Low financial reserves and predicted revenue cuts from the state in the beginning of September likely means staff reductions for the Coupeville School District will be necessary, according to Superintendent Steve King.

The state requires districts to notify teachers of any reductions in staff by May 15, King explained. Cuts will likely impact most employee groups, including teachers, administrators and classified staff. District officials are even considering not replacing the high school principal, who is stepping down at the end of the school year, King said.

“We are keeping all our options open right now,” King said.

The district’s policy is to maintain fund reserves of 6 percent, but it’s currently at less than 1 percent. The reserves lost $1 million over the last five years as expenditures have increased more than revenues.

King said many factors contributed to the district’s cost increases, including the raises given to teachers and other staff in 2018 and such unanticipated expenditures as the emergency replacement of the high school roof. At the same time, student enrollment came in lower than expected, which translated to cuts in revenue.

King said the district’s new Connected Food Program did not cause the decrease in reserves. Under the program, the district hired a skilled chef and switched to fresh, grown-close-to-home, made-from-scratch food.

“Before the COVID-19 closure, the annual costs were on track with the costs of previous years,” he said in an email.

With students at home, the COVID-19 pandemic will have little impact on this year’s budget. School officials, however, are concerned about next school year.

State officials are going to have to make significant cuts to the current budget because of the costs associated with the pandemic. Conservative estimates put the number at $4 billion; education will likely be impacted since it makes up more than half of the budget, according to a “frequently asked questions” statement by the district.

Officials anticipate that enrollment may decline because families will move away due to lost jobs, students will enroll in online schools permanently or families will be wary of sending kids back to classes because of continued health concerns.

In addition, the levy collection may decline if people are unable to pay their property taxes.

Local levy funds make up 19 percent of the district’s $15.4-million annual budget. The lion’s share — 75 percent — comes from the state and 6 percent from federal grants.

Any significant cuts would have to involve salaries and benefits, which means staff cuts.

The salaries for certified staff amounts to about 46 percent of the budget, classified staff salaries make up about 16.5 percent and benefits are 25 percent of the budget, according to a budget presentation.