MVSD Faces Budget Gap From Declining Enrollment, Rising Costs

MVSD faces a $460,000 budget gap next school year out of a total budget of $18 million. Enrollment is expected to decline to 725 students next school year, down from roughly 733 currently, which is down from 753 in September 2025.

Enrollment numbers include students in REACH, a program that provides guided support for homeschooling students and parents, and Running Start, which allows high school students to enroll in college classes.

When enrollment declines, state funding declines commensurately. In the 2024-2025 school year, the state allocated $17,803 per student.

MVSD Superintendent Grant Storey said there is a “bubble” in enrollment, with larger class sizes between fourth and eleventh grade and smaller class sizes in earlier grades.

“We’re projecting a kindergarten class about the size of 35 and our graduating class is about 42,” he said. “We do have some enrollment, both kids adding and leaving in the middle grades, but those trends don’t seem different than they have been in the past.”

“As jobs come into the valley, as housing developments come into the valley, there’s potential for additional families and children to access our resources and our school system. We can’t plan on that. We have to wait and see.”

Cutting Farther From the Classroom

As under the previous administration, Storey said he is focusing on cuts that would have the least impact on students. There are no plans for layoffs, but vacancies from retirements, resignations, and leave requests will not be filled and positions will be shifted to ensure coverage.

“What that does is it gives us one time to be strategic and not reactive as we plan for budget tightening in future years,” said Storey.

“I think we’re responsible stewards of public resources and we have an excellent public school. We also receive a large amount of community support, also through our local levies and support of our educational partners. It certainly fills gaps where the state is not, and it also creates opportunities for our youth in this community that would not exist otherwise. I think one of the reasons why we are doing this is because we understand we can’t keep going to our community and asking for more and more. There has to be a sustainable balance.”

Systemic Challenges

Storey points to gaps in the current state funding model.

“This is more of a systemic challenge that public schools are seeing across our entire state. Material supplies and operating costs are outpacing what the state is providing. We’re seeing decreases in federal funding. We’re seeing increases in… most school districts are seeing increases in staffing costs.”

“The district has done a really good job in the past of putting ourselves in a stable financial situation. We were healthier than a lot of school districts, but we’re still feeling a lot of pressure and we’re seeing increases in our expenses and our revenues aren’t matching those increases and expenses.”

We’ve Gone Through This Before

When asked why school districts seem to go through feasts and famine, Storey attributes the current situation to inflation and underfunding.

I think that is a really critical question about why do we keep finding ourselves looking at these situations. I think this school district has done an incredibly good job of being fiscally responsible and utilizing public resources responsibly. That’s evidenced in how we have been able to maintain and grow our ending fund balance and being in a place where we can strategically invest our ending fund balance to preserve programs and minimize disruptions.

I think we continuously see our expenses increase and that’s very similar to the reason all of our expenses are increasing. Personally, at home, we we’ve seen our expenses increase. I think in schools, that pressure is higher because the insurance for schools is growing at a higher percentage. Our materials, supplies, and operating costs are growing at a seven to 10 percent increase. That’s what it looks like over the last several years, which outstrips the normal metric of inflation that you get. And those costs are very specific to schools. You’re seeing your staffing costs increase, and what you’re not seeing is similar investments from the state, from its prototypical funding model.

I’m not going to advocate for any specific legislation, but I do think it’s a systemic problem that we all have to kind of look at, understand. It’s not necessarily the amount of money that the state invests, but how the state is deciding how much money to invest. I think the prototypical funding model is something that the state needs to look at closely.

When asked what he would change about the funding model, Storey responded:

Right now, the prototypical funding model is- the state enrollment allocation is driven largely by enrollment, and it’s driven by the previous year’s enrollment. There’s different ways that you could do that. You could look at enrollment over a longer period of time, which then kind of stabilizes the risk to fluctuations.

They have costs that aren’t realistic. We get a certain allocation for increased living costs, staffing costs, that doesn’t match realities of how much staffing costs really do increase. We get a certain percentage increase for material supplies and operating costs. That’s mismatched to the percentage that costs are actually increasing.

I think we’re looking at a real challenge, but it’s manageable, and I think the district is approaching it thoughtfully to maintain strong opportunities for our students. We’re trying to be really fiscally responsible for both the local resources that our community provides and we’re trying to think how we can do this sustainably and maintain our programs and opportunities for our students and as much of our staffing.

Impact on Facilities Planning

Storey is working with a community advisory task force and Consertus, an outside consulting group, to assess building needs and structural improvements in succeeding decades. Storey said they are looking at trends and evaluating undulations since 2013.

“You want to plan for the students that you have, the students you potentially might have, and not build facilities for an enrollment that’s dramatically lower than that. It’s a really important thing that we’re going to look at,” he said.

We’re projecting for a smaller kindergarten class next year and we don’t have any evidence otherwise that would predict that those classes are going to be much bigger or much smaller in the next coming years. So we’re looking at kind of a steady, smaller group in kindergarten.

If you look over the past 13 years, the Methow Valley School District, our graduating classes average between 30 and 50. Right now, we have a bubble where the graduating classes are between 50 and 70. So the question is, is that bubble part of a natural undulation in the Methow Valley School District, where we go from 30 to 50, 50 to 70, it just kind of cycles like this, or are we regressing back to some mean where we’re closer to 30 and 50 and that’s kind of steady. I don’t know the answer to those questions.

As we’re planning our budget, we’re planning two to three years out. As we do facilities task force, that plan is 20 to 25 years, so it’ll be a little bit trickier.

Despite the challenges, Storey said he is confident that this school district is going to get through it as it has in the past.

“I am 100% confident that through all of this, our schools are going to remain excellent.”