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Olympia

School District

1113 Legion Way SE
Olympia, WA 98501
Office: (360) 596-6100

Board approves interfund loan if needed due to state inaction on budget

In a rare move caused by the Legislature’s inaction to approve a state budget, the Olympia School Board agreed on June 19 to authorize district administration to temporarily loan money from the district’s Capital Projects Fund to its General Fund if necessary to meet operating expenses.

The Board approved the interfund transfer resolution following a public hearing on the topic.

The resolution permits the administration to loan up to $12 million from the district’s Capital Projects Fund to the General Fund.

“The Board does not take this action lightly, but feels strongly that it must ensure school district continuity in the face of inaction by the Washington State Legislature,” said Board President Eileen Thomson.

The Legislature is more than a month late in enacting a state budget and is in its second special session as a result of this inaction. Unless lawmakers approve a budget by the end of this month, the state will begin closing down services on July 1 due to the lack of authority to spend resources by state agencies. As a result, the Office of Superintendent of Public Instruction will not have the authority to allocate basic education funding to school districts statewide, including Olympia.

If the Olympia School District does not receive its appropriate share of state resources in July and August, it may not have the funds to meet its August 31 district payroll, said Jennifer Priddy, assistant superintendent of finance and operations.

The Olympia School District must have the funds necessary to pay its employees on August 31. Therefore, the Board will consider Resolution 561 to borrow payroll funds from the Capital Fund. By law the Capital Fund must be paid back by August 31, with interest, from the General (operating) Fund.

The interfund loan will not negatively impact continued progress on the district’s summer construction projects, nor other school improvement projects approved by voters in the 2016 bond election.

For decades the Legislature has underfunded public education. In 2012 the Supreme Court demanded that the Legislature fully fund basic education. After five years of study, debate and planning, the Legislature still has not come to an agreement on how to meet the Supreme Court’s demands.

The school board is hopeful that the Legislature will reach consensus and meet the Supreme Court’s mandate. The school board encourages community members to contact their local Legislators to express how important it is to comply with the Supreme Court order and fully fund basic education.