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2010-11 budget questions & answers

June 23, 2010

On May 24, the Portland School Board approved the 2010-11 budget for Portland Public Schools. Then, on May 25, the state issued a new revenue forecast. Faced with a $760 million shortfall, the state is making across-the-board cuts in all areas of state spending. That translates into a $19.4 million cut to Portland Public Schools.

Didn’t the Portland School Board just adopt a budget for 2010-11?
According to board policy, the budget must be amended to reflect this magnitude of revenue reductions. While the 2010-11budget was approved on May 24 and adopted by the board on June 21, the superintendent is recommending an amendment that the board will formally vote on July 19.

How much does PPS have to cut?
The state is reducing PPS funding by $19.4 million, or 4.3 percent of our general fund, on top of the $16 million shortfall we already had to absorb for 2010-11.

Don’t we have enough reserves to cover the shortfall?
The budget that the school board approved for next year already uses $16 million from reserves. Another $19 million would mean reducing that financial cushion by $35 million in one year -- leaving less than 3 percent of our budget reserves or about two or three weeks of operating expenses. That would be a risky strategy; there is no guarantee the state won’t cut deeper in the middle of next school year, and the state economist is already projecting even deeper budget cuts in the next two-year budget.

Other districts have frozen employee pay or cut days from the school year. Could Portland Public Schools do the same?
There are two reasons why we are not recommending either:

  • Along with spending reserves, those are short-term actions. The board and superintendent agree that PPS must look for sustainable savings, not one-time fixes. Employees have given up cost-of-living increases (in 2009-10, most recently), frozen their pay, taken unpaid furlough days and, in the case of teachers, worked 10 days for free in the past. (See a chart of PPS pay history here.) Those were responses to budget crises – but PPS and other Oregon schools are now confronting a long-term budget crunch as the result of both Oregon’s economic downturn and the tax structure in this state. Neither is turning around in one year. Freezing employee pay is not a long-term, sustainable solution, and neither is cutting the school year.
  • Changes to employee compensation require agreement from the Portland Association of Teachers. The PAT, whose members like other PPS employees did not receive a COLA in 2009-10, is not interested in re-opening the contract.

How are you deciding what to cut?
With one-time fixes off the table, the superintendent and the Portland School Board agreed to make:

  • Central cuts that do not dismantle our overall support structure, although they will hurt our ability to support schools.
  • School cuts that preserve our core academic program, our required offerings and, where possible, the arts.

What about cutting retirement benefits or health care costs?
Again, changes would require agreement from the teachers’ union. Over the years, PPS and its employee unions have moved to limit the growth in health insurance premiums by redesigning plans. All PPS employees also pay part of their monthly premium. Teachers pay 7 percent of costs, and for other employees, the district’s monthly health care premium contribution is capped. PPS, like all other school districts, participates in the Public Employees Retirement System. Unlike many other Oregon governments, however, PPS employees already pay 6 percent of their pay toward their retirement.

Will teaching jobs be cut?
To save $11.6 million, the district would cut roughly 126 teaching positions allocated to schools. These cuts would be made through attrition and layoffs:
.

  • Staffing in grades K to 8 would be reduced by roughly 66 positions. To ensure all students have access to the same core educational program, we will provide specific direction on what schools should cut. We plan to take a uniform cut to common program so that all schools face the same challenges. For example, all schools would cut PE, or enrichments and library staffing. That is a way to try to maintain greater equity and more consistent programs across schools. The loss of PE instruction by specialists could be mitigated by having classroom teachers lead students in physical activity, or through other strategies. The decision about how to approach this will not be acted upon until we receive further clarity from the school board. 
  • High school staffing would also be cut, by roughly 59 positions. That would bring significant increases in class sizes, particularly in core classes. However, we will continue to build a common core program across the system.
  • Academic Priority Zone schools will eliminate their PE programs (if K-8) but their staffing levels will remain the same. These schools are BizTech Academy, Bridger K-8, George Middle School, Jefferson High School, Kelly K-5, King K-8, and Sitton K-5.
What about other cuts impacting schools?
  • Special Education and English as a Second Language services will be cut by $4.6 million. This means reducing new and existing positions. We will provide employees and the community with additional details soon. We have been working hard to strengthen our services to students who need special education services or speak English as a second language. Yet with the extent of the cut that is required, these services, staffed centrally but delivered through our schools and special programs, must face reductions along with general education.
  • Charter schools will have their per-student revenue reduced as the State School Fund drops, based on the rate defined in statute.
  • Community-based alternative schools are paid based on their contracts with PPS; those contracts are not being changed at this time.
  • PPS alternative programs (ACCESS, Alliance, MLC) will face staff reductions.

Can’t you cut more from central administration?
The school district is cutting $3.1 million from central administration and operations support – as many as 25 full-time equivalent (FTE) positions. Central departments are reducing their budgets or staff by 3 to 13 percent. Central administration is 4 percent of the budget, but is taking 8 percent of the cuts.

Are there other possible considerations?

  • PAT: We remain open to conversations with PAT about reopening the contract.
  • State/federal funding: PPS continues to push our state legislative and congressional delegations for additional resources. A special session of the Oregon Legislature is possible later this summer that would focus on prioritizing the budget reductions and possibly add funding (not enough to cover the shortfall) from limited state reserves. Additionally, Congress continues to debate whether to provide $23 billion in additional stimulus funds for education budgets. For Portland, this could bring $16 million in additional funds. It is not certain this provision will make it into the final version of the supplemental spending bill, and again, PPS would have to decide how to spend one-time money as it faces a multi-year budget shortfall.

How can I tell PPS what I think?
The school board will hold a budget hearing at 6:30 p.m. Tuesday, June 29 in the Blanchard Education Service Center, 501 N. Dixon St. You may also send comments or questions by e-mail, to:
schoolboard@pps.net
carolesmith@pps.net
After taking comments, the board hopes to come to agreement on how to balance the budget so the superintendent may move forward with reductions. The school board will vote on the budget amendments at its July 19 regular meeting.

Go to the Budget Documents page.

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