School Funding

There are many reasons, but the largest is that Oregon’s revenue is expected to drop $900 million during this two-year budget cycle due to federal changes and legislation. 

The Revenue Forecast is a quarterly event where the state economist publishes information about the state’s economic health. On November 19, the state will release the updated forecast. It matters this year because it is an important piece of information about whether the state will need to move forward with mid-biennium or mid-year funding reductions. 

Recent federal legislation included a 15% reduction in federal funding. That bill has yet to work its way through the full legislative process, but Salem-Keizer is planning a budget that allows us to continue providing excellent services to our students and community even in the face of unreliable federal and state funding.

SKPS, SKEA, and ASK-ESP are constantly monitoring state funding activity and advocating whenever we can. Right now, we are dedicating most of our energy to understanding the health of Oregon’s economy and its implications for schools and how SKPS will continue providing an excellent education to our students in this fiscal environment. Once we know more about that, we will all be advocating for schools.

The term “mid-year reduction” is a state term. In a nutshell, here is what happens. 

1. Every year, the state forecasts the revenue it expects to bring in. 
2.  When the legislature is starting a new biennium, it builds the state budget on that forecast. If the forecast is inaccurate and low, and the state has more revenue than they expected, there is a surplus. If the forecast is inaccurate and high, the state may not have enough revenue to pay for the budget commitments it’s made. And this sometimes requires a mid-year reduction.
3. The mid-year reduction is how the state right-sizes its spending to the reduced revenue forecast. This is very rare.
4. If the legislature approves a mid-year reduction, each organization that had its funding reduced has to figure out how to reduce its budget to match the reduction.
5. This could happen to schools, and we hope it doesn’t.

There are far too many unknowns to answer that question right now. We will just need to wait and watch. 

Yes, because every student who has dropped from our enrollment is not included in our funding. But overall, state funding increases have still been outpacing the impact of our declining enrollment.

Although we have fewer students, our students have more needs. However, since funding is tied to student enrollment, we will need to start aligning enrollment and staffing.

We do have savings called our “ending fund balance”. Right now, our ending fund balance is healthy, and we can use it to buffer against change. But we are spending it down at the rate of over $20 million per year. Over time, that will become a risk, and we are seeing that play out in other nearby school districts.

By policy, we should have 7-12% in our ending fund balance, which can be thought of as our savings. Right now, we have around $90 million in savings, which sounds like a lot. But one month of payroll is $50 million, which puts our savings into context. As one of the area’s largest employers, we need to maintain savings sufficient to protect our schools and staff by absorbing unexpected expenses.

The Student Investment Account and High School Success are both based on state revenue collections. Between the preliminary district estimated allocations in June and the final allocations in September, the state’s economy started to slip. This reduction was a drop of $2 million over the biennium for SKPS. 

It is too early to answer this question because there are different ways to make reductions. The reality is that 95% of our general operating fund is budgeted to salaries and benefits, so we will have no choice but to impact staff in some manner. That is why we are trying to build a plan together as early as possible, so everyone is fully aware of what is happening while we protect the progress our students are making.

As a district, we are going to prioritize three principles to guide our financial decision-making:

• Keeping students at the center,  
• Protecting the instructional day and year 
• Transparent discussions and decision-making

We are committed to protecting classroom instruction and student support, but beyond that, it is too early to start naming reductions. 

This is a very common and understandably crucial question. Any reductions that specific would go through a technical process in the spring. But right now, it is far too soon for anyone to jump to that conclusion. Right now, we are just building context.

This year, Salem-Keizer is budgeting more than $100 million for PERS.  PERS rates are out of the district's control. The PERS fund and PERS rates are managed by an independent state agency. PERS rates are driven by factors like the performance of the PERS investment funds, the number and type of beneficiaries, and the pace of hiring across the state. In 2027-28, most districts will see a spike in PERS rates because of the funding tools we’ve used to pay for PERS. 

This year, 13 schools implemented the use of Yondr pouches as a tool to implement our district’s personal device policy, which also complies with state law. The one-time cost for this was $220,000 and came from grant funds.

Weapon detection systems represent a significant investment in our layered school safety systems. The majority of these funds come from a settlement payment that is restricted to school climate and safety, as well as the 2018 bond.