Dear Anacortes School District Community,

I am sharing an update with you on the district’s financial challenges and the steps we must take to ensure the long-term health of our schools. These decisions are not made lightly, and we are committed to maintaining transparency throughout this process.

It is important to understand that Anacortes School District is not alone in navigating these financial difficulties. Many districts across Washington State face similar challenges, and this issue is part of a broader trend impacting public education statewide.

Like other districts, we are facing significant financial pressures, including:

• Declining Enrollment: We’ve seen a decrease in enrollment by about one percent annually, which reduces both state and local funding tied to student numbers. A further decline of one percent is expected in the coming years.

• Compensation Levels Exceeding Revenue: Employee contract compensation levels continue to exceed the revenue we receive from the state.

• Rising Costs: Inflation has significantly increased the costs of materials, supplies, and operational necessities, especially insurance premiums and utilities.

• Insufficient State Revenue: State funding has not kept pace with increasing costs, leaving a growing budget gap.

As a result, the district’s fund balance is projected to drop to 1.36% by the end of this school year, significantly below the required minimum of 4%. Over the past three years, we have implemented financial reductions, including a 20% reduction in administrative roles, a 14% reduction in classified staff, and a 3% reduction in teaching positions. These measures have been essential in helping us maintain a balanced budget despite ongoing financial pressures.

Total Reductions: 

• 2022-2023: $900,000

• 2023-2024: $3,200,000

• 2024-2025: $1,300,000

Looking ahead to the 2025-26 school year, we anticipate needing to reduce an additional $1.5 to $2 million from the $50 million budget. This challenge is compounded by expected enrollment declines, employee contract costs exceeding state revenue allocations, and potential increases from employee group bargaining in the coming years. 

The projected budget reductions for the next few years are as follows:

• 2025–2026 School Year: A reduction of $1.5 to $2 million, driven by enrollment declines and potential employee contract obligations.

• 2026–2027 School Year: A reduction of at least $600,000 due to projected enrollment declines and potential employee contract obligations.

• 2027–2028 School Year: A reduction of at least $600,000 due to projected enrollment declines and potential employee contract obligations.
  2028–2029 School Year: A reduction of at least $600,000 due to projected enrollment declines and potential employee contract obligations.

To address these challenges, we are committed to a thoughtful and collaborative process. While staffing reductions may be necessary, these discussions will take place internally, in accordance with our labor group process, and with the utmost respect for the confidentiality of personnel matters. We will continue to keep staff, families, and community members informed as we work through these difficult decisions.

While these reductions are challenging and complex, our commitment to providing high-quality education for every student remains steadfast. We are committed to navigating these challenges and securing a sustainable future for our schools.

Thank you for your understanding and continued support during this challenging time.

Sincerely,

Dr. Justin Irish, Superintendent