Tri-City school district faces cutting $2M more. WA oversight likely
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- Ki-Be superintendent: district will likely overspend budget, enter binding conditions.
- District plans $2 million more cuts for 2026-27 after trimming $1.5 million in fall.
- Cuts will improve Ki-Be’s fiscal health as it seeks an operations levy.
The school superintendent in Benton City says he expects his district will overspend its budget this school year and be placed on “binding conditions” later this month.
The form of elevated oversight by state officials is the result of the Kiona-Benton City School District continuing to deal with the financial fallout of a double levy failure.
As a result, earlier this year, the district’s local tax revenue dried up, while the cost of food, transportation and other operations rose.
Superintendent Pete Peterson says while the school board approved a balanced budget for the 2025-26 school year, their expenses are likely to exceed revenues.
It’s unclear right now how big that gap will be.
Peterson called it a “pothole on the highway of long-term financial success,” and he hopes to show a growing fund balance this time next year.
Ki-Be serves about 1,400 students in the lower Yakima Valley, and employs the full-time equivalent of about 90 teachers and 80 classified staff.
He said Ki-Be’s situation is nowhere close to that of the Prescott School District, which was recently under threat of dissolving.
“We’re in the same position as a lot of districts in the state that are dealing with tax revenue issues and rapidly increasing operational costs, but through strategic planning and cuts to expenses we’ll make it through,” Peterson told the Herald.
That plan includes $2 million more in cuts to Ki-Be schools for the upcoming 2026-27 school year — about $650,000 more than initially expected due to other cost increases.
Reducing those expenses will balance their budget and hopefully correct the negative cash flow.
Ki-Be already has already trimmed $1.5 million from its budget this school year, including eliminating eight positions.
Another 8 to 10 jobs could be cut for next school year, with the focus on leaving positions vacant when employees retire or leave, Peterson said.
The school district is still drafting its new budget, and Peterson said they are weighing “all options.” That could include selling property, though cash from the sale would be deposited in its capital fund and wouldn’t improve the operating budget situation much.
Ki-Be School Board members and administrators plan to host two budget meetings in the coming days.
- At noon on Friday, May 15, it will host work session meeting with the community, then a budget development meeting at 6:30 p.m. on Tuesday, May 19.
Both sessions will be in the boardroom at Ki-Be High School, and no action will be taken.
A draft budget is to be presented to the school board on June 22, with formal adoption on July 27.
Binding WA state conditions
School districts are responsible for producing balanced budgets each school year. When they’re unable to, the Washington Office of Superintendent of Public Instruction places them on “binding conditions.”
The purpose of the program is to provide school districts with additional oversight and counsel to support the district in returning to a financially healthy position. About seven other Washington school districts are currently on binding conditions.
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OSPI has the ability to require districts achieve certain financial benchmarks under binding conditions. Those could include building back up to a certain reserve balance, frequent reporting to the state agency, and increased oversight. The district remains the sole decision maker and financial steward under binding conditions.
Districts that remain on binding conditions for two consecutive years and are unable to prepare a financial recovery plan then enter “financial oversight,” when a committee of experts is formed to oversee and give feedback on what steps should be taken next.
That committee can recommend “enhanced financial oversight” and take over all financial decisions.
School district dissolution is the last action that the state can take.
That involves liquidating a district’s assets and consolidating it with a nearby district, but that would only happen when a school district is financially insolvent. Despite its financial headwinds, Ki-Be is still very much solvent.
Ki-Be funding levy
The district will still need a levy if it wants to retain beloved enrichment activities and supports not covered under the state’s definition of K-12 basic education.
Due to the steep ballot costs, Ki-Be declined to put a measure before voters during the February and April special elections.
Peterson said they’re looking at the November ballot, though discussions about rates and the total amount to request have yet to happen.
If they pass a levy this year, Ki-Be could begin collecting those taxes as early as 2027.
Its local levy made up about 7% of the $24 million in revenues it collected during the 2024-25 school year.
Ki-Be voters last year rejected two identical tax requests. By law, school districts can only go out to voters two times in a calendar year to request levy funding.
