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Finance - School Funding

A Guide to Understanding School Funding

Our commitment to excellence in serving the students of our district, visible in all that we do, is made possible through sound financial planning. Good stewardship of public funds requires transparency, accountability, and efficiency in the district’s finances. Together, the families, employees, and taxpayers of the Pullman School District have established a solid foundation for the district, and for the children who are the future leaders of our community.

The following page provide descriptions and definitions of budget information to promote understanding of the district’s annual budget and the expenditures and revenues comprised within it.

What is a School Budget?

A budget is the school district’s financial plan for the upcoming year. It helps ensure the district is financially stable and can continue providing quality education to students. A well-planned and well-managed budget is essential to keeping our schools running smoothly.

The budget covers one fiscal year, from September 1 to August 31. It sets a maximum amount of money that can be spent in each area. By law, the district cannot go over these limits. A draft budget must be prepared by July 10, and the School Board must officially approve it by August 31. The district cannot collect taxes or spend money until the budget is approved.

To prepare for unexpected costs or program changes, the district builds flexibility into the budget. This helps avoid delays from having to request permission from the state for additional spending. It also allows school leaders and the board to stay focused on student learning instead of paperwork.

Throughout the year, principals and program managers regularly review their budgets and make changes as needed to support students and schools.

 

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Fund Types

A bar graph showing the allocation of funds across different categories.

  • Operating budget that guides day-to-day operations (salaries, benefits, insurance, utilities, etc.)

  • Covers long-term school construction and repair needs and cannot be spent on school operations.

  • Pays the principal and interest on bonds issued to finance school construction and renovation.

  • Accounts for middle and high schools’ extracurricular activities.

  • Used to buy or make major repairs to school buses.

General Fund: Where Our Funding Comes From

  • The majority of the district's revenue—81%—comes from state funding, which is divided into two main types: general purpose funds, called "state apportionment," and special purpose funds, known as "categorical program funding." Most special purpose funds are allocated for specific programs and cannot be used for other expenses.

     

    The amount of funding each district receives is based on the average number of students enrolled throughout the year and state-established formulas. These formulas consider factors like base salaries, employee benefits, supplies, materials, and operational expenses. Special purpose funds help support programs such as special education, student transportation, bilingual education, and learning assistance.

  • Local revenues contribute 14% of the general fund and are essential for providing a well-rounded education. Most of this funding comes from local property taxes, with additional income from non-tax sources like fees, fines, rental payments, interest earnings, and donations. Compared to other funding sources, local levy funds offer the most flexibility in how they can be used. Levies are the second largest funding source for Pullman Public Schools.

  • Federal funding is strictly limited to specific programs and accounts for up to 5% of the district’s revenue. These funds support targeted initiatives, including school improvement (Title II), aid for disadvantaged students (Title I), and assistance for students with limited English proficiency (Title III). Additionally, federal funds help offset the cost of free and reduced-price meal programs and provide extra support for special education services.

A donut chart shows the revenue sources for Pullman Public Schools in 2023-2024.

General Fund: How Money is Allocated

Two basic factors determine how state resources are allocated to schools in Washington:

  1. The number of students attending each school
  2. The special needs of students, such as poverty, disabilities, and limited English language skills

 

Student Enrollment & Headcount: What is Headcount & FTE?

Headcount refers to the total number of students enrolled, while Full-Time Equivalency (FTE) represents the proportion of time a student attends school, with a full-day student counted as 1.0 FTE. Enrollment projections for the fall directly impact staffing levels, determining the number of teachers and support staff each school receives. Since school funding is primarily based on FTE enrollment, staffing, salaries, and benefits are all tied to student numbers.

Demographic factors like birth rates and housing costs can influence enrollment trends, creating challenges for funding. School operating budgets, equipment, and other resources are allocated on a per-pupil FTE basis, making enrollment the key driver of state basic education funding. As enrollment declines, so do revenues, affecting the district's ability to maintain programs and services.

Student Enrollment Drives Revenue

100 students = ~$1 million

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A calculator sits atop a pile of US dollar bills, with a pen and sticky note nearby.

Why is there such a focus on General Fund Balance and unreserved fund balance in particular?

Part of the State accounting process each year is to project our beginning and ending fund balance. If the district spends less than our revenue in a given year, the remainder is fund balance.

The ending fund balance has two parts to it: reserved fund balance and unreserved fund balance:

  • Reserved Fund Balance: Exists for assets we have for a specific purpose. This includes carryover, or unspent funds, from programs with inflexible expenditures. It also includes things such as inventory of food items that have not yet been made into a meal and served/sold to students.
  • Unreserved Fund Balance: This is considered liquid cash - available to use on any district expenditure and saved for other eventualities, such as lower enrollment than expected or an unexpected expense.

Budget Presentations

 

Reading the Budget

Revenue Codes

 

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  • Revenue from real and personal property tax collections (ex: local levy).

  • Locally generated resources not including tax levies. These revenues include tuitions and fees, sales of goods, supplies and services, investment earnings, gifts, grants, and donations, fines and damages, rentals and leases, insurance recoveries and e-rate digital technology rebates.

  • Revenue from the State General Fund for the operation of the basic education program. This includes the regular apportionment and special education. This also includes local effort assistance (LEA), which is a state program intended to lessen the impact of high property tax rates due to low property valuations.

  • This revenue comes from OSPI for special programs. These programs include, but are not limited to, special education, Birth to Three, Learning Assistance Program (LAP), special pilot programs, transitional bilingual, highly capable, school food services, and transportation operations.

  • Revenue includes direct federal grants, impact aid, and federal forests. Pullman School District does not currently receive revenue in this category.

  • Revenue from any federal source distributed through OSPI. This includes special education IDEA, Medicaid reimbursements, CTE Carl Perkins grant, Title I Disadvantaged, Title II Other grants, Title III Limited English, Title IV Indian Education, and school food services for reimbursement of eligible school breakfasts, lunches, snacks and milk served.

  • Revenue from other school districts for the provision of serving their students.

  • Revenue in this category comes from nonfederal resources provided by local agencies, governments, foundations, and governmental associations not provided for elsewhere. This could include, but is not limited to, revenue from other public entities using school facilities or transportation services.

  • Record revenue for the face value of the sale of bonds, sale of real property, sale of equipment, long-term financing, sale of bond refunding, and transfers between funds.

Expenditures Programs

  • Provides kindergarten through twelfth grade public education to pupils, which shall include instruction in reading, language arts, mathematics, social studies, science, music, art, health, physical education, industrial arts, and other subjects and activities, deemed appropriate by the school district.

  • Program expenditures includes the series of programs for the education of eligible special education students. These are excess cost expenditures for providing special education and related services to special education-eligible students.

    “Excess costs” are those expenditures for special education and related services for special education students that exceed the amount needed to provide a basic education to these students.

    An “eligible special education student” means a student receiving specially designed instruction in accordance with a properly formulated individualized education program (IEP).

  • These include direct expenditures incurred for operating vocational education secondary programs approved by OSPI. Vocational work skills include, but are not limited to, family and consumer sciences education, business education, marketing education, agriculture education, health occupations education, trade and industrial education, technology education, and career education.

  • Includes direct expenditures for operating a secondary vocational skill center program approved by OSPI.

  • Programs designed to assist student participation in the regular instruction program to improve the quality of education for students who are deficient in basic skills achievement in reading, mathematics, and language arts. Examples of the programs include Title I and Learning Assistance Program (LAP).

    Expenditures in these programs also includes expenditures for Transitional Bilingual, which is a supplemental service for the benefit of students in the bilingual education program in the district. Under this program, an eligible student is one whose primary language is not English and whose English language skills are significantly deficient or absent.

  • Summer school programs and services for the benefit of highly capable students are charged to this category.

  • Expenditures for operating programs primarily for the benefit of the whole community or some segment of the community. Includes direct expenditures for custodial services or the food service program for the rental of school district facilities.

  • Support services programs consist of activities to accomplish objectives that support the educational programs of the district. These include the following:

    • Districtwide Support – These are shared expenditures related to the operations of the school district as a whole rather than any particular program. Programs include the board of directors, superintendent’s office, technology, maintenance and grounds, custodians, utilities, insurance, human resources, finance department, and supplies and operating costs related to these departments.’
    • Food Services – Costs involved with preparing and serving meals and a la carte items to pupils under the National School Lunch Program, School Breakfast Program, Special Milk Program, and the Fresh Fruits and Vegetable Programs.
    • Pupil Transportation – Expenditures for transporting pupils to and from school, including between locations in the district, during the school year. Expenditures in this program also includes transportation staffing and safety.

 

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Types of Expenditures

General Fund revenues are generally used for financing the normal and recurring operations of the school district such as programs of instruction for students, food services, maintenance, data processing, printing, and pupil transportation. The following is a brief description of types of expenditures typical to the General Fund:

 

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  • Are used to transfer direct expenditures in and out of another program within the general fund. The net effect of these transfer must be zero.

  • Expenditures for salaries of certificated employees. A certificated employee is an individual who holds a professional education certificate issued by OSPI, typically teachers and administrators.

  • Expenditures for salaries of classified employees. A classified employee is any individual not in a certificated teaching or administrative position.

  • Expenditures for employee payroll benefits and taxes. Examples include, but are not limited to, social security and Medicare taxes, state retirement, unemployment insurance, and workers’ compensation.

  • Expenditures for supplies, instructional classroom resources, and non-capitalized items. The items must have a useful life of less than one year and/or have an acquisition cost that is less than $5,000 or the minimum capitalization value established by the school district.

  • Expenditures for services and associated goods from independent contractors or service providers that are rendered to the school district under contracts.

  • Used to record expenditures for authorized travel in accordance with the policies of the school district. This travel may include contractual services for transporting school district employees and students from place to place and the accommodations incidental to travel and other expenditures required with travel.

  • Is used to record expenditures for capitalized equipment and improvements to buildings and/or grounds infrastructure. Equipment is defined as a tangible item of personal property having a useful life of more than one year and a purchase cost which is $5,000 or more. Included are those items consisting of bulk items (individually not meeting the capitalization amount, but in bulk volume meets the capitalization amount).

Budget Frequently Asked Questions

    • The State Auditor's Office conducts three annual audits of the District: financial statements, accountability, and federal grants. These reports can be found at: PSD Audit Reports.
    •  The NorthEast Washington Educational Service District 101 (NEWESD) reviews the district’s budget annually each summer, before submission to the Washington State Office of the Superintendent of Public Instruction.

  • During the May 22, 2024 Regular Board Meeting, the following slide was presented outlining the Budget Action Plan:

    To balance the budget and to be proactive in our planning, here are examples of cost-saving measures the district is reviewing and/or implementing:

    • Administration Reduction: Reduce and consolidate the number of administrative positions.
    • Attrition: Use attrition (retirements and resignations) to the extent possible to close the budget gap.
    • Staffing Allocations: Review all staffing allocations per building and program and adjust as needed with the collective bargaining parameters.
    • Professional Development: Reduce professional development spending.
    • Facilities Use Fees: Increase facillties use fees to help offset utility and insurance increases.
    • Postage: Utilize digital communication methods to reduce printing and mailing costs.
    • Chromebook Protection Plan Fees: Increase Chromebook Protection Plan fees.
    • Water and Electric Conservation: Review and implement water and electric conservation measures.

     

    A Budget Adjustment Presentation was presented at the June 12, 2024 Regular Board meeting. To  review the presentation that outlined Budget Adjustments for the 2024-2025 school year, please click the link below: 

    • Reference and share the resources available on our website.
    • Participation and engagement with PTA/PTO/Boosters Parent Groups, or the Pullman Education Foundation will keep you connected to the support those organizations so generously provide.
    • Volunteer to help in your child(ren)’s classroom, school, and enrichment activities.
    • If you're interested in getting involved and advocating for education funding, we also encourage you to connect with your District 9 Legislators:

  • The Superintendent & School Board have:

    • Met with PTAs, student groups, staff at every school, and staff in all departments across the district to share complete information about the budget and received input and feedback from those in attendance
    •  Met with community organizations to share information on the state of the district, status of the budget, and the shortfalls the district is facing
    • District Finance Committee, which includes two Board Directors, meets monthly to advise on the proposed way forward
    • Joined in local and state funding advocacy for increased funding for special education, transportation and Materials, Supplies and Operating Costs (MSOCs)
    • Shared complete budget information regularly through board meetings, weekly updates to the school community, monthly updates through the superintendent newsletter and Pullman Community Update, and on the district website about the current structural funding shortfalls and how to participate in the legislative process
    • On March 19, 2025, the district hosted a presentation-based community listening session to share key updates on the budget and district priorities. Attendees had the opportunity to provide real-time feedback through an interactive survey, which was also shared during school staff meetings and distributed to families for input at their convenience.
    • In the Fall of 2024, our Superintendent and Board of Directors, together with other Whitman County educational leaders, had the opportunity to host District 9 legislators and legislative candidates for a collaborative discussion on key issues affecting K-12 education
    • School Board implemented a Board Communication Plan

  • There are many important deadlines that shape the overall timeline and guide the progress of the budget development process:
    • Enrollment projection – estimates the number of students we will have in the fall of a school year and builds the revenue outlook from that forecast. A preliminary, early projection is completed midway through each school year. This projection will continue to be adjusted/informed through the spring as we see registrations or any other indicators of increased student enrollment
    • End of the legislative session, each spring, sets the state budget and resources for schools. 
    • May 15th – the date by which all of our certificated staff (teachers & principals) are guaranteed to know their contract status for September. If we need to reduce staff, they must be notified by May 15.
    • July 10th (adjusted for weekends) – the district must have a draft budget available for review by the public and submitted to our educational service district for review. 
    • By August 31 – the final budget must be adopted. 
    • The district cannot wait for the end of the legislative session to project our budget and make adjustments before the May 15 deadline, which is why we have to engage in budget planning work so early each school year.

  • If a district is in binding conditions, OSPI provides additional oversight and counsel for support in returning to a financially healthy position. OSPI works with the district to establish a plan, such as fund balance targets, a monthly cashflow schedule, determination of borrowing and repayment of funds, and additional reduction efforts. 

We encourage members of our community to submit questions and comments throughout our budget development work for the 2025-2026 fiscal year. Questions received will be used to create this FAQ page. 

Summary of Community Input on District's Budget Priorities

As part of the School Board and District Administration's ongoing commitment to transparent and collaborative decision-making, the Pullman School District Board of Directors and District Administration gathered input on the district's budget priorities from March 10, 2025 to April 2, 2025. This process included a presentation and interactive survey shared during the community listening session on March 19, 2025, and at staff meetings. It was also distributed electronically to staff and families across the district as a self-paced presentation and survey to gather feedback on budget priorities and values. Over 300 participants shared their perspectives, helping to inform the district’s strategic approach to financial planning. The summary below highlights key themes from the input received, including priorities around educational excellence and quality instruction, student safety and well-being, and strategic resource allocation and efficiency.

 

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Click here to view District Budget Priorities Input Summary 2025.

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