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It’s highly likely the Kelso School District will have to reduce its staff size next school year to make up for a $4 million budget shortfall, but officials hope to do so through regular retirement and not layoffs, said Scott Westlund, district finance director, at a Monday night school board meeting.

“We’ve never had to carry out a reduction in force, and hopefully we won’t have to this year,” Westlund said.

The financial deficit was caused by the state’s “McCleary fix,” which increased the state allocation to public schools, but limited how much a district can raise in the local levy.

While the state is providing bigger allocations to school districts than ever before, it doesn’t always make up for revenues lost to the local levy cap, Westlund said.

Kelso, like many other districts in the state, anticipates it will lose millions of dollars in revenue when the levy cap is fully implemented next school year, 2019-20.

“There wasn’t supposed to be a (budget) challenge. The state, when they passed McCleary, said they would provide additional revenue to make up for the loss of local revenue,” Westlund said. “That didn’t happen.”

The district has until May 15 to notify staff of layoffs, though that deadline will be extended if the legislative session extends past its April 28 ending date.

Leading up to the notification deadline, district officials will prepare budget proposals to present to the board and share at a public hearing in late March, early April, Westlund said.

The last time Kelso considered a staffing reduction was during the Great Recession, but the district didn’t end up having to lay off any employees then, Westlund said.

“We were just fortunate there were enough staff that retired or moved on, so we didn’t have to make those reductions,” Westlund said.

Officials are hoping for a similar situation this time around. The district is considering offering $7,500 incentives to employees who retire early, Westlund said.

“It actually benefits the school district for senior staff to retire if they are replaced by younger teachers,” he said, noting that it can save between $40,000 and $60,000. (Teacher salaries in Kelso are determined by a teachers’ years of experience and total level of education, so a younger, beginning teacher makes less than a veteran

teacher.)

Kelso is not alone in its budget challenges, as several other school districts in Washington are facing deficits post-McCleary, too, Westlund said.

“I’m not aware of any school district in the state that isn’t under the same pressure,” he said.

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