Finances Overview

This section of the Community Report provides a snapshot of the district's finances and factors that affect our budget. For a complete report including a line by line operations budget, please see our Guide to Understanding the Financial Plan.


image of kindergarten ride alongOperating Budget

The Superintendent, working with the Chief of Finance and Operations, prepares an operating budget prior to the beginning of each school year which must be approved by the School Board and submitted to the state Superintendent of Public Instruction before August 31.

Our District has been recognized for its fiscal management (such as keeping administrative costs more than 3.4 percentage points below the King County average) by earning the highest bond rating on Moody's (Aaa) and the Standard & Poor's scale (AA+) of any school district in the state.

For 2016-2017, the District has a $235.4 million operations budget which is used to fund all programs, services, textbooks and materials, salaries, in short everything needed to run the District day to day.

The majority of the District's operating budget is provided by the state on a per-pupil basis. However, this formula does not fully cover the cost of a modern education, and the District relies on a local maintenance and operations (M&O) levy to provide more than 20 cents of every operations dollar. The M&O levy helps cover the gap between what the state provides and the actual cost of staff salaries, transportation, and special education services.

Further aggravating funding shortfalls, the state does not apply its formula in an equitable way across school districts. Issaquah ranked 269 out of 295 state school districts in 2014-2015 in per-pupil funding (Issaquah receives $10,166 per student, compared to the state average of $10,937). (such as keeping administrative costs more than 3.0 percentage points below the King County average) by earning the highest bond rating on Moody's (Aaa) and the Standard & Poor's scale (AA+) of any school district in the state.

Further aggravating funding shortfalls, the state does not apply its formula in an equitable way across school districts. Issaquah ranked 273 out of 295 state school districts in 2014-2015 in per-pupil funding (Issaquah receives $9,599 per student, compared to the state average of $10,465).


State Funding and McCleary

From 2009-10 to 2011-12 (3 fiscal years) the District has had cumulative reductions in state funding totaling nearly $16 million.  State funding as a percentage of District revenues has dropped from 68% in 2008-09 to 60.8% in 2012-13. The trend of declining state revenue subsided in 2012-13 and for budget years, 2013-14 through 2016-17, there was an actual increase in state revenue. State revenue has continued to grow in 2017-18 and will now comprise 64.2% of the District’s operating revenue, an increase of 0.30% over the prior fiscal year (2016-17). The State is still 3.8% below the recent historical peak in state funding as a percentage of total operating revenue. 

The aforementioned reduction in state revenue during the “great recession” was devastating to the education systems across the nation and State of Washington. However, we in Issaquah were very fortunate that during this economic downturn our local voters supported a four-year maintenance and operations levy with increased funding for our schools. The change in statute which allows for this increase expires in 2018 and provides an additional $15M a calendar year in funding. The State legislature has continued to gradually increase education funding pursuant to the McCleary decision, however a large portion of this “new” revenue came in the form of COLA’s (salary increases) and actuarially needed pension rate contributions. Some additional non-categorical revenue has been provided, but the bulk of “new” state revenue is focused on class size reduction for 2017-18. 


HB2242 and Structure Financial Changes:

The legislature has provided significant structural changes to the education funding for 2018-19 and beyond, which include a decrease in local levy authority (capped at $2500 per student or $1.50/1000, whichever is less) this results in a decrease in calendar year 2019 of an estimated $15.2M in local levy collections ($59.7M vs. $44.5M). This drop in local levy funding is coupled with new restrictions on what and how local levy funds can be used to support and supplement basic education.  

The State in 2018-19 also moves away from the current salary allocation model for certificated staff and funds all employee types (certificated, classified and certificated administrator) on statewide minimum salary allocation that is then to be adjusted by regional factors(18% for ISD).  The uncertainty in 2018-19 and beyond is palpable, as many questions have been left unanswered by the legislature.  For example, we are unsure under the new “enrichment levy” and state funding schema how we pay for the nearly $5.4M gap in special education funding that is currently filled by local M&O levy funds. Other major concerns are how we pay or skilled classified employees as well as our administrative staff, without violating the current enacted legislation. 


Bonds and Levies

Outside of the operations budget, district voters can authorize bonds and levies when needed to build new schools and buy school buses and certain pieces of technology. These dollars can be used exclusively for their legally-defined purposes (construction/critical repairs, bus purchases, and technology), and cannot be used to bolster the general operations budget. For example, a school bus levy can be used to buy a bus, but the money to pay the driver, buy fuel, and maintain the bus comes from the operations budget.

The Issaquah community approved three significant 4-year levies in February 2014, which support classroom learning, bus efficiency and safety, and technology. See information on the 2014 school levies here.

To ensure optimal learning and safety, voters also approved a $219 million bond measure in April 2012 that will provide for critical construction and maintenance/repairs for the next eight years.

In addition, voters approved a $533.5 million bond measure in April 2016. This bond provides funding for critical expansion and modernization of district properties, including the purchase of property for and construction of four new schools, rebuilding of Pine Lake Middle School, and expansion and updating of six existing elementary schools.


Continued Support

In sum, our classrooms do amazing work creating the highest standards of educational program with limited resources. We are fortunate to have continued great support from the Issaquah Community and groups such as the Issaquah Schools Foundation and PTSA who work alongside us in realizing our mission.