How school districts across Oregon and Southwest Washington are dealing with budget cuts

Inadequate state funding and the end of COVID-19 relief dollars have left school districts across Oregon with multimillion-dollar budget deficits.

Portland Public Schools officials are planning to cut $30 million out of next year’s budget and administrators at Salem-Keizer Public Schools need to cut $60 million. The Bend-La Pine School Board recently voted to place a local tax levy on the spring ballot in an effort to close their funding gaps. And in Southwest Washington, Evergreen Public Schools is facing a $16-20 million budget shortfall, while Vancouver Public Schools is facing $35 million.

OPB’s K-12 education reporter Natalie Pate joins us to share more about what’s driving the budget cuts and the impact they could have on students and families.

This transcript was created by a computer and edited by a volunteer.

Dave Miller: This is Think Out Loud on OPB. I’m Dave Miller. We start today with dire times for school districts throughout the region. Schools in Oregon and Southwest Washington are dealing with multimillion dollar budget deficits right now and urgent questions about what to cut. OPB’s K-12 education reporter, Natalie Pate, joins us to talk about what’s driving these shortfalls and what cuts might mean for students. Welcome back.

Natalie Pate: Thanks for having me.

Miller: Can you give us a sense for just the scale of the budget shortfalls that we’re talking about here in Oregon?

Pate: Yeah, it depends on the individual school district. But for those most impacted, it’s likely millions or tens of millions of dollars they’ll need to cut from next year’s budget. So for Oregon’s two largest school districts, the numbers are high. Portland Public is poised to cut about $30 million and Salem-Keizer will have to cut roughly $60 million.

Miller: What about Clark County?

Pate: So public education is funded differently in Washington, but districts there are feeling a lot of the same financial restraints. Evergreen Public Schools, for example, will need to cut between $16 [million] and $20 million for next year and about 140 positions would be cut under the initial proposal. And Vancouver Public Schools, as another example, has voted to cut $35 million from its budget and that’s going to slash more than 260 positions.

Miller: These are all large districts on either side of the Columbia or Willamette Valley, but this isn’t just larger districts. Right?

Pate: Correct. Yeah, these cuts are impacting large and small districts as well as districts that are in urban and rural areas.

Miller: So let’s turn to some of the reasons for these shortfalls, starting with state funding. I remember lawmakers saying - this was during the Portland Public Schools, teachers strike - a version of, hey, teachers, we gave you what you asked for. They also mentioned the corporate activities tax, which is funneling more money for K-12 education than ever, once it was implemented. Can you just remind us what state investments in public schools look like right now?

Pate: Sure. So Oregon schools are funded through local, state and federal revenues, and they’re largely based on student enrollment. And you’re right that lawmakers paid the amount that educators advocated for back in the 2023 legislative session. And it’s true that the school budget they passed, which was $10.2 billion, was the largest in state history. However, those same educators would point out that they were advocating for the figure they thought could actually pass, not what was truly needed. And Oregon schools have never been funded at that level the state’s own quality education model formula has said it needs in order to have the types of schools people want. But right now, districts are dealing not only with limited state funding but also with declining enrollment in many areas.

And they’re also facing the end of federal COVID-relief dollars, rising costs, and heightened student social, emotional and academic needs since the pandemic. And all of that is happening in a year that’s been filled with added obstacles–so the teacher strike. severe storms. And you mentioned the corporate activities tax that came from the Student Success Act in 2019. And you’re right, it was a very targeted attempt from the state to identify the greatest needs in schools, to fund the solutions and hopefully improve student outcomes as a result. But the work, the work has been happening to a degree, right? But it was also started before COVID which threw a lot of things off course.

Miller: You mentioned the end of one-time COVID funding. What impact is that having?

Pate: Over the pandemic, Congress gave schools almost $200 billion in three rounds. And it’s referred to as Elementary and Secondary Schools Emergency Relief Funds or ESSER for short. And schools have used that money on everything from building upgrades and sanitation to summer enrichment programs that are meant to help counter some of that learning loss. And now, schools are facing the end of that money. Districts have to decide how to spend the rest of their ESSER Funds by the end of September.

The short answer to your question is that a lot of districts are struggling. Many of the issues that were present in schools before COVID–think chronic absenteeism and teacher shortages–those were only exacerbated by the pandemic and the relief money helped cover some of those needs. But in many states, individual districts don’t seem to have an alternative way of sustaining that funding that created new hires or programs, for example, that were established under those funds.

Miller: But I mean, districts knew this was one time money, that the federal money for COVID relief, it came with an expiration date. So, isn’t this something that they planned for?

Pate: Yes, but I don’t think it worked out the way many people hoped. Ed Week, their research center conducted a survey in the fall that showed nationally, nearly half of district leaders expected to use state funding to cover the cost of the new programs when ESSER runs out, another 37% expected to use local taxes to cover the differences. And about a quarter didn’t really see any funding options available to them. And so some people were looking to Congress to maybe pass sustained funding. Some were looking to individual state lawmakers and a lot of that didn’t happen, or at least not to the extent advocates wanted or fast enough. In Oregon, last spring, school districts were having to vote on and adopt their budgets without knowing exactly the amount that was coming from the state, since lawmakers didn’t pass the bill to appropriate the money to local schools until late June.

Miller: OK. But all that is basically the money inside. What about the spending side? What are some of the big drivers of costs right now for districts?

Pate: In a lot of ways, it consistently costs more money year over year to provide the same services in schools, let alone to expand or improve them. So, personnel and staffing is always a vast majority of costs. Even with declining enrollment, remember that students also have greater needs now and that means schools need more counselors and teaching assistants and others in the classroom and in school buildings. And there’s also inflation and the rising cost of goods and services. It costs more money now compared to just a few years ago to get the same stuff. And this is true of industries other than education too, of course, but schools aren’t immune to that. And that includes having to calculate for things like cost-of-living increases.

Miller: School districts are largely funded on a per district per student basis, meaning if you have more students, you get more money from the state. But since the start of the pandemic, there’s been a big drop in enrollment, meaning less state money. Has it also meant the districts have to spend less?

Pate: Right. In any year, school districts make staffing decisions based on enrollment patterns and a lot gets factored into that, such as mandatory classroom sizes or student ratios that might be protected by a union contract. Bethel School District in Eugene is one example of a district that’s having to make hard decisions because of substantial enrollment declines. Bethel enrolls about 5,000 students for context, and over the past 10 years, the district has reportedly shrunk by about 700 students, more than half of them since the 2019-2020 school year when the pandemic began. And the district decided this week to close an entire school, Clear Lake Elementary, in 2025 to help alleviate their financial issues.

But it isn’t a one size fits all answer. Some districts have bond dollars or local tax option levies that will allow them to continue spending on key initiatives. And the same goes for some state grant money for targeted investments like early literacy.

Miller: So some districts are trying to address shortfalls by going to voters as you just mentioned, levies. What’s happening in Bend-La Pine [School District]?

Pate: Yeah, that local tax levy option, that’s what’s happening in Central Oregon right now. Bend-La Pine School Board voted unanimously last month to place a five-year levy on the ballot this May. An official said it would provide an estimated $21 million in new revenue for the next school year and hopefully help fill some of that state funding gap.

Miller: So let’s turn to possible cuts now. What kinds of cuts have districts in the region already made?

Pate: In a way, none, or at least very few. And I say that because the budget process is really just beginning for districts boards will make final decisions on these proposals over the coming weeks, going into May and June. But for some like the Bethel school closure I mentioned they have voted to move forward with some of these plans. So it varies a lot district-to-district.

Miller: So what might be on the chopping block?

Pate: Well, different districts and even within a single district, we’re going to see them handle the cuts differently. So some places will focus on removing things that don’t take away jobs from current employees and those are cut like supplies, technology, professional development. Some places will simply choose not to fill currently vacant positions and others will have cuts that directly impact current employees, meaning fewer adults in classrooms and schools, and those are the cuts that people are especially nervous about.

Miller. How much could these potential cuts affect students?

Pate: Well, let’s start by acknowledging that the insufficient funding that schools are dealing with is already impacting them. Charlene Williams, who’s the director of the Oregon Department of Education, gave me a few examples of this. Salaries are not staying competitive with the market, there’s backlogs and facility maintenance and there’s daily classroom disruptions that are related to the behavioral health needs of students. And these things contribute to everything from poorer grades, graduation rates, all the way to students not feeling safe or having a sense of belonging in their schools. But there’s no doubt among educators that additional cuts would only make things worse. And it’s very possible students will be facing larger class sizes, fewer program options and just having fewer adults to turn to in the building.

Miller: You’ve done some reporting recently on some of the students with the most serious needs in Portland, in particular. What have you heard in terms of concerns from parents of kids with special needs?

Pate: Yeah, like you said, this is a big conversation happening right now in Portland Public. Of the district’s proposed $30 million in cuts, an estimated $15 [million] to $17 million is likely coming from central offices. And when that was first announced, people assumed central offices meant more of those managerial or administrative roles that oversee the district

Miller: Like legal or HR or communications.

Pate: Exactly. But now we’re seeing estimates that are indicating, you know, 100 and 70 some odd full-time positions that are up for cuts or reductions have at least some student facing part of their job. They’re working with kids in schools for a fraction of their time. And a large portion of that group is referring to folks who work in special education. So these are professionals who help with things like adaptive PE and speech language pathology, for example.

I’ve definitely been hearing from a lot of people, they’re concerned with how much this will affect their kids. And there’s been very little clarity yet on what it’s going to look like. I think the biggest concern is really around feeding teams. These are folks who help kids who for a variety of reasons have issues, swallowing or eating and they need dedicated specialists to help with that throughout the day. And without those specialized teams from the district, folks are worried it could be a life-or-death problem for the kids.

Miller: What are lawmakers or the governor saying right now about the budget crunch?

Pate: Yeah, state officials, they know schools are in a bind. Emielle Nischik, the acting executive director of the Oregon School Boards Association described what schools are facing as being on a financial precipice right, at a time when Oregon is enjoying record revenue. She said investment in schools has failed to keep pace with demands. And Governor Tina Kotek’s ODE director, Dr. Williams also agreed [that] we clearly have work to do.

Miller: Are there any concrete plans right now?

Pate: Yeah, Williams told us that ODE is working closely with the governor’s office and education partners, including school districts, to kind of connect the dots between, how is the state funding education? How do districts spend those resources? And how do we know what success looks like for our students? And they’re trying to tie that in with other efforts from the legislature to work on things like teacher salaries and funding transparency.

Miller: Just briefly, how does Oregon’s overall school funding compare to other states?

Pate: So national research that came out recently showed Oregon is considered a high fiscal effort state, which in other words means that Oregon devotes more of its economic capacity to education spending than most. Of the 48 states who were included in that research, Oregon ranked 13th when we were looking at things like fiscal effort, statewide adequacy and equal opportunity. But the biggest concern was that we need more help for districts that have large numbers of students who are experiencing poverty. And state leaders like Williams emphasize that more money isn’t the only solution. The state should be looking at both how much it invests and how investments are spent.

It’s hard to clearly understand how Oregon’s investments are panning out compared to student outcomes in other states. Our overall graduation rate has historically been one of the lowest in the country. But state officials would point out that we also have higher graduation requirements than most and some historically underserved student groups are seeing major progress. Some research recently has found that Oregon was the only state out of 29 that were studied that hasn’t rebounded from the pandemic when we’re looking at regaining reading and math skills. So we have to factor in test scores, attendance, teacher retention, all of those things to give us a look at how well schools are doing and if the money is paying off.

Miller: Natalie, thanks very much.

Pate: Thank you.

Miller: Natalie Pate is OPB’s K-12 education reporter.

Contact “Think Out Loud®”

If you’d like to comment on any of the topics in this show or suggest a topic of your own, please get in touch with us on Facebook, send an email to thinkoutloud@opb.org, or you can leave a voicemail for us at 503-293-1983. The call-in phone number during the noon hour is 888-665-5865.