Can Seattle Schools really climb out of its $105 million budget hole?

From eliminating its highly capable cohort program to planning the closure of 20 elementary schools in the midst of a $105 million budget gap, Seattle Public Schools is showing signs it's in big trouble.

How did the district get here?

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If you ask Marguerite Roza, director of the Edunomics Lab at Georgetown University, the short answer is that Seattle Public Schools has poorly managed its money. KUOW's Seattle Now turned to Roza, who studies schools and their funding, for insight into the district's predicament. She said bad budgeting has not only gotten Seattle Public Schools to where it is now, but also makes it likely that more cuts are to come.

"You really have to forecast your costs," Roza said. "Seattle locked in a lot of recurring costs that are now really hard for it to sustain. They could have seen that coming, too. [The district] signed a very expensive labor contract in 2022 that drove up costs well beyond what the forecasted revenues were."

Hear Seattle Now's full conversation with Marguerite Roza by clicking the play button on the audio above.

Forecasting would include the fact that enrollment at Seattle Public Schools is dramatically down. There are a range of reasons for this, Roza said: The birth rate in Seattle is down, so there are fewer children. The cost of living in the city is up, so families with kids are more likely to move out of town. Pandemic school closures also led to a loss of enrolled students, as parents sought alternatives to public education. And since funding for Washington's public schools is based on enrollment numbers, this has meant Seattle is getting fewer dollars.

Budgeting imbalances

The district's most recent contract with the Seattle Education Association, approved in 2022, is layered on top of all this. The union contract increased teacher pay in an effort to keep up with the city's rising costs of living.

"At the same time, with labor being the biggest expense, when you move the needle on pay, you've really driven a big expense piece," Roza said. "And the district simultaneously wanted to add staff, and that's where it's in a tricky position ... now we have higher salaries and heavier staff loads. And something has to give."

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To stretch its dollars, the school district has tapped into its reserves and has borrowed money from itself (certain funds can only be used for capitol costs, so the district borrowed from that pot to pay its staff with the aim of paying that restricted money back in the future).

"In this upcoming school year, we will again be spending more money than we have in this district, which means there is even more to pay back," Roza said.

Roza said she expects that Seattle Public Schools will follow through with its plan to cut 20 schools for the 2025-26 school year, and then "make some more, because we took a loan to delay those decisions for a year. So some difficult trade offs will need to be made, and delaying them means we are going to have even deeper cuts."

School funding is tight across the USA

To be fair, Seattle Public Schools isn't alone when it comes to funding woes. The neighboring Northshore School District has been wrestling with a $26 million funding gap, for example. Bellevue, too, has considered closing schools to fix a $9.8 million budget gap. For now, Bellevue has tabled any decisions to close campuses.

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"It is across the country," Raza said. "It is more profound in some of the urban areas, especially ones with some of the stronger labor contracts. Part of it is that ... enrollment is dropping. Another piece of it is that the federal government put in a whole lot of emergency relief funds to recover from the pandemic, and those are disappearing now ... Some districts used that money for expenses that were more one-time things. In Seattle, those dollars got used to make big pay raises, and those are making the budget gaps a little steeper in our area ... Bellevue moved sooner to close some schools, Seattle continued to spend its dollars and is now even further in the red because of the delay."

Seattle Superintendent Brent Jones recently told the school board that he expects the school closures to improve the district's circumstances.

“I’m convinced that bringing us to a smaller footprint is going to allow us to do more things,” Jones recently said. “If we shore up our foundation, we have much more opportunity to be excellent ... I think it’s our duty to really bring our system into stability."

Solutions to school funding troubles

There are a handful of options school districts like Seattle Public Schools have when it comes to such a steep budget crisis, but as Roza puts it, "There's no simple, pain-free way out of a budget gap this big."

The district has already nixed advanced classes, opting instead to have teachers individualize curricula in general classrooms. Eliminating some positions, such as librarians or school nurses, is another option. Eliminating pre-Kindergarten programs, increasing class sizes, and reducing athletics programs are also common proposals seen in budget discussions. But for now, 20 of Seattle's public schools will close.

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"I expect that the district will look at which are the newer buildings, look at how many kids are going to which schools," Roza said. "I hope they're looking at outcomes — how successful the school is with the dollars that it has. "

Moving forward, her suggestion to Seattle school officials is to minimize disruptions for students.

"If there is a cohort of kids that wants to stick together, can we honor that in their new assignment plan until those kids graduate from whatever it is, their middle school, so there is some continuity there?" Roza said.

She added that the district could consider keeping current school staff with those students and having "a school within a school for a few years so there is more of an intact culture, and parents recognize staff when they get there."

"Or do we want to give families a choice? Do you want to go to the school with the big orchestra program? Are you interested in one with stronger athletics?"

KUOW's Dyer Oxley contributed to this article.