The Camas School Board will have some tough budget decisions ahead of them in the coming years.
That was the message the school district’s finance director, Jasen McEathron, delivered during the board’s April 18 workshop.
“We are approaching this new age for the Camas School District,” McEathron told the board earlier this month. “Enrollment is the single biggest thing that drives our funding … We were experiencing 2.5 percent growth before the (COVID-19) pandemic. Now we’re forecasting pretty modest growth over the course of the next four years, so it’s definitely different.”
A new enrollment forecast shows the Camas School District’s student enrollment is expected to grow again, but much slower than in the pre-pandemic years. Though the pandemic caused some Camas families to withdraw their students from public schools, McEathron said the forecasted enrollment slowdown is also due to factors that existed even before the pandemic.
“Birth rates are down and the cost of housing in Camas is very expensive,” McEathron said. “So we cannot expect to see 2.5 percent growth. We were already on a pathway for enrollment to slow down, and that was going to change our revenue curve.”
The drop in enrollment means Camas school officials are facing revenue decreases since most state funding is tied to a district’s student enrollment numbers.
In 2022-23, budget projections show the district will bring in $110.3 million in revenue, but will have $115.9 million worth of expenditures — 88 percent of which is tied to staff salaries and benefits. This means the district will need to use $5.6 million in fund balance — taking its reserves from around $18 million down to $12.4 million for the start of the 2023-24 school year.
And while Camas may get some revenue “wins” – perhaps more money from the state to make up for the fact that the district employs more experienced teachers who often garner higher salaries – McEathron said school board members will still have to grapple with revenues in the coming years that are lower than the district’s expenditures.
“I love to provide pathways and solutions, but this one is tough,” McEathron said of the district’s impending revenue shortfalls. “There’s not one (budget scenario) that doesn’t come without some sacrifices or some pain or organizational strife. It’s the situation we’re in – we have to adjust to the new funding model.”
McEathron has been meeting with members of the district’s budget committee, which includes union representatives, school board liaisons, community members and representatives from the Camas Boosters, Camas Educational Foundation and parent-teacher associations, since February.
On April 18, McEathron brought the budget committee’s recommendations to the school board and discussed preferred budget scenarios for the next four years.
The budget committee’s discussion hinged on three “levers,” McEathron said: using the district’s fund balance reserves along with cost containment strategies and budget cuts to help offset revenue shortfalls and balance the budget within four years.
“The committee (suggested) using fund balance heavily in 2022-23, and less in the (following three years),” he said. “Once you use your fund balance in the first year, cost containment should take over. (The committee) realized the effect budget cuts would have on staff and students … so they wanted to use cost-containment levers where possible.”
Thanks to one-time revenue sources connected to federal pandemic relief packages and legislative relief from the state intended to make up for falling enrollment during the pandemic, the school district will soon receive around $1.9 million in additional revenue. McEathron said that money will be added to the district’s $16 million fund balance and used to help hold things steady during the 2022-23 school year.
“The rationale was that we’re still in a pandemic. We’re not out of it. We’re not in a position to say we definitely know what our operations will be next year, so using fund balance allows us to maintain the operational level where we’re at right now and not make any significant changes,” McEathron said.
The budget committee wanted to see a balanced budget by 2025-26, but did not want to rely too heavily on the district’s reserves (fund balance) to make up for a drop in revenues.
“No one was comfortable going four years without a balanced budget,” McEathron told the school board during the April 18 workshop.
To get to a balanced budget, the board will likely vote to use as much as $5 million from its nearly $18 million in reserves during the 2022-23 school year and then look to cost contaminant mechanisms — including capping salary increases that are now around 6 percent to 2 percent during the 2023-24 school year and to 1 percent during both the 2024-25 and 2025-26 school years — to help prevent major budget cuts.
In the budget models McEathron presented to the board on April 18, he showed the school officials what happens when they increase or decrease certain “levers” such as fund balance (reserves), cost containment methods and budget cuts.
In the model preferred by the majority of the board, the district would use $5 million from its fund balance in 2022-23, $2 million in 2023-24, $1.1 million in 2024-25 and none in 2025-26, leaving the district with $10 million — a little more than 8 percent of its total budget — in its reserves by the end of the four-year budget period.
The board agreed it would need to reign in costs over the next four years. In the model the board seemed to prefer, costs would still increase at a rate of about 6 percent during the 2022-23 school year, but would then drop to 2 percent in 2023-24 and to 1 percent in 2024-25 and 2025-26.
Even with these measures, the district would need to make $600,000 in budget cuts during the 2022-23 school year –cuts McEathron said will likely be covered by normal staff and services attrition — and $2.4 million in budget cuts during the 2023-24 school year.
The budget committee also suggested the board try to keep 10 percent of its budget in its fund balance reserves and to not drop below an 8-percent fund balance.
In summarizing the budget committee’s suggestions to the board, McEathron said: “You utilize fund balance in the immediate year. Then you contain cost increases by negotiating contracts to stay the course,” McEathron said.
He added the budget committee would rather see the district retain employees and, since salary and benefits costs make up more than 88 percent of the district’s budget expenditures, the committee opted for a budget scenario that would save jobs by lowering salary increases across the board.
“If revenues materialize, you can pass that on (to the employees),” McEathron told the board, “but it’s tough to give money to someone you’ve already cut.”
The school board members agreed it would be hard but necessary to decrease the district’s annual salary and other expenditure increases.
“Our expenditures have to follow the revenue and we need to maintain that 1 to 2 percent (expenditure growth) … but going from 6 percent to 1 percent in that short of time is going to be hard,” said school board member Connie Hennessey.
“I think the budget committee recognized you can impact some or sacrifice all,” McEatheron said. “From their perspective, they viewed it as more palatable to have a shared sacrifice.”
McEathron added that the district is facing revenue growth of around 2 percent a year, so the district’s expenditures will need to someday align with those revenues without relying on reserves to see them through.
“The only reason we have a choice (to not lower costs in 2022-23) is because we have a fund balance,” McEathron said. “But it only gets us so far, and there are ramifications to relying on it. It’s great to have a fund balance, but it doesn’t solve the problem of getting expenditures in line with revenues.”
The Camas School District will post a preliminary 2022-23 budget by July 10. The school board will hold a public hearing and adoption on the proposed 2022-23 budget on Aug. 22. For more information about the school district’s budget issues, visit