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In mid-May of this year, school districts across the state received the final State School Fund (SSF) reconciliation for the 2022-23 school year and revised assumptions for the 2023-24 school year.
For context, and to simplify a system that is quite complex, public schools in Oregon build their budgets on two primary things:
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Revenue - money they project to receive from the Oregon Department of Education (ODE) for the Average Daily Membership (ADM) of enrolled students, as well as a variety of other calculations that take into account teacher experience, students requiring additional services (migrant, housing instability, students with special needs, etc.), transportation reimbursement, timber funds, local property tax collections, and so on.
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Expenditures - money they expect to spend on staffing, benefits, supplies, utilities, administration, service provision, etc.
ODE adjusts the ADM allocation multiple times each year as actual information is received from each of Oregon’s 197 school districts, with a final reconciliation completed the May following the completion of any given school year.
What HSD learned with the most recent reconciliation was that, due to a decline in enrollment and revisions to the ADM allocation, we received a negative SSF adjustment for the 2022-23 school year of more than $4 million, as well as revised assumptions for the 2023-24 school year of nearly $3 million. After running the June payroll, which is when approximately 25 percent of the District’s expenditures are made each year, it also became clear that expenditures in 2023-24 were higher than anticipated in some areas, due in large part to factors outside of our control (e.g. inflation) and the unknown impact of new legislation and associated costs (e.g. Paid Leave Oregon). Because school districts are required to have balanced budgets each year, this burden was shifted to the 2024-25 school year.
The full impact of these prior-year revenue and expenditure changes on the 2024-25 budget was not clear until after September payroll was completed and October 1 enrollment numbers were in. We now know that HSD is facing a shortfall of $9.5 million this school year. Administration has come up with a list of strategies for closing the budget gap in ways that do not directly affect students; however, there are some unknowns as we are still in the midst of bargaining with our licensed and classified employee unions.
Aside from our diligence in managing the budget shortfall we are experiencing this year, a very important task for us is to advocate the Legislature for stable and adequate K-12 school funding in the 2025-27 biennium, a reduction in carve-outs from the State School Fund, and a correction to/avoidance of new unfunded mandates. Visit our website to learn more.
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