projection assumes no levy revenue. Under that projection, the district would need to make additional cuts for the 2027-28 school year if additional funding is not approved.

“If funding is not approved in 27, the district will need to make an additional $13 to $15 million in cuts for 27-28,” Scott said.

Scott also projected a negative $4 million unassigned fund balance in 2027-28. Returning the district to its 4% fund balance policy would require another $9.3 million, putting the total need at approximately $13.3 million.

Without levy funding, Scott projected the district’s OSPI financial health score would fall to 1.25, compared with 3.35 in 2023-24. A score of 1.25 places the district in the financial warning category, she said.

“As you can tell this is a failing score basically,” Scott said. “It is a good summary of how we are going to be very close to being able to maintain operations.”

Scott said the district could face increased financial oversight if a future levy does not pass.

“Should the levy not pass, we would be looking at (being) unable to create a viable two year financial plan potentially,” she said. “So, we would be closer to the financial oversight with contract approval requiring losing local control basically of decisions for the district.”

During public comment, Jessica Cole thanked Scott and district staff for preparing the budget.

“I’m super sorry that this is going to be our first year with no levy at all,” Cole said. “And I support all the work that the staff has done.”

The school board approved the 2026-27 budget 5-0.

This report was first published by The Reflector Newspaper. Reporter Cade Barker can be reached at cade.barker@thereflector.com.