Portland Public Schools faces budget cuts

Oregon’s largest school district is facing a $30 million deficit and the prospect of cutting some 250 positions districtwide. Interim Superintendent Sandy Husk has presented her proposed budget, which the school board tentatively approved last week. Schools across the state face budget cuts, citing rising costs, limited state funding, the end of federal COVID relief money, heightened student needs since the pandemic and declining student enrollment. Portland also experienced its first-ever teachers strike in the fall, which resulted in a 14.4% cost-of-living adjustment over the next two years. Husk joins us to talk about the budget and what’s ahead for Portland Public Schools, along with Renard Adams, cChief Accountability and Equity Officer for the district.

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. The Portland Public Schools Board has tentatively approved a $2.4 billion budget for next year. The vote to formally adopt the budget is expected on June 11th. It’s a painful budget. It cuts 250 positions district-wide, as a result of a $30 million deficit. For more on what’s being cut and why, I am joined by Interim Superintendent Sandy Husk, and the district’s chief accountability and equity officer, Renard Adams. It’s good to have both of you on the show.

Renard Adams: Thank you for having us.

Sandy Husk: Thank you.

Miller: Renard Adams, first. This overall budget is about $2.4 billion, and that includes a lot of stuff that has nothing to do with paying teachers, for example. That’s the huge overall price tag. It’s a little bit higher than the current year’s budget. So what does it mean to say that you have been facing this $30 million deficit?

Adams: Well, we know that, as a school district we have to be solvent. And as we and our financial staff worked on the budget and the budget projections, they predicted this $30 million gap for this coming year. So, while the budget overall may be a slight increase, it takes into consideration the deficit and that we did have to close.

Miller: The deficit between keeping everything current and the increase in costs, if you were not going to make any cuts.

Adams: Sure, increased compensation. We wanted to reward teachers handsomely, and our other union partners increases because of inflation – things like gas, electricity, all of that cost more right now.

Miller: Sandy Husk, what else, overall, is responsible for this? It’s not just Portland Public Schools. Salem-Keizer, recently, basically made the same tough sets of decisions. What’s driving these deficits?

Husk: I think it’s three things. It’s the increase in costs that Renard said. It’s also declining enrollment across the state. We also had the ending of the federal funds that we refer to as the ESSER funds. Just in general, you put all those things together and you’ve got real problems. There’s also quite a contrast between what the community wants from education and what the state funds for education, so districts are always in this tough decision of figuring out how they can get through that.

Miller: Renard Adams, you were in that same seat many times when we had conversations about the labor negotiations with the Portland Association of Teachers. And at that time, you told us about the fact that you were already facing a budget shortfall. How much worse did it get? I mean, maybe you can just put this in terms of positions, if possible – the positions that had to be cut. How much worse did it get because of things like the cost-of-living adjustments or other aspects of the deals you made with the teachers unions or other unions?

Adams: Well, one of the things we didn’t want to do, Dave, is give the appearance that we’re laying blame anywhere. We wanted to highly compensate our union partners. They do exceptional work. Educators create every other job that we all have in every other position. So we did not do an analysis to say we are facing this many more dollars deficit because of our union costs. What we know is, we also have declining enrollment. So some of our reductions were going to happen anyway without the increased costs because of enrollment continuing to decline.

Miller: But in terms of enrollment declining – meaning, you get less money from the state because a lot of it is per-pupil money, right? But you’re still getting money per pupil. How much does declining enrollment and the less money you’re going to get from the state mean fewer opportunities for students? I can imagine that, as long as there are fewer students but you’re getting less money to educate those fewer students, it all works out. But what does that “back of the envelope” miss?

Husk: There are two other unintended consequences that the legislature did recently. One is Paid Leave Oregon, and the other is the unemployment costs that come to the school district. When the legislature grants those kinds of things, all the employers in the state are impacted, and school districts are very people intensive. So those things had significant impacts on budgets across the whole state of Oregon.

The other thing that I’ve observed in Portland is that we have a really robust curriculum. There are all kinds of offerings through career tech, dual language immersion and a full performing visual arts program. And even when enrollment goes down, you still have to fund those programs if the community expects them, and we think that they should expect them. So all those things compounded really put pressure on the budget.

Miller: In other words, there are some fixed costs that remain, irrespective of the number of students. If you get less money from the state overall, you still have to pay for some of those other things, if you’re gonna be able to provide them.

Adams: If I could add, Dave, one of the things that’s remained constant is the number of buildings we operate. We know we have PPS schools of varying size. We have some larger schools and some very small schools. And we wanted to maintain that programming. We know that families come to love the neighborhood schools, and we’re still maintaining all of those campuses even though enrollment is declining.

Miller: How close did you come to saying, you know what, to make this work, we are going to get rid of some of these fixed costs and we will close some of these smaller schools, or combine elementary schools and middle schools? How close did you all get?

Husk: I think I can answer that with my long, long history of doing this as a superintendent. When times are tough on budgets, you need a really long runway if you’re gonna consider closing schools. The budget was handed to me whatever date I started in February, and a lot of the reduction recommendations were to keep the programs we have, but reduce the number of people supporting them. My opinion, we just didn’t have a long enough runway to look at closing schools for this upcoming school year. I fully expect that those might be conversations that’ll be coming up in the future.

Miller: Because is it fair to say that, as painful as some of these cuts have been – and we’ll turn now more squarely to what they’ll mean – the budget picture actually looks worse in the coming years? Renard Adams, is that still the case?

Adams: That is the case. Next year, for the next budget cycle, we’re projecting a $40 million deficit.

Miller: Alright, let’s turn to the cuts. The proposed budget, or I guess now the tentatively approved one, outlines a reduction of 250 full-time equivalent positions. How many people are going to be fully losing their jobs as opposed to unfilled positions not being hired, or people moving from one role to another? I mean, overall, what exactly is this gonna look like?

Husk: Well, anytime we can save an employee from losing their job, if they’ve got a certification in an area where we’ve got an open teaching position, if it’s an administrator who qualifies for another administrative opening, that’s what HR is gonna focus on first. How can we transfer people? How can we make sure people keep their jobs? We do have some unique positions that may not qualify for another position in the district. I don’t have an exact number, but most of those positions, I’d say about half of them were already filled. So there will be painful decisions that HR will be going through.

Miller: What kinds of positions are going to be cut?

Adams: Well, there’s been a lot of coverage of our library assistants. We cut several positions in the central office that support schools and programs. And, if I could, we really wanna push back against the academy of “school vs central office” because so many of the central office functions support the schools or employ staff who then work in schools in the building. So there wasn’t a cut that we could make that would be more or less painful than another. It’s just tough decisions all around.

Miller: What’s this going to mean for average class sizes? I mean, Sandy Husk, you said last month that elementary classes would still have roughly 23 students, middle school classes about 31 students. Are those numbers still more or less accurate?

Husk: Well, we determine class size based on what we call full-time equivalent – FTE. So we did raise the ratio of one for the elementaries but it comes in a range. You could have class sizes as low as 10-11-12, or as high as 34. It just depends on how the kids are grouped, how big the school is, how much flexibility they have. But the ratio was raised by one for the elementary school.

Miller: What kinds of changes to special education are you envisioning?

Husk: There are some changes to special education that are really following the research, like we had three schools that have been piloting an inclusive model, where students are included in general education as many times during the day as they can be. That has been very successful. This is not related to the budget but there will be some changes where we’re gonna expand the number of schools where that inclusion model is used.

There was also a change in some services, where the staff were working with kids but they were still assigned to the central office. What we’re doing now is we’re increasing the training and moving those people to school-based positions.

Miller: What are the cuts, though, going to mean for individual students who need help with reading, say, or behavioral health?

Adams: One of the things we did in this budget was we looked at some of the things that were working, and we know that PPS is one of two districts in the state whose achievement is rebounded to pre-pandemic levels. Part of that is because we had, in some schools, teacher positions called interventionists. And what we were able to do, looking at the promise of that position and program, was to allocate interventionists to schools that had higher proportions of students who needed support in reading and math. So we’re really excited about the ability to do that even with facing the $30 million budget deficit.

Miller: Overall, is there gonna be a decrease in that kind of help, though? I mean, it’s one thing to say that you’ll be able to focus on the schools that need the most help, but will there be, overall, less help for reading or math in the district?

Adams: There should not be, no.

Miller: Sandy, I’m curious – as you said, you took over in February after the previous superintendent stepped down. It was pretty clear, the budget picture was pretty clear to everybody at that point. You’d already presided over really challenging budget situations and cuts when you were in charge of Salem-Keizer Schools during the great recession. Was there any part of you that said, “I don’t want to do this again”? I don’t want to come over, and in an interim way, just be in charge of cuts again.

Husk: I don’t know if it was a matter of thinking about what I wanted to do. It was thinking about what I should and could do. I feel deeply that this state really needs leadership in education, and I feel like I have enough energy left to commit to a five to six-month period as an interim. I’m not interested in coming back full-time, which was another requirement that the board had. And I felt like it was something I could and should do for Portland Public and for the state of Oregon. I’ve lived here since 2006 and I’m really committed to being a good citizen and a good leader here into the future.

Miller: Renard, one change last week is that $1.8 million was added back to the Racial Equity and Social Justice contract budget. That funds programs provided by SCI, Self Enhancement, Inc. and others. As of last week, it wasn’t clear where exactly that money was going to come from. Is there more clarity on that right now?

Adams: There’s not at the moment. The financial team is working on where that money will come from.

Miller:  What I had seen – and Sandy Husk, I think this is something that you’d said at the board meeting – is that it’s possible it’ll come from the “Rainy Day Fund,” which, there had been a plan, there still currently is a plan, that is not supposed to go below 5% of the budget. But I think you said that if it needs to go below 5% for this, then you’ll just sort of change your own rules.

If you could do that for this program, why not just do it so that, I don’t know, a couple of dozen more teachers also wouldn’t lose their jobs? How do you think about that Rainy Day Fund and what it could or couldn’t be used for?

Husk: Well, it was not my recommendation that we do it. But my recommendation was – and again, I don’t vote on these, I just make the recommendation – if we’re going to put this $1.8 million back in, and that’s what was approved, then it should come from the reserves. Those reserves should stay at 5%. But in a system this large, it won’t be much below 5% if that exception is made.

Miller: I want to turn to the larger picture because you’d started by talking about state funding. If you were a lobbyist – and on some level, even though you’re not officially [a lobbyist], a superintendent uses their bully pulpit to some extent to talk to lawmakers – what would you tell them right now?

It’s worth saying this because, as a reminder to listeners, when we were having a lot of conversations about the ongoing union negotiations, some Portland area lawmakers said, “Wait a minute, folks, you asked us for a record amount of money, we gave it to you. Don’t complain to us now.” That’s one of the things that some number of lawmakers are already on the record as saying. What would you say back to lawmakers who say, “We’ve given you more money than you’ve ever had”?

Husk: The money that they gave was targeted specifically for the Student Success Act. But looking at the Quality Education Model, that model is very old. It was determined quite a while ago that that was the minimum of what the community members expected in this state, and that’s never been fully funded.

The current service level also has huge problems. I would say that this is a fragile time for Oregon. That the nation, the world, came through a two-year disruption for support for our young people, and young people are the future of the economy. They’re the future of a productive citizenship. They’re the future of academics and faith-based leadership, and we need to invest in them. We need to have serious conversations about what it takes to make that kind of a productive investment in them and not look at the last biennium or two bienniums before. This is an ongoing dialogue that requires really strong leadership. And that’s another reason why I said I would take this role.

Miller: Renard Adams, do you have a specific ask for lawmakers right now for the next session?

Adams: Well, I started my career as a 1:1 aide, working with a student with disabilities, before I went on to become a middle school special educator. And one of the things that surprised me in my time here since I arrived in Oregon, is this cap on special education funding. And it would be amazing to me if our lawmakers could consider removing that cap, or raising it, so that we would receive more funds for our students with disabilities. As the current budget is built, the special education costs, they encroach upon the general fund, they don’t pay for all the special education needs. So the more funding we could possibly receive regarding special education, the more breathing room we’d have in the general and operating funds of the district.

Miller: Renard Adams and Sandy Husk, thanks very much.

Adams: Thank you.

Husk: Thank you.

Miller: Renard Adams is chief accounting and equity officer for Portland Public Schools. Sandy Husk is the interim superintendent of PPS.

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