School districts are required to pass their budgets before the end of the school year. But this year, school boards across Oregon had to plan budgets without knowing how much money they even had to work with.

That’s because the state Legislature, which holds the purse strings for much of the money for school districts, has not yet passed the K-12 funding measure House Bill 5015.

Now, things appear to be moving.

Last week, an appropriation of $10.2 billion passed the Oregon House. The bill is now in the Senate, where legislative action is finally set to resume after being stalled for weeks.

School districts and community organizations have received billions in new state and federal funding over the last three years to help bolster summer offerings and keep schools running as kids returned from the pandemic. But three years later, that money is drying up and district leaders lack clear budget numbers from the state. That combination is forcing education leaders to make tough decisions likely to leave some students and families behind.

School district budget cuts affect students — from larger classes to fewer elective courses to a drop in counselors or teachers in school buildings. Because of Oregon’s enrollment-based funding model, cuts can be even deeper in schools that have lost students.

Without a clear budget number from the state, some local districts budgeted more conservatively, using preliminary numbers from Salem. Assuming a $9.9 billion state fund, the Medford School District’s budget for next year includes a reduction of 55 full time equivalent employees, in order to “align with lower enrollment,” officials said.

The Parkrose School District also planned for cuts. In his budget message, Parkrose superintendent Michael Lopes Serrao noted that the small Portland area district had to cut seven staff positions, as well as use one-time dollars to make up a $2.3 million budget shortfall.

Between re-engaging students, helping students recover academically and emotionally from the effects of the pandemic, and implementing initiatives like new reading curricula, schools have a lot of work to do, says Zahava Stadler, project director of Education Funding Equity at New America and formerly of EdBuild, an organization focused on school funding inequities.

“We are at a time when needs have gone up, not down. Students haven’t had an easier time just because we declared the national health emergency over,” Stadler said.

“All these things are new and growing at a time when funding is going to be declining.”

Before 2020, how were Oregon schools funded?

Oregon schools are primarily funded the same way a lot of schools in other states are funded: from state money.

Every two years, Oregon appropriates money to each of the state’s 197 school districts through a formula that uses student enrollment as the basis for how much money schools receive, with extra funding for specific student groups. Students with disabilities, English language learners, and students experiencing homelessness all bring additional money.

But there are a couple of wrinkles that make the way Oregon funds its schools unique, and in some cases, Stadler said, a cause for concern.

One is how the state factors in “teacher experience”. Funding per student gets a boost in districts with more experienced teachers, something Stadler said can shortchange communities serving low-income students, or students in other marginalized groups.

“Layering in this teacher experience adjustment automatically will send more state money to places that are already more advantaged,” Stadler said. “That’s an equity problem baked into the formula [...] that is not standard practice nationally.”

And Oregon schools are more reliant on state funding than other states because of Measure 5, passed by Oregon voters in 1990. Measure 5 limits the ability of school districts to use local property taxes as a funding source.

Paul Thompson, an associate professor of economics at Oregon State University, said the tax limitations leave few local options if the state budget picture changes.

“There’s not this ability to kind of smooth out your expenditures,” Thompson said.

“You can’t go to local taxpayers and say, ‘well, the state slashed our budget, or we’re losing enrollment [...] why don’t we increase a property tax to be able to fund that’ — that’s less of an option here in Oregon than in some other states.”

Oregon districts have a limited ability to ask local taxpayers for help, mostly to fund school construction projects or to help support operations.

In 2019, lawmakers created a new source of funding through the Student Success Act.

The Student Success Act is an ongoing billion-dollar-a-year investment in public schools funded by a tax on businesses. The SSA is broken down into three funding streams: the Student Investment Account, the Early Learning Account, and the Statewide Education Initiatives Account.

School districts have specific ways they can spend the money, with a focus on improving student mental health and academic outcomes for underserved groups like students of color and students with disabilities.

When legislators passed it, they projected an extra $2 billion going to the SSA every biennium. Tax collections started in January 2020.

In March 2020, as the pandemic shuttered schools and businesses alike, businesses that were originally projected to bring in $1 billion annually through the CAT tax were struggling to stay open. In 2020, the tax barely raised $700 million. In 2021, the tax brought in $1.2 billion.

Related: Support for early literacy bill remains strong in Oregon, as questions arise about funding

But also in 2020, the federal government stepped up to help. Typically, districts only receive federal money for serving specific student populations, including students from low-income backgrounds or students learning English.

After COVID-19 shut down schools, Congress sent billions in additional school funding to keep schools operating through the pandemic.

After 2020, what funding did schools receive?

Schools across the country received billions of dollars through three rounds of Elementary and Secondary School Emergency Relief, or ESSER, funding.

In total, Oregon received about $1.6 billion.

The first two rounds of funding came in March 2020, mostly paying for critical items, like laptops and personal protective equipment: things schools needed to protect students and staff from the virus and ensure they were able to keep learning through the pandemic.

With ESSER III, in 2021, Oregon schools have $1 billion to spend by September 2024. A spending dashboard from the Oregon Department of Education shows that a majority of that funding remains unclaimed by school districts, though there is a lag between when districts spend the money and when they submit reimbursement claims to ODE.

Districts have few limits when it comes to ESSER III spending. Some spent funds on tutoring and other recovery efforts. Others spent money on building fixes and improvements to the school environment.

Also in 2021 and 2022, Oregon sent millions of dollars to school districts and community organizations to offer free summer opportunities for students who had been stuck inside doing distance learning.

But as Oregon schools gained federal and state dollars in the last three years, some districts have lost thousands of students – which can lead to a decline in funding.

“Losing students over time is a huge negative,” Thompson said.

Statewide, Oregon has lost more than 60,000 students since the 2019-2020 school year. Some school districts have seen an increase in students in the last year, a possible sign of students returning to school after the pandemic, but statewide enrollment is still down.

And for those districts that continue to lose students, that means funding cuts going forward.

As funding goes away, summer is the first to go

Despite strong support for a third year of summer programming, state legislators are not funding it.

But the demand remains for summer programs.

In a report shared with legislators, OregonASK, a group advocating for after-school and summer programs in Oregon, estimated that “120,000 Oregon youth who participated in summer learning opportunities last year may not have access this year.”

That’s based on almost 200 responses from a survey of community organizations that received grant funding to put on summer programs last year. The same survey found that organizations serving students in rural Oregon counties would have the least access to summer programming, with organizations in Gilliam and Lake counties reporting a 100% decline in youth they’d be able to serve without state funding.

The Oregon Association of Education Service Districts oversaw the distribution of those summer program funds last year. At the beginning of June, the organization said it’s “switching gears” to instead work on securing funding for next summer.

Some school districts are continuing to offer summer programming, a pared-down version compared to the last couple of years. In Portland, some of the students who participated in summer programming have not been invited back.

This summer, Portland Public Schools administrators changed the criteria for attending an academic program to be a “more data-informed, streamlined process”. The new process uses winter testing data, and only students who scored between certain percentiles were invited to the program. Last year, students were recommended to the program by school staff.

Families and staff say the new criteria leave out students who scored the lowest on the tests and benefitted from the program last summer, including students with disabilities and English language learners.

“All of my students who were invited last year, of those students, not one of them is invited this year,” said Lesley Spector, a special education and English as a second language teacher.

“These are some of the students who need the most help and they’re not going to get anything.”

Nicole and Tyler Betchtel have a second grader at Creston Elementary in Southeast Portland. Their daughter, who receives special education services, participated in the Summer Acceleration Academy last year.

“It gave her more opportunity post-pandemic to have more experience in the classroom, to get a leg up on her reading and also her math,” said Nicole Betchtel, who also noted the importance of being “with other students in a social setting since they were isolated behind screens for a year and a half.”

This summer, the incoming third grader is not eligible under the new criteria.

What happens now?

Over the last three years, Thompson said both school and state leaders have hit “pause” on making long-term budget decisions as they’ve had to manage the return to school for students.

“Trying to have a big focus just on getting students back into the classroom, doing recovery so that students are not grade levels behind anymore,” Thompson said.

“Over the next couple years, I think we’ll be back into a more traditional kind of educational environment.”

One concern Stadler and Thompson shared is whether districts will be able to keep new programming or staff without the funds to pay for them.

Stadler said districts will have to “get creative” and make difficult choices.

“Do we keep the new counselor or do we keep the new literacy coach because we can’t afford to keep them both?” Stadler said.

“Our students’ mental health and their reading ability are both really important priorities. Right now, that’s going to be a challenge and it’s going to show up differently for kids in every district.”

At the same time, Thompson notes the ongoing conversation about how Oregon schools prepare students for life after graduation.

“All this talk of how much should be allocated in the most recent state budget to education, I think is around this question of, ‘well, what is enough to keep things at the status quo versus can we provide more of an influx of money to schools to increase the level of education in Oregon?’”

Nationally, Oregon fares poorly when it comes to student achievement and state officials have faced criticism for not setting a high enough bar for graduation. For 2020, the most recent year of data available, per-student funding in Oregon was $12,855, lower than the national average and its neighbors Washington and California, though higher than Idaho.