The Key Takeaway
The $8 million deficit demonstrates that SoWashCo needs to act. It does not, by itself, explain the $13 million target.
There may be a financially responsible reason for the difference. The district may be accounting for a larger future deficit, delayed savings, forecast risk, or the need to rebuild its General Fund balance.
The public should not have to guess which explanation applies. Before approving reductions that may affect students, employees, families, and schools, the district should show how the current budget, the $13 million adjustment target, Policy 701.2, and the five-year plan fit together.
That is not opposition to responsible budget action. It is the information required to determine whether the action is responsible.
South Washington County Schools is developing approximately $13 million in budget adjustments for the 2027–28 school year.
The district’s newly approved 2026–27 preliminary budget, however, projects an approximately $8 million General Fund deficit.
That leaves an obvious question:
Why is the adjustment target $5 million larger than the deficit shown in the current budget?
There may be a reasonable explanation. The $8 million deficit and the $13 million adjustment target do not necessarily measure the same period or solve exactly the same problem.
But the district has not yet published enough information for the public to reconcile the two figures.
The Current Budget Shows an $8 Million Deficit
For 2026–27, the General Fund budget includes approximately:
- $359.1 million in revenue
- $367.1 million in expenditures
- An $8.0 million deficit
The General Fund supports most regular district operations, including instruction, special education, transportation, facilities, administration, technology, and student support.
Because the district expects to spend more than it receives, it plans to cover the difference with its existing fund balance.
The total General Fund balance is projected to decline from approximately $56.3 million to $48.2 million.
That establishes that corrective action is necessary. It does not, by itself, establish the appropriate size of that action.
The Two Figures Cover Different Periods
The 2026–27 budget covers the fiscal year ending June 30, 2027.
The proposed budget adjustments are expected to affect the following school year. By then, revenue, enrollment, salaries, benefits, transportation costs, and other expenses will have changed.
The 2027–28 deficit could therefore be larger than the $8 million shown in the current budget.
The adjustment package may also take time to produce its full savings. A position eliminated through attrition, a building change, or a redesigned service may save less during its implementation year than it does during a complete fiscal year.
For these reasons, comparing $8 million and $13 million directly does not prove that the district’s target is too large.
It does show why the district should publish the calculation connecting them.
Why a $13 Million Target Could Be Reasonable
Several legitimate factors could explain why the target exceeds the current deficit.
The deficit may grow in 2027–28
The current budget already shows expenses growing faster than revenue.
General Fund revenue is projected to increase by approximately 1.0%, while expenditures increase by approximately 2.9%. Salaries, employee benefits, and purchased services are all growing faster than total revenue.
If that pattern continues, the following year’s deficit could exceed $8 million.
The district may need to rebuild its fund balance
District Policy 701.2 establishes a General Fund balance benchmark of 16.6% of annual expenditures.
The 2026–27 budget projects a total General Fund balance equal to only 13.1% of expenditures. That total also includes restricted and nonspendable amounts that are not necessarily available for general operations.
For context, 16.6% of the projected $367.1 million in General Fund expenditures is approximately $60.9 million. The projected total ending balance is approximately $48.2 million, a difference of roughly $12.7 million.
That difference is strikingly close to the $13 million adjustment target.
It may be part of the explanation, but it is not proof. The policy benchmark may apply to a more specific balance classification, the adjustments occur in a later fiscal year, and future expenditures will change the dollar value of the benchmark.
The district should explicitly state whether restoring compliance with Policy 701.2 is part of the target calculation.
Some savings may be temporary
A $13 million package does not necessarily provide $13 million in permanent annual savings.
Some adjustments may involve:
- Delayed purchases
- Temporary vacancies
- Grant funding
- One-time revenue
- Deferred maintenance
- Use of restricted or assigned balances
- Other actions that improve only one budget year
One-time actions may provide useful transition time, but they do not permanently reduce a structural deficit.
First-year savings may be lower
Implementation timing also matters.
A change described as producing $1 million in annual savings may generate less during its first year if it begins after the fiscal year starts or requires transition expenses.
The district should therefore distinguish:
- First-year savings
- Full-year savings
- Recurring annual savings
- One-time savings
- Implementation costs
Without those distinctions, the $13 million headline may overstate (or understate) the package’s long-term effect.
The target may include a risk allowance
Forecasts depend on assumptions about enrollment, state funding, inflation, employee compensation, special-education costs, transportation, and other variables.
The district may reasonably want protection against assumptions proving too optimistic.
If the $13 million target includes a financial contingency, the amount and purpose of that contingency should be disclosed.
Why the Current Information Is Not Enough
The current annual budget tells us what the district expects during 2026–27.
It does not show:
- The updated projected deficit for 2027–28
- The calculation used to establish the $13 million target
- The expected first-year effect of each adjustment
- How much of the package is recurring
- The General Fund trajectory after implementation
- Whether the balance returns to the 16.6% policy benchmark
- What financial problem remains for the five-year plan
Without that information, the public can react to individual reductions but cannot evaluate the overall financial strategy.
A proposal could contain $13 million in highly disruptive reductions and still be insufficient if the long-term deficit is larger.
It could also reduce more services than necessary if the financial target is based on outdated assumptions.
The purpose of an updated forecast is to distinguish between those possibilities.
The One-Year Adjustment and Five-Year Plan Must Connect
The district is pursuing two related processes:
- A one-year budget adjustment expected to affect 2027–28
- A broader five-year plan intended to address longer-term educational, operational, enrollment, facility, and financial questions
The one-year process should stabilize the immediate financial position without prematurely deciding every long-term issue.
The five-year plan should then address the structural questions that cannot responsibly be solved through a single round of reductions.
But that division of responsibility must be explicit.
The community should know:
- Which financial problem the $13 million package solves
- Which problems it intentionally leaves for the five-year plan
- Whether additional recurring adjustments are already expected
- How short-term decisions preserve or limit future options
Otherwise, the one-year adjustment could quietly make long-term strategic choices before the broader planning process occurs.
What the District Should Publish
Before the School Board votes on the adjustment package, the district should publish a clear reconciliation containing:
| Question | Information needed |
|---|---|
| What happens without action? | Updated multi-year forecast |
| Why is the target $13 million? | Calculation connecting the forecast to the target |
| When do savings begin? | Implementation dates and first-year effects |
| Are the savings permanent? | Recurring and one-time amounts |
| What will implementation cost? | Transition and one-time expenses |
| Does the plan restore the fund balance? | Projected balance and percentage by year |
| Does it meet Policy 701.2? | Year the 16.6% benchmark is restored |
| Is more action expected? | Remaining structural deficit assigned to the five-year plan |
| What assumptions drive the result? | Enrollment, revenue, compensation, inflation, and other major inputs |
This does not require a perfect prediction.
Forecasts will change. The district should update them when material assumptions change and explain the differences.
The goal is not certainty. It is transparency about the best information currently available.
What We Can Conclude Today
The current budget supports several conclusions:
- The General Fund has an approximately $8 million deficit.
- The district’s reported General Fund balance is below its 16.6% policy benchmark.
- Expenses are growing faster than revenue.
- Corrective action is necessary.
- The following year’s deficit may be larger than the current one.
The current budget does not establish that:
- $13 million is too much
- $13 million is enough
- The adjustment package restores the policy benchmark
- The package resolves the structural deficit
- No further action will be required through the five-year plan
Those conclusions require an updated multi-year forecast.
Source: South Washington County Schools, 2026–27 Preliminary Budget, approved June 25, 2026.