Budget Update and State Revenue Forecast
December 4, 2023 - The month of November was dominated by talk about the inadequacy of state funding for K-12 education in Oregon. It was a primary reason cited by Portland Public Schools as they navigated negotiations with their teachers’ union, and also by Salem-Kaiser as it announced SKPS would be enacting $30 million in reductions immediately.
School funding is a very complex issue, so it’s not surprising that it is one where solutions can be a bit elusive. Governor Kotek has committed to deeply studying and bringing more transparency to how Oregon funds schools in the coming year, which is welcome news.
In the meantime, we have created a six-page document with graphs and narrative content that highlights some of the key features of Oregon’s funding for schools over time, how HSD spends its money, our current costs, and the various ways we demonstrate both fiscal responsibility and stewardship of taxpayer dollars. (Find this and more information on the Budget Matters page of our website.)
We do not currently anticipate any mid-year reductions to our budget in 2023-24, and the State’s December Economic and Revenue Forecast supports that belief. That said, costs for our district continue to escalate and we will be keeping that in mind as we develop a balanced budget for the 2024-25 school year next spring.
Legislators again received positive financial news, as the Forecast showed another surge in revenue that is projected to generate an additional $343.5 million in net general fund and lottery resources for the 2023-25 biennium. That said, the State’s revenue outlook appears to have stabilized. The revenue boom seen during the 2021 tax year is unlikely to be repeated, with collections expected to revert back to their long-term trends. Traditional gains in General Fund collections are expected to resume in the 2025-27 biennium and beyond. (Source: Josh Lerner, Oregon Office of Economic Analysis)
As we look ahead to the short Legislative Session in 2024, we are hopeful that resources will be allocated to summer learning programs, which have proven to be immensely helpful to HSD students as we continue to recover from the pandemic and work to ensure students have the supports they need to be successful in school.
Actualización sobre el presupuesto y pronóstico de ingresos estatales
Durante el mes de noviembre, se destacaron las conversaciones sobre la insuficiencia de financiamiento estatal para la educación de los grados K-12 en Oregón. Fue una de las razones principales citadas por Portland Public Schools mientras llevaban a cabo las negociaciones con su sindicato de maestros, y también por Salem-Kaiser cuando anunció que SKPS implementaría reducciones de $30 millones de manera inmediata.
La financiación escolar es un tema muy complejo, por lo que no sorprende que las soluciones puedan ser un poco difíciles de alcanzar. La gobernadora Kotek se ha comprometido a estudiar en profundidad y aportar más transparencia a la forma en que Oregón financiará a las escuelas durante el próximo año, lo cual es una buena noticia.
Mientras tanto, hemos creado un documento de seis páginas con gráficos y contenido narrativo que destaca algunas de las características clave del financiamiento para las escuelas en Oregón a lo largo del tiempo, la manera en que HSD utiliza los fondos, nuestros costos actuales y las diversas formas en que demostramos tanto la responsabilidad fiscal como la administración responsable del dinero de los contribuyentes. (Puede encontrar esta y más información en la página de Asuntos presupuestarios de nuestro sitio web).
Actualmente, no anticipamos reducciones presupuestarias durante la mitad del año para el bienio 2023-25, y el Pronóstico Económico y de Ingresos de diciembre del Estado respalda esta afirmación. Dicho esto, los costos para nuestro distrito continúan aumentando y lo tendremos en cuenta a medida que desarrollemos un presupuesto equilibrado para el año escolar 2024-25 durante la próxima primavera.
Los legisladores nuevamente recibieron noticias financieras positivas, ya que el pronóstico mostró otro aumento en los ingresos que se proyecta generará $343.5 millones adicionales en recursos netos del fondo general y de la lotería para el bienio 2023-25. Dicho esto, las perspectivas de ingresos del estado parecen haberse estabilizado. Es poco probable que se repita el auge de ingresos observado durante el año fiscal 2021 y se espera que las recaudaciones vuelvan a sus tendencias de largo plazo. Se prevé que las ganancias tradicionales en las recaudaciones del fondo general se reanuden en el bienio 2025-27 y en adelante. (Fuente: Josh Lerner, Oficina de Análisis Económico de Oregón)
De cara a la breve sesión legislativa de 2024, tenemos la esperanza de que se asignen recursos a los programas de aprendizaje de verano, los cuales han demostrado ser de gran ayuda para los estudiantes de HSD mientras continuamos recuperándonos de la pandemia y trabajando para asegurarnos de que los estudiantes reciban el apoyo que necesitan para tener éxito en la escuela.
HSD Earns Meritorious Budget Award
October 9, 2023 - HSD has earned a Meritorious Budget Award (MBA) from the Association of School Business Officials International (ASBO) for excellence in the preparation and issuance of our budget for 2023-24.
ASBO International’s MBA and introductory Pathway to the MBA programs promote and recognize excellence in school budget presentation. Program participation enhances school business officials’ skills in developing, analyzing, and presenting a school system budget. Participants submit their budget documents to a panel of school financial professionals who review the materials for compliance with the MBA Criteria Checklist and other requirements and provide expert feedback that districts can use to improve their budget documents.
Districts that meet the stringent program requirements may earn either the MBA or Pathway to the MBA (Pathway). Pathway is an introductory program that allows districts to ease into full MBA compliance.
This is the second year in a row HSD has earned the MBA, after having first met the criteria for the Pathway to the MBA in 2021-22. Congratulations and way to go to our Business Office team!
HSD obtiene el reconocimiento Meritorious Budget Award
HSD ha obtenido un reconocimiento llamado Meritorious Budget Award (MBA) de Association of School Business Officials International (ASBO) por su excelencia en la preparación y asignación de nuestro presupuesto para el 2023-24.
El reconocimiento MBA y el programa introductorio llamado Pathway to the MBA promueven y reconocen la excelencia en la presentación de los presupuestos escolares. La participación en el programa mejora las destrezas de los funcionarios de finanzas escolares para desarrollar, analizar y presentar un presupuesto del sistema escolar. Los participantes envían sus documentos presupuestarios a un panel de profesionales en finanzas escolares que revisan los materiales para comprobar el cumplimiento de la lista de verificación de criterios de MBA y otros requisitos, y proporcionan comentarios de expertos que los distritos pueden utilizar para mejorar sus documentos presupuestarios.
Los distritos que cumplan con los rigurosos requisitos del programa pueden obtener un reconocimiento MBA o Pathway to the MBA (Pathway). Pathway es un programa introductorio que permite a los distritos adaptarse gradualmente al cumplimiento de los requisitos del MBA en su totalidad.
Este es el segundo año consecutivo que HSD ha obtenido un reconocimiento MBA, después de haber cumplido por primera vez con los criterios del programa Pathway to the MBA durante el 2021-22. ¡Felicitaciones a nuestro equipo de la Oficina de Finanzas, así se hace!
Budget and State Revenue Update
September 11, 2023 - On Sunday, Jun. 25 legislative leaders closed a session that was unprecedented for many reasons: a new Governor; over one-third of state lawmakers new to their positions; a record-breaking economic and revenue forecast; a walkout that lasted more than six weeks, bringing the Senate chamber to a standstill; and thousands of introduced bills.
Earlier in the spring, HSD had developed and adopted its 2023-24 budget assuming the legislature would approve state-level K-12 funding of $10.2 billion - the amount needed to meet our Current Service Level (CSL) - but also having a contingency plan in the event of a lesser allocation to minimize the impact to students and families.
Thanks to the tireless work of advocates and their collaborative efforts to engage and inform legislators, by session’s end the State School Fund (SSF) did stand at $10.2 billion for the 2023-25 biennium. Full funding for the Student Success and High School Success grants was also secured.
Oregon’s quarterly State Revenue Forecast for September was released on Wednesday, Aug. 30 and showed continued stable growth along with inflationary cooling. The near-term looks to be a post-pandemic “soft landing” for the state, with record revenues projected and reserves up. Although this does not change the 2023-25 appropriation to the SSF, the projections affirm the position of legislators to invest in Oregon’s PK-12 systems.
Therefore, thanks to good planning and strong stewardship, there are no operational reductions forecasted for the 2023-25 biennium. That said, there are a few revenue areas to monitor for impact. Most importantly, because the SSF - which provides our general fund operational budget - is driven by student enrollment, the Oct. 1 Enrollment Report will inform actuals vs. projections and the amount of money HSD will receive this year.
Actualización sobre el presupuesto y los ingresos estatales
El domingo, 25 de junio los líderes legislativos cerraron una sesión sin precedentes por muchas razones: una nueva gobernadora; más de un tercio de los legisladores estatales son nuevos en sus cargos; un pronóstico económico y de ingresos sin precedentes; un paro que duró más de seis semanas y que inmovilizó a la Cámara del Senado; además de miles de proyectos de ley presentados.
A principios de la primavera, HSD había desarrollado y adoptado su presupuesto para 2023-24 asumiendo que la legislatura aprobaría fondos a nivel estatal de $10.2 millardos para la educación de los grados K-12, la cantidad necesaria para cumplir con nuestro Nivel de Servicio Actual (CSL, por sus siglas en inglés), pero también contando con un plan de contingencia en caso de una asignación menor para minimizar el impacto para los estudiantes y las familias.
Gracias al trabajo incansable de los promotores y sus esfuerzos colaborativos para involucrar e informar a los legisladores, al final de la sesión, el Fondo Escolar Estatal (SSF, por sus siglas en inglés) ascendía a $10.2 millardos para el bienio 2023-25. También se aseguró la financiación total para las subvenciones para el éxito estudiantil y para el éxito a nivel preparatoria
El pronóstico trimestral de ingresos estatales de Oregón para septiembre se publicó el miércoles, 30 de agosto y mostró un crecimiento estable y continuo junto con un descenso inflacionario. En el corto plazo parece ser un «aterrizaje suave» tras la pandemia para el estado, con ingresos récord proyectados y reservas en aumento. Aunque esto no cambia la asignación del SSF para 2023-25, las proyecciones afirman la posición de los legisladores de invertir en los sistemas de educación de los grados PK-12 de Oregón.
Por lo tanto, gracias a una buena planificación y una sólida gestión, no se prevén reducciones operativas para el bienio 2023-25. Dicho esto, existen algunas áreas de ingresos que se deben monitorear para determinar el impacto. Lo más importante es que debido a que el SSF, el cual proporciona nuestro fondo general del presupuesto operativo, está impulsado por la inscripción estudiantil, el informe sobre las inscripciones del 1 de octubre brindará información de los datos reales frente a las proyecciones y la cantidad de dinero que HSD recibirá este año.
Estén atentos a la publicación de Noticias de la Semana y a la página de Asuntos presupuestarios disponibles en nuestro sitio web para obtener actualizaciones durante todo el año, además puede comunicarse con el oficial financiero del distrito, Michelle Morrison, si tiene preguntas al respecto.
Oregon Revenue Forecast
May 22, 2023 - On Wednesday, May 17 members of the House and Senate Revenue Committees received the June Economic and Revenue forecast, which showed another surge in tax collections.
The state’s budget position has improved significantly, with a projected additional $2.32 billion in general fund and lottery resources available to spend in the 2023-25 biennium. This increase is due to a huge last-minute surge in revenue for the 2021-23 biennium that will be rolled over into the 2023-25 budget.
Net general fund and lottery revenues are up a combined $8.53 billion for the 2021-23 biennium since the Legislature adjourned in 2021 (up about $1.9 billion from the March 2023 forecast). Just like the last several forecasts, this results in record projected personal and corporate kickers and significant budget reserves for the state.
The next personal kicker (to be paid in 2024) will top $5.54 billion (up from $3.93 billion in March 2023).
The corporate kicker is now projected to be about $1.82 billion (up from about $300 million).
State reserve funds at the end of the 2021-23 biennium are projected to include $708 million in the Education Stability Fund and $1.35 billion in the Rainy Day Fund.
All case reserves will likely be rolled over into the beginning balance for the 2023-25 biennium - that total projected beginning balance is approximately $7 billion (up from $4.6 billion).
The Corporate Activity Tax (CAT) revenues that fund the Student Success Act showed a projected increase of $175.7 million for the 2023-25 biennium, which brings the projected total for the 2023-25 biennium to $2.779 billion.
This forecast presents an opportunity for Legislators to appropriate $10.3 billion to the State School Fund for the 2023-25 biennium, which has been determined as the amount needed to meet Current Service Level in every school district across the state. As a reminder, at the $9.9 billion level - included in the Governor’s Recommended Budget and the Co-Chairs’ Budget Framework - HSD would experience a funding shortfall of $10.2 million over the biennium.
Final budget decisions are coming in the next few weeks, so now is the time to make your voice heard in Salem! Visit the Budget Matters page of our website for our funding advocacy leave-behind sheet, a list of elected officials and their contact information, and the link to an interactive map to see which legislators represent you.
Pronóstico de ingresos de Oregón
El miércoles, 17 de mayo los miembros de los comités de ingresos de la Cámara y el Senado recibieron el pronóstico económico y de ingresos del mes de junio, el cual mostró otro aumento en la recaudación de impuestos.
La situación presupuestaria del estado ha mejorado significativamente, con una proyección adicional de $2.32 millardos en fondos generales y recursos de la Lotería disponibles para gastar en el bienio 2023-25. Este incremento se debe a un enorme aumento de última hora en los ingresos para el bienio 2021-23, los cuales se transferirán al presupuesto 2023-25.
Los ingresos netos del Fondo General y de la Lotería aumentaron $8.53 millardos combinados para el bienio 2021-23 desde que la Legislatura levantó la sesión en 2021 (cerca de $1.9 millardos por encima del pronóstico de marzo de 2023). Al igual que los últimos pronósticos, esto da como resultado un récord en la bonificación de impuestos personales y corporativos proyectados, así como importantes reservas presupuestarias para el estado.
La próxima bonificación de impuestos personales (que se pagará en 2024) alcanzará los $5.54 millardos (frente a $3.93 millardos en marzo de 2023).
Ahora se proyecta que la bonificación de impuestos corporativos sea de alrededor de $1.82 millardos (frente a $300 millones).
Se proyecta que los fondos de reserva estatales al final del bienio 2021-23 incluyan $708 millones en el Fondo de Estabilidad Educativa y $1.35 millardos en el Fondo de Reserva «Rainy Day Fund».
Es probable que todas las reservas se transfieran al saldo inicial para el bienio 2023-25, ese saldo inicial total proyectado es de aproximadamente $7 millardos (frente a $4.6 millardos).
Los ingresos del Impuesto a la Actividad Corporativa (CAT, por sus siglas en inglés) que financian la Ley de Éxito Estudiantil mostraron un aumento proyectado de $175.7 millones para el bienio 2023-25, lo que eleva el total proyectado para el bienio 2023-25 a $2.779 millardos.
Este pronóstico presenta una oportunidad para que los legisladores asignen $10.3 millardos al Fondo Escolar Estatal para el bienio 2023-25, que se ha determinado como la cantidad necesaria para cumplir con el nivel de servicio actual en todos los distritos escolares del estado. Como recordatorio, en el nivel de $9.9 millardos, incluido en el presupuesto recomendado por el gobernador y el marco presupuestario de los copresidentes, HSD experimentaría un déficit de financiación de $10.2 millones durante el bienio.
Las decisiones presupuestarias finales llegarán en las próximas semanas, ¡así que ahora es el momento de hacer que su voz se escuche en Salem! Visite la página de Asuntos presupuestarios de nuestro sitio web para consultar el documento Apoyo para el financiamiento de 2023, una lista de los oficiales electos y su información de contacto, así como el enlace a un mapa interactivo para saber qué legisladores lo representan.
Co-Chairs Budget Framework
April 3, 2023 - On Friday, March 24 the Co-Chairs of the Joint Committee on Ways and Means released their Budget Framework for the 2023-25 biennium. The framework cites four guiding principles for investments supporting the most critical issues facing Oregon: K-12 education, housing and homelessness, health care, and behavioral care.
Despite this acknowledgement, the recommended State School Fund (SSF) allocation aligns with the Governor’s recommendation of $9.9 billion, which is $400 million short of what districts across the state are advocating for to maintain current services.
If this amount is upheld by the legislature, HSD would experience a funding shortfall of $10.2 million over the biennium. While we could absorb this shortfall with remaining ESSER funds, that is not a sustainable or available strategy for future biennia. For context, a shortfall of this size is the equivalent of the following over a two-year period:
78 teaching positions OR
136 support positions OR
An increase to the ratio of licensed staff to students (average class size increase) of 3.92 OR
10.1 school days
The District’s 2023-24 Proposed Budget is designed to appropriate at Current Service Level with various spending plans if the SSF is less than needed. A management plan is in place to staff at lower levels of funding, and adjustments may occur in the second year of the biennium to provide stability of service to students.
Efforts to enact state-level initiatives like Oregon Paid Family Leave and additional instructional and operational requirements, as well as to recruit and retain quality staff, and provide stable services to students, all hinge on available resources.
The most recent State Revenue Forecast indicates Oregon has the resources to support K-12 education at the Current Service Level of $10.3 billion in the 2023-25 biennium, so advocacy toward increasing the allocation to that dollar amount will continue. Your ongoing support is very much appreciated.
Marco presupuestario de los copresidentes
El viernes, 24 de marzo, los copresidentes del Comité Conjunto de Medios y Arbitrios publicaron su marco presupuestario para el bienio 2023-25. El marco cita cuatro principios rectores para las inversiones que respaldan los problemas más críticos que enfrenta el Estado de Oregón: educación K-12, vivienda y personas sin hogar, atención médica y atención conductual.
A pesar de este reconocimiento, la asignación recomendada para el Fondo Escolar Estatal (SSF, por sus siglas en inglés) se alinea con la recomendación de la gobernadora de $9.9 millardos, lo que implica $400 millones menos de lo que los distritos de todo el estado están promoviendo para mantener el nivel de servicio actual.
Si la legislatura confirma esta cantidad, HSD experimentaría un déficit financiero de $10.2 millones durante el bienio. Si bien podríamos absorber este déficit con los fondos restantes de ESSER, esa no es una estrategia sustentable o disponible para los futuros bienios. Como contexto, un déficit de estas dimensiones es el equivalente de lo siguiente durante un período de dos años:
78 puestos para maestros o
136 puestos de personal de apoyo o
Un aumento en la proporción de personal con licencia por estudiante (aumento promedio del tamaño de la clase) de 3.92 o
10.1 días escolares
El presupuesto propuesto por el distrito para 2023-24 está diseñado para adecuarse al nivel de servicio actual con varios planes de gastos si SSF es menor de lo necesario. Existe un plan de gestión para el personal con niveles más bajos de financiación y es posible que se realicen ajustes durante el segundo año del bienio para brindar estabilidad en el servicio a los estudiantes.
Los esfuerzos para promulgar iniciativas a nivel estatal como el Permiso Pagado de Oregón para familias y los requisitos operativos y de instrucción adicionales, así como para contratar y retener personal de calidad y brindar servicios estables a los estudiantes, dependen de los recursos disponibles.
El Pronóstico de Ingresos Estatales más reciente indica que Oregón cuenta con los recursos para apoyar la educación K-12 en el nivel de servicio actual de $10.3 millardos para el bienio 2023-25, por lo que la abogacía para el aumento de la asignación a esa cantidad de dólares continuará. Su apoyo continuo es enormemente apreciado.
March Revenue Forecast
March 6, 2023 - Oregon’s March Economic and Revenue Forecast was released on Wednesday, Feb. 22. The forecast showed another surge in tax collections and an improvement in the state’s budget position with a projected additional $714.6 million in general fund and lottery resources available to spend in the 2023-25 biennium.
Net general fund and lottery revenues are up a combined $6.653 billion for the 2021-23 biennium since the legislature adjourned in 2021, resulting in record projected personal and corporate kickers and significant budget reserves for the state. The forecast now projects the personal kicker will top $3.93 billion (to be credited to taxpayers when they file their returns in 2024), and the corporate kicker to top $1.5 billion (required to be spent on K-12 education).
Although the additional revenue for the 2021-23 biennium is good news, the appropriation to the current State School Fund (SSF) will not be increased (no new funds for HSD in this school year). The District is operating within adopted appropriations for the current year, and is creating the 2023-24 Proposed Budget Documents to be shared at the Budget Committee meeting on Apr. 25, 2023.
The required current service level for schools in Oregon is $10.3 billion, and advocates will be sharing this message throughout the legislative session. For HSD, remaining temporary ESSER III and American Rescue Plan funds may be invested into additional services to students or leveraged to bridge any budget gaps over the two-year funding cycle (2023-25). This strategy will continue to stabilize operational systems and services to students and support the Strategic Plan’s priority areas.
Our only indication of where the State School Fund may land for 2023-25 is in the Governor’s budget proposal, which earmarked $9.9 billion for K-12 education. The Governor’s Budget is historically seen as a “starting point” from which the legislature begins its discussion on how to allocate funds for the coming two-year period. Her proposal had relied upon a diversion of $625 million in payments to the state’s reserve accounts (Education Stability Fund and Rainy Day Fund) to balance her budget. This may no longer be necessary, however, with the forecast’s identification of additional general fund and lottery resources available in 2023-25. We will continue to watch the legislative session for additional information about the State’s 2023-25 budget over the coming weeks.
Stay tuned to the Budget Matters page of our website for additional resources and ongoing updates.
Governor’s 2023-25 Budget Proposal
February 6, 2023 - Governor Kotek released her budget proposal for the 2023-25 biennium on Tuesday, Jan. 31. The Governor’s Budget is historically seen as a “starting point” from which the legislature begins its discussion on how to allocate funds for the coming two-year period. Her earmark of $9.9 billion for K-12 education is significantly higher than the Legislative Fiscal Office’s recommendation of $9.5 billion, but still leaves HSD short of what would be needed to maintain actual service level.
Along with many other large districts in the state, HSD is advocating for a statewide biennial allocation of $10.3 billion to K-12 education. At that level, we could maintain current services over the next two years, while still being able to invest our remaining pandemic recovery (ESSER) funds as they were intended - to support students who are struggling the most.
If the legislature upholds the $9.9 billion State School Fund (SSF) allocation, HSD would experience a funding shortfall of $10.2 million over the biennium. While we could absorb this shortfall with remaining ESSER funds, that is not a sustainable or available strategy for future biennia.
See the Budget Matters page of our website for additional information, resources, and updates on the budget development process throughout the spring.
Budget Updates and Legislative Priorities
December 21, 2022 - On Wednesday, Nov. 16 members of the Oregon House and Senate Revenue Committees received the December Economic and Revenue Forecast, which showed another surge in tax collections for the current 2021-23 biennium. Net General Fund and Lottery revenues are up a combined $6.15 billion since the Legislature adjourned in 2021.
Interestingly enough, though, this will not be a huge help to the 2023-25 biennium because of the state’s kicker law. A majority of the overage will be returned to taxpayers with a personal kicker estimated to top $3.68 billion, and a corporate kicker projected to exceed $1.3 billion.
In contrast to the current biennium, projections for the 2023-25 biennium show revenue growth slowing and economists predicting a mild recession. This is troubling news for K-12 education, which will be competing with other sectors for its biennial budget allocation.
The Department of Administrative Services (DAS) has indicated they will recommend a “starting point budget” of $9.5 billion for K-12 education statewide. If this were the level of funding approved by the legislature, it would represent a shortfall of $23.8 million in the Hillsboro School District.
We will be advocating for a statewide allocation of between $10.2 billion and $10.83 billion, which would allow us to meet current service level. At $10.2 billion we would have to continue using two-thirds of our Student Investment Account (SIA) dollars to support eligible expenses from the General Fund as opposed to using those funds for the enhancement of services to the students who need them most; at $10.83 billion, we could meet current service level and use SIA funds for their intended purpose.
At their meeting on Tuesday, Dec. 6 the School Board adopted a slate of legislative priorities (español)and approved a funding advocacy leave-behind sheet. We invite students, staff, families, and community patrons to join us in advocating for adequate and stable funding for K-12 at the state level.
In other budget-related news, the District’s 2021-22 Annual Comprehensive Financial Report qualified for the Government Finance Officers Association’s (GFOA) Certificate of Achievement for Excellence in Financial Reporting. Congratulations to our Business Office staff for once again preparing such a high-quality report.
Actualizaciones presupuestarias y prioridades legislativas
El miércoles, 16 de noviembre, los miembros de los comités de ingresos de la Cámara de Representantes y el Senado de Oregón recibieron el pronóstico económico y de ingresos correspondiente al mes de diciembre, el cual mostró otro aumento en la recaudación de impuestos para el bienio actual 2021-23. Los ingresos netos combinados del Fondo General y de la Lotería aumentaron $6,150 millones desde que la legislatura levantó la sesión en 2021.
Sin embargo, es interesante señalar que esto no será de gran ayuda para el bienio 2023-25 debido a la ley estatal que otorga un reembolso de los impuestos a los contribuyentes (kicker law). La mayoría del excedente se devolverá a los contribuyentes mediante una bonificación personal estimada que alcanzará $3,680 millones y una bonificación corporativa proyectada de más de $1,300 millones.
En contraste con el bienio actual, las proyecciones para el bienio 2023-25 muestran una desaceleración del crecimiento de los ingresos y los economistas pronostican una recesión leve. Esta es una noticia preocupante para la educación de los grados K-12, que competirá con otros sectores por su asignación presupuestaria bienal.
El Departamento de Servicios Administrativos (DAS, por sus siglas en inglés) ha indicado que recomendará «un presupuesto inicial» de $9,500 millones para la educación de los grados K-12 a nivel estatal. Si este fuera el nivel de financiamiento aprobado por la legislatura, representaría un déficit de $23.8 millones para el Distrito Escolar de Hillsboro.
Abogaremos por una asignación a nivel estatal de entre $10,200 millones y $10,830 millones, lo que nos permitiría cumplir con el nivel de servicio actual. Con $10,200 millones, tendríamos que continuar usando dos tercios de los fondos de nuestra Cuenta de Inversión Estudiantil (SIA, por sus siglas en inglés) para respaldar los gastos elegibles del Fondo General en lugar de usar esos fondos para mejorar los servicios que se ofrecen a los estudiantes más necesitados, con $10,830 millones, podríamos cubrir las necesidades del nivel de servicio actual y utilizar los fondos de SIA para el propósito que le corresponde.
En la reunión del martes, 6 de diciembre, la Mesa Directiva definió una lista de prioridades legislativas y aprobó un documento de apoyo para el financiamiento. Invitamos a los estudiantes, los miembros del personal, las familias y los patrocinadores de la comunidad a unirse a nosotros para abogar por un financiamiento adecuado y estable para la educación de los grados K-12 a nivel estatal.
En otras noticias relacionadas con el presupuesto, el Informe Financiero Integral Anual del Distrito de 2021-22 fue elegible para el Certificado de Logro por la Excelencia en Informes Financieros de la Asociación de Oficiales de Finanzas del Gobierno (GFOA, por sus siglas en inglés). Felicitaciones a nuestro personal de la Oficina Comercial por preparar una vez más un informe de tan alta calidad.
Meritorious Budget Award
September 5, 2022 - The Association of School Business Officials (ASBO) International has recognized HSD for excellence in budget presentation with the Meritorious Budget Award (MBA) for the 2022-23 budget year.
ASBO International’s MBA and introductory Pathway to the MBA programs promote and recognize excellence in school budget presentation. Program participation enhances school business officials’ skills in developing, analyzing, and presenting a school system budget. Participants submit their budget documents to a panel of school financial professionals who review the materials for compliance with the MBA Criteria Checklist and other requirements and provide expert feedback that districts can use to improve their budget documents.
Districts that meet the stringent program requirements may earn either the MBA or Pathway to the MBA (Pathway). Pathway is an introductory program that allows districts to ease into full MBA compliance. HSD received the Pathway Award for the 2021-22 budget year.
Key changes made to the District’s budget report over the past two years that allowed HSD to earn the MBA for 2022-23 include the following:
Reorganized the document into four sections: Executive Summary, Organizational Section; Financial Section; and Informational Section.
Included graphical representations of various data.
Included an additional year of actuals for revenues and expenditures, and also included three-year forecasts.
Included new information around taxable property, tax rates and collections; student enrollment history; personnel resource allocations; and a glossary of terms and acronyms.
The Review Team had this to say, in summary: “The budget is an excellent document that includes a wealth of information in graphical and narrative form. It is user-friendly for the average taxpayer with abundant data to meet varied readers’ needs. Many components are suitable as standalone documents. The Review Team congratulates the District on a successful submission for the Meritorious Budget Award.”
Board Adopts 2022-23 Budget
June 21, 2022 - At their meeting on Tuesday, June 21, the Board adopted the District's budget for the 2022-23 school year. Below is information from the Superintendent's budget message, which describes some of the major components and factors that went into its development.
The 2022-23 school year is the second of the 2021-23 biennium and therefore our funding level is already established. The 2021 Legislative Session set the State School Fund at $9.3 billion, which is $300 million short of what would have been needed to meet the Hillsboro School District’s Actual Service Level. With our district receiving approximately 3.4 percent of every dollar appropriated by the State, the insufficient funding equates to a shortfall in HSD of just over $10 million, or approximately $5 million for each year of the biennium.
Fortunately, there are other funding sources that have been made available to districts through legislative action and federal pandemic relief that will help us weather the coming year without having to make significant reductions to staffing levels or programming. In addition, the unique situation caused by COVID-19 in the 2020-21 school year led to a significant decrease in expenditures versus budget expectations, which I will describe below.
The Student Investment Account (SIA), which receives fifty percent of the revenue generated by the Student Success Act (SSA), is fully funded for the second year in a row. Two-thirds of SIA funding is used for services that would have been eliminated from the 2021-22 and 2022-23 budget cycles due to insufficient state-level allocation, while one-third is used for investments based on stakeholder feedback and student needs as identified in the Accelerated Learning Plan.
The High School Success Plan (Measure 98) will also be fully funded for the second year in a row. The High School Success Plan initiative provides $800 per high school student for schools to establish or expand career and technical education programs, college-level educational opportunities, and dropout prevention strategies. The Hillsboro School District has used its Measure 98 money to hire graduation coaches and student support and wellness counselors, as well as expand career-related learning courses and access to postsecondary opportunities.
Over the course of the COVID-19 pandemic, the federal government has made support and recovery funds available to individuals, nonprofits, businesses, municipalities, and school districts.
School district support has come through the Elementary and Secondary School Emergency Relief (ESSER) Fund, established as part of the Education Stabilization Fund in the CARES Act. There have been three rounds of ESSER funding made available to school districts as reimbursements for eligible expenses up to the allocation amount, which is based upon the formula used to determine a district’s Title IA distribution under the Elementary and Secondary Education Act (ESEA).
HSD’s allocations are as follows:
ESSER III/ARP (American Rescue Plan)
Due to the modified service models of Comprehensive Distance Learning and Hybrid in the 2020-21 school year, the District did not access ESSER Funds last year. Instead, we have carried the funds forward and allocated them on an annual basis as part of the regular budget development cycle, mapped backwards from their expiration date and targeting both operational and student needs.
These funds are considered temporary in nature, and the District is intentionally targeting them to provide temporary supplemental services for learning acceleration, safety and health, and stability in operations over the full length of time available.
The disruptions and uncertainty caused by the COVID-19 pandemic had a significant impact on our students, staff, and families. Oregon schools had to spend approximately three-quarters of the 2020-21 school year in a Comprehensive Distance Learning (CDL) model, and the last quarter in a hybrid (in-person and remote) model. While far from ideal for learning delivery, there were operational savings realized as a result. The District’s participation in workshare and reassignment of staff that did not have work available during CDL, coupled with savings on substitutes, temporary staff, fuel, utilities, and supplies, led to the avoidance of $11,027,440 in expenditures versus what was budgeted. We also received special relief funds from the State ($431,201) and Washington County ($1,430,472) for a total of $1,861,673 in additional revenue.
Because school districts are required to have a balanced budget where total resources equal total expenditures, we are not allowed to carry forward one-time resources beyond what is budgeted to achieve a zero sum balance. Therefore, the District will be reestablishing an Internal Service Fund into which $8.5 million of the surplus funds will be transferred and made available for future expenses.
The District has established Internal Service Funds before, most recently in 2013-14 when money was set aside in a PERS Reserve Fund to offset pension cost increases. The fund was utilized within five fiscal years and exhausted in 2018-19.
This current iteration of the Internal Service Fund will not be designated to a specific purpose, but rather may be appropriated as transfers to the General Fund by the Board during future budget development periods for uses such as Actual Service Level stabilization, technology replacement, PERS reserve, Strategic Plan initiatives, or curriculum adoptions.
The 2021-22 school year has been a bit of a transition year between what could arguably be considered as a “typical” educational experience and the CDL/Hybrid model of 2020-21. We anticipate the 2022-23 school year to represent a more complete return to normalcy and hope to see a stabilization of our enrollment and student attendance. The Hillsboro School District, along with other districts across the state, has seen a decline in enrollment over the past two years due to the combined effects of pandemic uncertainty and decreased birth rates. We have based our 2022-23 budget on current enrollment projections and Actual Service Level projections, and will closely monitor enrollment trends to predict our budget needs for the 2023-24 school year and beyond.
As we enter the fall of 2022, advocacy efforts for the 2023 Legislative Session will increase to ensure that state revenues maintain pace with Actual Service Level cost projections for the 2023-25 biennium. We invite you to stay informed and join us in those advocacy efforts as we work hard to ensure our students have access to all of the support, resources, and opportunities they need and deserve to pursue their dreams.
April 25, 2022 - As we wrap up Earth Month, we wanted to celebrate the work we have been able to do under the 2017 Hillsboro School District Bond to not only make environmentally-sustainable enhancements to our new and existing buildings, but also to secure sizable energy incentives in the process.
As the project list was being developed, the bond planning team identified many items across the district that needed to be replaced or upgraded, particularly with energy-efficient options. They also looked at new construction projects for areas where more sustainable choices could be made. The project choices made were not only better for the environment, but would also allow us to get money back - therefore making the projects more cost-effective, helping the bond dollars to go farther, and investing in our buildings’ energy efficiency for the long term.
Under programs managed by the Oregon Department of Energy and Energy Trust of Oregon, HSD has secured the following incentives thus far:
- 2017 - $52,398.47
- 2018 - $48,703.98
- 2019 - $1,754,113.68
- 2020 - $1,486,260.52
- 2021 - $1,302,684
- Total: $4,644,160.70
The bond promise was that our project list would return at least $4.3 million to the District’s general fund, and we are pleased to report that we have already exceeded expectations by more than $300,000.
One of the programs under which we receive incentives is Senate Bill 1149, or the Public Purpose Charge Schools Program. This program directs Portland General Electric and Pacific Power to collect a charge from their customers equal to three percent of total revenues. The first ten percent of those funds collected go to school districts to complete energy audits and implement energy efficiency measures such as new windows, upgraded heating and cooling systems, building envelope improvements, energy efficient lighting, domestic hot water systems, and so on.
HSD’s SB1149 program has now been extended until January 2036, so we will continue accruing funds under this program as we implement additional energy-efficient projects through the remainder of the bond (2023) and beyond. Learn more about our bond progress in the District’s bi-annual newsletter, A Look Inside Hillsboro Schools, coming to your mailbox in early May.
State Revenue Forecast and PERS Rates
February 14, 2022 - The quarterly State Economic Forecast was released on Wednesday, Feb. 9, and showed another record level of income for Oregon. Net General Fund and Lottery revenues are up a combined $1.173 billion since the December forecast, a robust growth of 4 percent in just three months. Also since that previous forecast, the projected personal kicker has almost doubled to $964.2 million and the projected corporate kicker has grown by over 150 percent to $633.8 million. With the state being just a third of the way through the 2021-23 biennial budget period, those numbers are expected to grow significantly in future forecasts.
And while the continued increase is positive for the state’s coffers, districts will not see additional revenue during the 2021-23 biennium without an appropriation change at the state level. Legislators and lobbyists alike are challenged to recognize the impact of temporary ESSER and ARP (pandemic relief) funds versus consistent and stable support for PK-12 education from the state’s general fund.
Work has already begun to prepare for advocacy in the 2023 legislative session around “Actual Service Level” support from the state, and mitigation of the future funding cliff as these pandemic relief funds dry up after the 2022-23 school year. In addition, declining enrollment continues to be a concern for the General Fund, High School Success (Measure 98), and Student Investment Account (SIA) resources.
Other positive news was recently received when pension rate information for the 2023-25 biennium was shared at the Public Employees Retirement System (PERS) Board meeting on Monday, Jan. 31. Strong investment returns have reduced the expected employer rate increase for 2023-25 to 0.9 percentage points from early estimates of 2.9 percentage points. This would represent an increase in cost to the District of approximately $900,000, assuming all other variables remain constant. Those returns have also lowered the state’s estimated unfunded actuarial liability from $28 billion to $20 billion.
Learn more in these documents: Legislative Revenue Office Forecast Summary, Office of Economic Analysis Presentation to the Legislative Revenue Committees.
HSD Receives Pathway to Meritorious Budget Award
September 27, 2021 - The Association of School Business Officials (ASBO) International has recognized HSD with a Pathway to the Meritorious Budget Award (MBA) for the 2021-22 budget year.
ASBO International’s MBA and Pathway to the MBA promote and recognize best budget presentation practices in school districts. Participants submit their applications and budget documents to a panel of school financial professionals who review the materials for compliance with the MBA Criteria Checklist and other requirements and provide expert feedback that districts can use to improve their budget documents.
Districts that successfully demonstrate they have met the necessary program requirements may earn either the MBA or Pathway to the MBA, an introductory program that allows districts to ease into full MBA compliance.
“Districts that apply to the MBA or Pathway to the MBA programs recognize the importance of presenting a quality, easy-to-understand budget internally and to the community,” ASBO International Executive Director David J. Lewis explains. “Participating in the MBA and Pathway programs provides districts with important tools and resources they need to communicate the district’s goals and objectives clearly and illustrates their commitment to adhering to nationally recognized budget presentation standards.”
Molly Barrie, Director of ASBO International Recognition Programs, adds: “This is the district’s first year receiving the award and it is a true reflection of its commitment to fiscal integrity.”
HSD logra obtener un reconocimiento Pathway to the Meritorious Budget Award
Association of School Business Officials (ASBO) International le ha otorgado a HSD un reconocimiento Pathway to the Meritorious Budget Award (MBA) para el año presupuestario 2021-22.
MBA y Pathway to the MBA de ASBO International promueven y reconocen las mejores prácticas de presentación de presupuestos en los distritos escolares. Los participantes envían sus solicitudes y documentos presupuestarios a un panel de profesionales financieros escolares que revisan los materiales para verificar el cumplimiento de la lista de verificación de criterios de MBA y otros requisitos, y proporcionan comentarios de expertos que los distritos escolares pueden utilizar para mejorar sus documentos presupuestarios.
Los distritos escolares que demuestren exitosamente que han cumplido con los requisitos necesarios del programa pueden obtener un reconocimiento MBA o Pathway to the MBA, un programa introductorio que permite que los distritos logren el cumplimiento total de los requisitos de MBA.
«Los distritos escolares que completan solicitudes para los programas MBA o Pathway to the MBA reconocen la importancia de presentar un presupuesto de calidad que sea fácil de entender tanto internamente como por la comunidad», explica el director ejecutivo internacional de ASBO, David J. Lewis. «La participación en los programas MBA y Pathway proporciona a los distritos escolares importantes herramientas y recursos que necesitan para comunicar las metas y los objetivos del distrito claramente e ilustra su compromiso de adherirse a los estándares de presentación de presupuestos reconocidos a nivel nacional».
Molly Barrie, directora de los Programas de Reconocimiento Internacional de ASBO, agrega: «Este es el primer año que el distrito recibe el reconocimiento y es un fiel reflejo de su compromiso con la integridad fiscal».
State Revenue Forecast
September 6, 2021 - In late August, the State received its September Revenue Forecast to close out the 2019-21 biennium. Despite the ongoing challenges of the pandemic, financial news is positive and reserve accounts to protect K-12 education are strong.
Below is a synopsis and interpretation of the forecast from Morgan Allen, Deputy Executive Director of Policy and Advocacy for the Coalition of Oregon School Administrators (COSA).
Legislators again received positive financial news as the state officially closes the books on the 2019-21 biennium. The September Economic and Revenue Forecast showed another surge in tax collections will generate the largest personal kicker in Oregon history. Based on final projections for the just finished biennium, Oregon’s kicker law will return almost $1.9 billion to individual taxpayers in 2022 when they file their 2021 taxes. The average kicker tax credit is projected to be $850 in 2022; the median kicker credit will be $420 based on tax returns with adjusted gross income between $35,000 and $40,000. Meanwhile, the corporate kicker grew to almost $847 million. Corporate kicker funds must be spent on K-12 education but will not result in an increase to the overall State School Fund appropriation of $9.3 billion without the Legislature changing the total appropriation, which is very unlikely.
A few key economic takeaways were shared today by Josh Lerner in the Oregon Office of Economic Analysis:
- “The economic outlook remains bright. Strong household incomes, boosted considerably by federal aid during the pandemic, are the underlying driver…Firms today are trying to staff up as quickly as possible to meet this increasing demand. The actual number of jobs created this year will be the largest on record in Oregon. The state’s labor market is now expected to regain all of its lost jobs by next summer, or one quarter sooner than in the previous forecast.”
- “…Firms are struggling with supply chains and a tight labor market. Wages are rising quickly to attract and retain workers. Prices are increasing as demand continues to outstrip supply. On top of this the current delta wave of the pandemic complicates the immediate term outlook. What matters most economically are shutdowns. A modest pullback in consumer spending in a few categories will not lead to mass layoffs. If anything, any slowing in spending today will likely turn into stronger gains in coming quarters.”
- “…The current recovery will be faster, more complete, and more inclusive than recent experiences coming out of the tech and housing bubbles. As some of the pandemic-specific challenges fade, the underlying economy is on solid footing due to the strength of corporate and household balance sheets.”
For school superintendents and administrators that have lived through boom and bust economic times and have had to deal with significant budget uncertainty in the past, there continues to be good news as well. The state’s reserve accounts (Education Stability Fund, Rainy Day Fund, and Cash Reserves) are currently projected to reach $3.28 billion during the 2021-23 biennium. This is equivalent to 13.9% of the General Fund Budget. And with the continued stability of the Corporate Activity Tax funding the Student Success Act, it is safe to say that Oregon is in a very strong position to weather even a significant economic downturn.
The forecast also shows that projected net General Fund and Lottery resources have grown by slightly over $1 billion for the 21-23 biennium since the June 2021 forecast. We believe one of the major takeaways from today’s forecast is that districts can budget with confidence for the next two school years and be assured that even if the most dire economic conditions come to fruition, the Legislature will have healthy reserves they can use to protect K-12 budgets from cuts.
June State Revenue Forecast
May 31, 2021 - The June State Revenue Forecast was released on Wednesday, May 19. And while the forecast was overwhelmingly positive in terms of state income and outlook, the impact to K-12 and the State School Fund is still to be determined by legislatively-set appropriations...
The June State Revenue Forecast was released by the Legislative Revenue Office on Wednesday, May 19. And while the forecast was overwhelmingly positive in terms of state income and outlook, the impact to K-12 and the State School Fund is still to be determined by legislatively-set appropriations.
- The forecast indicates a significant increase in net General Fund and Lottery resources of $2.207 billion since the March forecast (which includes a $1.087 billion rollover from the 19-21 biennium).
- The state is now projected to have $4.2 billion in reserve funds available (General Fund, Education Stability Fund, and Rainy Day Fund). This is equivalent to 18.2% of the state’s General Fund revenue and up about $1 billion from the March Forecast.
- The Corporate Activity Tax, which funds the Student Success Act, is projected to gross over $2.368 billion during the 21-23 biennium. This is up $76.1 million from the March Forecast and should allow for full funding of the Student Investment Account (SIA), which is estimated to pay out $500 million per year to districts across the state.
- By comparison, districts received $150 million in SIA funds in the 2020-21 school year.
- A personal kicker of over $1 billion is projected to be paid in 2021-23, and a corporate kicker of $640.8 million, which is dedicated to K-12 education, is also projected this biennium.
This was described as an economic jump that has not occurred in Oregon since the 1980s and wonderful news in the near and extended periods for all sectors of government and community stakeholders. Now, more than ever, the state has the resources available to reach the $9.6 billion current service level (CSL) for the State School Fund in 2021-23. However, the current funding bill moving through the Legislature is at $9.3 billion - still $300 million short of what it would take to maintain pre-pandemic service levels for students. Continued advocacy is critical for reaching CSL in this and future years.
March Revenue Forecast and Legislative Co-Chairs’ Guiding Principles
March 1, 2021 - Oregon’s first quarter state revenue forecast was released late on Wednesday, Feb. 24. Generally, the news was positive and there have been no major negative impacts on the revenue outlook for the 2019-21 or 2021-23 biennia. This strengthening of Oregon’s financial position provides leverage for the K-12 current service level ask of $9.6 billion (see details below). A fully-funded operational budget would allow the District to direct Student Investment Act resources into priorities shared by the community, rather than shifting expenses from one fund to another to maintain the same level of service (class size, caseload, programs, instructional time). Federal relief funds will be targeted to temporary expenditures related to reopening and additional supports for students to recover from challenges during the public health emergency.
Key Takeaways from the Oregon Office of Economic Analysis Presentation:
- “Economy proving more resilient as well. Income excluding direct federal aid has returned to pre-pandemic levels.”
- “Lower income households continue to struggle.”
- “Growth stalled over the winter as expected, but the state is set for rapid improvement.”
- “To date, revenue losses in the current recession pale in comparison to Oregon’s recent experiences.”
- “Job losses over the past year match the worst of the Great Recession yet revenue declines are much less severe.”
The Co-Chairs of the Ways and Means committee have released guiding principles that will inform their approach to the 2021-23 budgeting process. Here are a few highlights:
- Immediate focus will be on the most critical programs and services, and recovery efforts.
- Centering on Oregon’s children and equitable investments.
- Long-term budget focused on stability and sustainability.
- Evaluation of current programs and services.
The Confederation of School Administrators (COSA), in partnership with school leaders across the state, have been meeting with the Co-Chairs and legislative leadership to request a $9.6 billion investment in the State School Fund for 2021-23. This is a truer representation of K12’s “pre-COVID” service level than the Legislative Fiscal Office’s calculations of the budgetary needs of school districts at $8.997 billion (less than our current appropriation of $9.0 billion). We are hoping to see the Co-Chairs’ budget by mid-March.
Follow the links below for additional details.
January 18, 2021 - Oregon’s elected officials will convene on Tuesday, Jan. 19, for the 2021 Legislative Session. During the session, they will determine the state’s biennial budget and will consider thousands of changes to current law. Our School Board adopted a slate of education priorities for the Legislative Session and prepared a video summarizing key points. HSD patrons are encouraged to get involved.
Dec. 21 Special Session Results
January 4, 2021 - The Oregon Legislature held a one-day special session on Monday, Dec. 21, that resulted in $50 million for schools to support a return to in-person learning, and limitations to COVID liability.
The $50 million appropriation is in addition to $28 million that was previously appropriated by the Governor for technology and internet assistance for students and schools, as well as approximately $109 million in federal CARES Act funds that were distributed to school districts earlier in 2020.
House Bill 4402 addressed COVID liability for schools and districts. In the summer of 2020, school leaders around the country learned they could not purchase insurance for lawsuits stemming from COVID-19 - something that has added to the challenges of resuming in-person learning.
This bill states that schools and districts cannot be held liable for people becoming infected with COVID-19 as long as they are following state’s and Oregon Health Authority’s guidelines.
Read more about the limitations of COVID liability legislation in this article from the Oregon School Boards Association.
Governor Releases 2021-23 Budget Proposal
December 14, 2020 - On Tuesday, Dec. 1, Governor Kate Brown released the full details of her proposed budget for the 2021-23 biennium.
Overall, the budget prioritizes investments in early learning and full distribution of Student Success Act dollars. For K-12 specifically, the major shortfall is in the State School Fund, and the Governor acknowledges that her proposed investment is insufficient to meet the needs of school districts.
By not calling it a “Current Service Level” (CSL) appropriation, the door is open to critical conversations regarding reduced services and advocacy for additional resources. The Governor urged communication to federal-level decision makers to settle on and administer another federal relief program.
Key items specific to HSD’s 2021-23 budget:
- State School Fund = $9.1 billion (includes $200 million from the Education Stability Fund)
- The projected biennial shortfall in HSD at this level is $17.5 million
- To meet the pre-COVID service level in HSD, that allocation would need to be approximately $9.6 billion
- Student Investment Account = $778.8 million, additional support for Summer Programs for Title I eligible schools
- $4.5 million of that is encumbered for eligible expenses that were reduced from the District’s General Fund in 2020-21
- This would result in approximately $13.5 million per year to HSD
- Full Funding of Measure 98/High School Success
- Expansion of early learning programs and Early Intervention services
- Grant opportunities for K-12 Facilities and Connectivity
Adding to the complexity of financial forecasting are the COVID enrollment migrations in
Hillsboro and across the state. All of the resources above are tied to student enrollment and
demographics. In HSD, we are engaging in the activities below as a conservative approach
to the upcoming budget cycle:
- Utilizing the Oregon Employment Department Work Share program for a limited number of specific positions experiencing a reduced workload
- Implementing safety protocols and providing resources to keep staff healthy and working
- Closely monitoring hourly wages and redesigning work when possible within contracted hours
- Offering additional review and support to Administrators for “discretionary” spending
- Careful administration of federal CARES Act grants (Child Care, ESSER, GEER/CDL)
- Continued tracking of “but for COVID” expenses
- Leveraging state negotiated contracts (technology, supplies, PPE)
- Reviewing and revising standard District service contracts to include pandemic contingency clauses
- Leveraging partnerships and pursuing opportunities that arise on behalf of schools (e.g. the Hillsboro Schools Foundation has raised $132,000 in support of students, families, and schools since the beginning of the pandemic).
We continue to collaborate with other state, regional, and district leaders regarding finance and
best practices for serving students during Comprehensive Distance Learning and in planning to return to in-person instruction.
The Governor’s Budget is the starting point for legislative budget discussions. The final state budget will be determined by the co-chairs of the Joint Ways and Means Committee during the 2021 Legislative Session. Please watch for additional updates as we move toward the regular budget development period.
State Revenue Forecast Highlights
November 23, 2020 - Oregon’s December 2020 Economic and Revenue Forecast was released on Wednesday, Nov. 18. The projections generally indicate stable revenues and a slow but steady economic recovery. Though the forecast doesn’t take into account the “2 Week Freeze,” statistics show that unemployment has dropped to 6.9% in Oregon. Here are a few key takeaways:
- Revenues for the 2019-21 biennium were up across the board slightly compared to numbers released in September. This is good news in terms of closing out the current two-year budget cycle and reinforces the stability in school funding for the remainder of the 2020-21 school year. The state has reestablished reserves to mitigate a significant shortfall.
- At the close of the 2019-21 biennium, the state is now projected to have $3.163 Billion in reserve funds available (General Fund, Education Stability Fund, and Rainy Day Fund), which is equivalent to 14.9% of the state’s General Fund revenue.
- Despite stabilization of the 2019-21 budget and significant reserves, the state is still facing a budget deficit in the 2021-23 biennium. Although we won’t know the exact number until the Governor proposes her budget, due to a modest increase in General Fund and Lottery resources, the projected state budget deficit is below $1 Billion for the biennium.
- Currently unknown is what impact the two week “freeze” will have on Oregon’s economy going forward. Governor Brown released a statement reacting to the forecast that included the following: "Today’s forecast projects relatively stable state revenues," said Governor Brown. "While this provides some sense of relief in uncertain times, we know that the sacrifices Oregon's businesses are making right now to prevent the rapid community spread of COVID-19 will not be reflected until the next revenue forecast is released in January.”
Corporate Activity Tax and Student Success Act:
- The Corporate Activity Tax, which funds the Student Success Act, is projected to gross over $2.236 billion during the 2021-23 biennium, up $15.1 million from the September Forecast. The allocation to the Student Investment Account (SIA) is estimated to be $750 million over the next two years, or about $375 million per year. By comparison, districts are receiving $150 million in the 20-21 school year. In Hillsboro, this is about $13 million per year for the 2021-23 biennium.
House Speaker Calls for a December Special Session:
- In response to today’s forecast, the House Speaker released the following statement: “The COVID-19 pandemic is raging like never before in Oregon. Our economic recovery is fully dependent on getting this virus under control. As the state’s budget situation has stabilized and since Congress is unlikely to pass another relief package this year, I urge the Governor to declare a catastrophic disaster so the legislature can convene a remote special session in December. We need to utilize some portion of the state’s reserves as soon as possible to help struggling Oregonians and small businesses through the winter months. I am particularly interested in seeing the state spend $100 million to keep Oregonians housed and stabilize the rental market as the pandemic continues into 2021.”
Many Oregonians Are Still Struggling With Economic Uncertainty:
- From the Confederation of Oregon Superintendents (COSA) to Superintendents in September and it still holds true today:
Despite the good news today, we would note that there is still a lot of uncertainty and potential volatility in the future. We are still in a global pandemic and have yet to fully comprehend the economic impacts of recent wildfires. If you dig deeper into the forecast, the results of income inequality are clear and you can see that the economic impacts are disproportionately affecting people of color and low-income Oregonians who are struggling in this economy – which means many of the families and students we serve in our schools are hurting. And without a further relief package from Congress to help stabilize the economy, the future is bleak for many businesses and communities in our state.
The nation and state is in a historically unique state of uncertainty. Please watch for relevant information as it becomes available.
Additional Links of Interest:
Budget Committee Members Sought
October 21, 2020 - The 14-member Budget Committee comprises the District’s seven elected School Board members, and seven members appointed by the Board. Appointed members serve for three years.
Budget Committee meetings are held approximately once each month, usually in the evenings, from November through June, at the District Administration Center. The number and length of the meetings may vary.
Eligibility for the Budget Committee:
- Live within the Hillsboro School District
- Be a registered voter
- Not be an officer or employee of the Hillsboro School District
Applications are due November 20, 2020 and may be returned to the Board Secretary Rose Roman, Hillsboro School District, 3083 NE 49th Place #200, Hillsboro, OR 97124. Applications may be faxed to 503-844-1781 or emailed to email@example.com.
District Refinances Outstanding Bond Debt to Save Taxpayers Money
October 12, 2020 - On Tuesday, Oct. 6, 2020, the Hillsboro School District took advantage of an opportunity to refinance $40.4 million in outstanding debt from the 2006 capital construction bond, which will save District taxpayers more than $1.4 million.
The 2006 Bond Series A and B had already been refinanced once in 2012, with a projected savings yield of $5,293,985 (4.53% of proceeds). Current market conditions and extremely low interest rates created a second refinancing opportunity for the balance of the series. Total estimated savings is $1,430,743 (3.55%) net present value for the remaining balance of $40,365,000 (out of the original $169 million).
Distrito refinancia la deuda pendiente del bono para ahorrar dinero a los contribuyentes
El martes, 6 de octubre de 2020, el Distrito Escolar de Hillsboro aprovechó una oportunidad para refinanciar $40.4 millones en deuda pendiente del bono de construcción de capital de 2006, lo que ahorrará a los contribuyentes del Distrito más de $1.4 millones.
Las series A y B del bono de 2006, ya habían sido refinanciadas una vez en 2012, con un ahorro proyectado de $5,293,985 (4.53% de los ingresos). Las condiciones actuales del mercado y las tasas de interés extremadamente bajas crearon una segunda oportunidad de refinanciamiento para el saldo de las series. El ahorro total estimado es de $1,430,743 (3.55%) del valor neto actual para el saldo restante de $40,365,000 (de los $169 millones originales).
Los ahorros se reflejarán en una tasa de recaudación de impuestos más baja para los propietarios de inmuebles.
State Revenue Forecast and PERS Rates
September 28, 2020 - The September 2020 Economic and Revenue Forecast was released on Wednesday, Sept. 23 - the second state-level forecast issued since the pandemic began. The forecast is generally positive, yet also complex given the unique pandemic impacts, tax collection cycles, drought, wildfires, and other challenges of the state. Here are a few takeaways:
- Revenues are up significantly from the June 2020 Forecast, released on May 20, but longer-term forecasts are still lower than pre-COVID projections. As a result, the state continues to face budget shortfalls in future biennia, although the shortfalls are significantly smaller than they were estimated to be in the spring.
- In the short term, revenue for the 2019-21 biennium has rebounded and is projected to increase by about $2 billion. This effectively wipes out the initial damage predicted from the COVID pandemic. Based on new information, funding for the 2020-21 school year (State School Fund, Measure 98, and Student Investment Account) may not be reduced, and the state can restore reserves.
- At the close of the 2019-21 biennium, the state is now projected to have over $3 billion in reserve funds available (General Fund, Education Stability Fund, and Rainy Day Fund). This is equivalent to 14.6 percent of the state’s General Fund revenue.
- Despite the stabilization of the 2019-21 budget and significant state reserves, the state is still likely facing a budget deficit in the 2021-23 biennium (the forecast only focused on revenues, not on anticipated expenses). Governor Brown released a statement reacting to the forecast, which included the following quote: “While revenue projections are up for this biennium, the revenue forecast did not balance our upcoming budget, and we must tread lightly.”
Corporate Activities Tax and Student Success Act:
- The Corporate Activities Tax, which funds the Student Success Act (SSA), is projected to net over $2.2 billion during the 2021-23 biennium. This should mean significant funding increases for the Student Investment Account (SIA) and other programs in the 2021-22 and 2022-23 school years.
Overall, the forecast was a significant improvement over the prior one due to the timing of tax collections (July extension for filers), federal aid for businesses and individuals, and adjusted impact estimates due to additional experience with COVID-19. There was not enough data available to gauge the impact of recent wildfire damage to property and income tax revenues at this time.
2021-23 PERS Rates:
- Pension rates for the 2021-23 biennium have been posted in advance of the Oct. 2, 2020, PERS Board Meeting.
- The 2017-19 investment returns combined with the one-time impacts of SB1049 legislative reforms have yielded a decrease in rates from 2019-21 to 2021-23.
- The most impactful reform strategy recalculated the unfunded liability over a longer period of time, creating short-term relief.
- HSD’s total pension obligations in 2021-23 will be 25.58% for Tier 1 and Tier 2 employees and 21.74% for OPSRP employees, representing a decrease of 5.01 percent and 2.97 percent, respectively, versus 2019-21 rates.
Additional information will be provided as the 2021-22 budget development cycle begins.
June 1, 2020 - The Oregon Office of Economic Analysis provided the June 2020 Economic and Revenue Forecast to the Senate Interim Committee on Finance and Revenue on Wednesday, May 20.
Their presentation opened with “Uncertainty abounds. Our office is translating a public health crisis into an economic and revenue forecast. Two key health assumptions in the baseline: 1) social distancing policies begin lifting this summer (Phase 1 reopening is just a first step); and 2) health crisis wanes by end of 2021 due to some available treatment or vaccine.”
Economists Mark McMullen and Josh Lehner made very clear the fragile nature of the forecast given the complexities of the pandemic, including the financial impact of extended social distancing and recovery patterns (no resurgence of COVID-19 and herd immunity by the end of 2021).
Analysts had been predicting a shortfall of $1 to $3 billion, and although the general and lottery fund revenues for the 2019-21 biennium have decreased by $2.164 billion since the March forecast, they are only down $1.49 billion from the Close of Session estimate. This provides some hope that the impact to statewide K-12 budgets in the 2020-21 school year won’t be quite as severe as we feared.
Preliminary estimates were that the State School Fund (SSF) would be reduced by $656 million (approximately $23 million in reductions for HSD) for the 2019-21 biennium (all impact being felt in 2020-21); however, there is now a possibility that the reduction will be closer to $428 million (approximately $15 million in reductions for HSD).
Several decisions have yet to be made by the Legislature before we will know the actual level of reductions. Some actions that could alleviate or reduce these reductions would be the delivery of a portion of the Student Investment Account (SIA) funds that were anticipated in 2020-21 as a result of Corporate Activity Tax (CAT) collections authorized by the Student Success Act (SSA). The CAT is projected to generate approximately $1.2 billion for the biennium, down $400 million from the original $1.6 billion estimate. After the statutory contribution to the SSF, there is approximately $557 million to fund the SSA initiatives of the SIA, full funding of Measure 98 (High School Success Fund), and Early Learning.
Our leadership team is developing tiered reduction plans based on the following scenarios: no SIA; no SIA and a 5% reduction to current service level; and no SIA and a 10% reduction to our current service level. We are centering around district values and the needs of students given the extended closure and potential restrictions around reopening in the fall. All eyes are focused on students as more detailed resource information becomes available.
Important Budget Update from Superintendent Scott
May 7, 2020
Dear Hillsboro School District Staff and Families,
Many of you may be wondering about the state of the District’s budget as a result of the coronavirus pandemic. Indeed, there is a strong possibility that Oregon will experience a $1-$3 billion shortfall in its collection of personal income, property, and business taxes - a dollar amount that represents approximately 5-15 percent of the state’s budget. More will be known when the next quarterly revenue report is released on Wednesday, May 20. At that time, there will most likely be a special session of the State Legislature called to determine how to absorb and mitigate the shortfall.
Governor Kate Brown has already asked state-funded agencies to prepare budgets that represent 8.5 percent reductions to previously allocated funds, which is the extent of her budgetary authority. The Legislature can determine whether to lower or increase that amount, or to make it variable between agencies.
Separate but related to that is the question around Student Success Act (SSA) collections. The Governor has already allowed for delayed payments without penalty to some smaller business that would be subject to the tax, and it is unclear what the ultimate fate of the tax will be this year. We were anticipating just over $16 million in Student Investment Account (SIA) funds - SIA represents 50 percent of the SSA collections - to support the lowering of class sizes, mental health support, extended learning opportunities, and enriched education in HSD. We were also anticipating full funding of Measure 98, which was to be supported by the portion of SSA funds designated Statewide Education Initiatives (SEI). At this moment, all SIA and SEI funds are in question.
There are some funding sources that could specifically support education. Two separate funding streams from the federal CARES Act will come to Oregon: one is estimated at $121 million and is intended to flow through to school districts. Because HSD represents approximately 3.5 percent of all students in the State of Oregon, we could reasonably assume to receive approximately $4.2 million. The other is estimated at $32.6 million and is intended to help state-funded agencies recoup the costs they’ve incurred as a direct result of the coronavirus pandemic. We have been tracking these costs and hope to receive the maximum amount of reimbursement to which we are entitled (as much as $1.1 million).
Other sources of support are the Education Stability Fund and the state’s reserves. Whether or not and to what extent those funds are accessed will be a decision of the legislature.
These economic factors will mainly impact us in the 2020-21 school year. If education is expected to make reductions on the order of 8.5 percent, for example, that would feel like a 17 percent reduction in funds for the 2020-21 school year. The reason for that is because our budget is allocated on a biennial basis and we have almost completed the first year of the current biennium - all reductions will have to be absorbed in that second year. For HSD, a reduction of 8.5 percent to the State School Fund means we would have to reduce $23 million from our budget.
Simply for the purpose of giving that number relevance, not that we would manage reductions this way, a $23 million reduction is the equivalent of 190 teachers or 27 school days.
All of this is meant to provide context for the cost-saving measures we are planning for the remainder of this school year. Anything we can do between now and the fall to save money will save staff members, school days, and programs.
Two of these cost-saving measures are pretty straightforward: we are implementing a spending freeze effective immediately; and we are implementing a hiring freeze - with the exception of hard-to-fill-positions - effective immediately.
The third cost-saving measure is fairly unique. As you may have heard, Portland Public Schools (PPS) has announced they will be implementing one furlough day for all eligible employees beginning this week and lasting through July 31, 2020. They will be accessing a state program called Work Share and money available through the federal CARES Act to make this a workable solution for their district and their employees. The Work Share program is in place in 26 states and has been available for several decades. It was initially implemented as an employee protection program for the manufacturing industry by allowing employers to furlough employees for one to two days per week rather than lay them off. The employer was able to save money as they weathered cyclical demand, and the employee retained their job and was able to collect unemployment at the same time.
PPS did the groundwork research with the State’s Unemployment Office and with their legal advisors to see if this program would work for an educational entity and the answer was “yes.” Many other districts in the Metro area and around the state were watching this process with interest because it not only represented a way to save significant money in a short period of time, but is also a way to hold employees harmless.
The program works this way:
- The employer files for its entire employee base* and continues to do so each week, moving people in and out of the program as necessary based on their eligibility. (*Some employees are not eligible for this program because they have not worked for the district for at least six months, are on a leave of absence, or are retiring.)
- The employee fills out a one-time two-page document indicating their preference for a check or direct deposit, tax withholding, etc.
- The employee’s work week is reduced by 20 percent. If they normally work 40 hours per week, they will now work 32; if they normally work 20 hours per week, they will now work 16.
- The employee will receive their regular pay from the district for 80 percent of their week, and will receive the Work Share unemployment pay for 20 percent of their week. They will also receive $600 per week from the federal CARES Act program currently in place through July 31, 2020.
- The impact of the 20 percent reduction in District pay will not be evident until the June paycheck, at which time the Work Share unemployment benefits should have already begun.
- The employee’s health benefits remain the same.
There are other nuances to the program, but these are the highlights. Hillsboro School District has submitted its application to the State Unemployment Office for participation in this program, and we are hopeful we can implement it for all employee groups by next week.* (*Pending conversations with our non-represented employees, and approval of our unions and the Board.) The furlough day will likely be Fridays, but the more important piece is that each employee reduces their work hours - those hours do not necessarily have to be tied to a particular day. By selecting Fridays as the furlough day, students will have a predictable schedule each week of instruction for four days and a catch-up/research/project day on the fifth day; however, if another day must be selected based on an employee’s/employee group’s work responsibilities, they will work that out with their supervisor.
If we are able to implement furlough days for all employees, we will save approximately $850,000 per week. If we are able to start with all employees by May 15, we will save approximately $4.2 million by July 31, 2020.
Any money we are able to save in this fiscal year will lessen the impact of reductions we will have to make in the 2020-21 school year - protecting more jobs, more school days, and more vital programs for students.
Additional information, including FAQs, will be forthcoming on the HSD Work Share Program webpage.
While the situation is far from ideal, I am hopeful about the measures we can take to be good stewards of our resources now and in the coming year. Thank you very much for your partnership in this effort.
First State Revenue Forecast for 2019-21 Biennium Released
September 6, 2019 - Legislators received positive news as they closed out the books on the 2017-19 biennium. The September Economic and Revenue Forecast, released on Wednesday, Aug. 28, showed another surge in tax collections that will generate the largest personal kicker in Oregon’s history. Based on final projections for the 2017-19 biennium, Oregon’s kicker law will require the return of almost $1.57 billion to taxpayers in 2020 when they file their 2019 taxes. While it will be the largest personal kicker ever in terms of total dollar amount, it will be only the third largest as a percentage of tax liability.
State economists noted that although we’ve experienced the longest period of economic growth and expansion in Oregon’s history over the past several years, there are indications of potential economic slowdown and “warning signs” of a recessionary period. That said, economists also reported to legislators that “…most (economic) indicators are still positive…” and recognized the fact that the majority of economists nationally (66%) are not predicting a recession in the near term.
For school communities that have lived through boom and bust economic times and had significant budget uncertainty in the past, there is some good news. The state’s reserve accounts (Education Stability Fund, Rainy Day Fund, and Cash Reserves) are currently projected to reach $2.58 billion during the 2019-21 biennium (12.2% of the General Fund Budget). The forecast also shows that projected General Fund and Lottery resources have grown $324 million for the 2019-21 biennium since July 1. With the addition of the new revenue stream from the Student Success Act in 2020-21, the state will be in a position to help stabilize K-12 budgets in the event of a significant economic downturn.
Student Success Act Referral Effort Dropped
July 18, 2019 - Late Tuesday, July 16, the Oregonian reported that Oregon Manufacturers and Commerce - the group that had filed a referendum with the state indicating it would seek to block implementation of the taxation portion of HB 3427, the Student Success Act (SSA) - announced it would not be pursuing the referral after all.
The group cited legislative constraints as the reason for dropping the effort, including the passage of SB 116, which moved the date of a potential election to January 21, 2020, from November 3, 2020.
This does not preclude the possibility of other individuals or groups mounting a referral effort, though no other referrendum has yet been filed. Such an effort would require the gathering of nearly 75,000 signatures by Friday, September 27, 2019, to move forward.
It also does not preclude the possibility of Oregon Manufacturers and Commerce or another group taking up the referral effort once the tax is in place. But it now appears almost certain that the business tax will go into effect on January 1, 2020, which is great news for K-12 and other educational initiatives across Oregon.
Plans for the use of SSA funds, which are expected in the 2020-21 school year, are due from districts in November 2019. Plan development includes the involvement of parents, community members, and other stakeholder groups, so please watch for opportunities to participate and provide your feedback.
Budget and Student Success Act Update
June 19, 2019 - On Tuesday, June 4, 2019, Governor Brown signed HB 5016, which set the State School Fund (SSF) for the 2019-21 biennium at $9.0 billion. That funding level is $28 million higher than what we planned for and upon which we built our budget for the 2019-20 school year. Because our district accounts for approximately 3.5% of all students in the state, we will receive approximately $980,000 of those additional funds in the biennium. With 49% coming in 2019-20, that equates to just over $480,000. Rather than earmarking those dollars at this time, our plan is to use the funds to ensure high school Student Success Coaches remain whole, address class size hot spots, and meet other student support needs.
Just over two weeks before she finalized the SSF, Gov. Brown signed HB 3427, which established the Student Success Act (SSA). The SSA calls for a new gross receipts tax on businesses and a reduction of income taxes for the payers in all but the highest of the state’s four tax brackets. The new business tax less reduced income taxes is estimated to generate $2 billion per biennium* to be spent on K-12 and other statewide education initiatives (*$1.6 billion in the 2019-21 biennium due to the delayed implementation of the tax - for more details, please see the May 14 article “House Bill 3427 Heads to Governor’s Desk” below).
Because the SSA passed the House and Senate with a supermajority and was signed by the Governor, it will become law 91 days after the closing of the 2019 Legislative Session and will go into effect on January 1, 2020. Those seeking to repeal the SSA will have 90 days from the Session’s closing to collect at least 75,000 signatures to refer the tax to voters; the group Oregon Manufacturers and Commerce filed a referendum in late May indicating it intends to do just that.
If the required signatures are gathered, the vote would normally take place in November 2020; however, SB 116 seeks to pull that vote up to January of 2020. At the time of this writing, the bill was in a Senate sub-committee of the Joint Ways and Means Committee. The bill is expected to pass both chambers and receive the Governor’s signature.
There would be three main impacts if voters overturned the SSA:
- K-12 schools and other statewide educational initiatives like preschool and Measure 98 for career and college readiness would not receive additional funding for needed programming. The Hillsboro School District had to reduce $9.6 million from its 2019-20 budget and would have to sustain those reductions in 2020-21 and beyond if funding from the SSA did not materialize.
- The $9 billion SSF for 2019-21 counted on $200 million from SSA proceeds; so if that money was not available, schools would have even less money than they planned on for the biennium.
- Only the taxation portion of the SSA would be referred to voters, which would create a scenario where there is no new tax, but there is a reduction to personal income taxes for most payers. That would be a loss to the state on two fronts and could cause further detriment to the SSF.
Stay tuned to this webpage for updates as they are available.
House Bill 3427 Heads to Governor’s Desk
May 14, 2019 - On Monday, May 13, Oregon Senators voted to pass House Bill 3427 - the Student Success Act - by a supermajority of 18 yes, 11 no, 1 excused. That vote, combined with the supermajority passage of the act in the House of 37 yes, 21 no, 2 excused, means that once the Governor signs, which she is expected to do within the next few days, the bill will become law 91 days after the session adjourns.
The only thing that could potentially stop or slow that process would be a successful initiative petition that would refer part or all of the bill to a vote, which remains to be seen.
Assuming the Bill does become law, it is expected to raise approximately $1.6 billion in the 2019-21 biennium, and $2 billion in future biennia. Here is some additional information about how the money is expected to come in and be allocated in the 2019-21 biennium:
- The business tax is projected to raise $1.608 billion in 2019-21. The first collection would likely not take place until the first or second quarter of 2020 (January or April), and it is not anticipated that any disbursements to K-12 education would occur in the 2019-20 school year.
- The bill allows for a “pre-appropriation” of $200 million from the expected new revenue generated by HB3427 to the State School Fund (SSF) in order to get that allocation to the Governor’s recommended level of $8.972 billion (would be reflected in HB5016, the SSF appropriation bill) for the 2019-21 biennium..
- There will also be a loss of funds due to the personal income tax cuts that are part of the bill. Those are estimated to total $423 million in 2019-21.
- That leaves $951.5 million for distribution to the following accounts:
- Early Learning Account: $190.3 million
- Statewide Education Initiative Account: $285.5 million
- Student Investment Account: $475.8 million
Assuming the entire $475.8 million from the Student Investment Account is made available to K-12 education in the 2020-21 school year, HSD could theoretically see up to $16,653,000 in additional funds. If we reversed the 2019-20 school year reductions of $9.6 million, that would leave approximately $7 million for us to reinvest in our system to lower class size, enhance curricular and mental health offerings to students, and increase learning time.
All funds received through the Student Investment Account would be governed by an inclusive public strategic planning process that would include:
- A complete needs assessment;
- Input from district stakeholders (e.g. school employees, students from underserved groups, parents of those students);
- The use of data to enable the district to make equity-based decisions; and
- Analysis of potential academic impact for students, especially in underserved groups.
These plans must be 4-year plans that are submitted to and approved every 2 years by the Oregon Department of Education.
The other direct source of funding to HSD from the Student Success Act would be through the Statewide Education Initiative Account, which should fully fund Measure 98 - the High School Graduation and College and Career Readiness Act of 2016. Measure 98 has been funded at just over half of its intended $800 per high school student since its implementation in the 2017-19 biennium.
In short, the passage of HB3427 is very positive for the Hillsboro School District; however, its benefits will not be seen in the 2019-20 school year. The coming year will be a difficult one for HSD, but we remain, as always, committed to providing students with the best learning experiences possible to prepare them for success throughout their K-12 journey and beyond.
2019-2020 Budget Message from Superintendent Mike Scott
Hillsboro School District 2019-20 Budget Information and Update on HB3427
May 2, 2019 - Superintendent Scott shares important budget information for the 2019-20 school year in this video and slide presentation. Please take a few minutes to review these materials and familiarize yourself with the implications of Legislative action on our budget for next year.
On May 1, 2019, the House passed HB3427, which would establish the Fund for Student Success. That fund is intended to raise approximately $2 billion per biennium in support of K-12 education ($1 billion), Statewide Education Initiatives (including full funding of M98), and Early Learning. They needed 36 votes for a supermajority and they got it.
The bill is now in the Senate and will have its first reading today. If the bill ends up passing the Senate with a supermajority and the Governor signs, it will become law 91 days after the Legislature adjourns. If only a simple majority is achieved, even if the Governor signs it would have to go to the voters because of the tax implications.
Proposed Budget Reductions
April 22, 2019 - At a special session on Tuesday, Apr. 16, the Board and Budget Committee discussed options for managing a projected shortfall of $9.6 million in the 2019-20 school year. The shortfall estimate is based on the Governor’s recommended statewide K-12 allocation of $8.972 billion for the 2019-21 biennium.
Although the Legislature is discussing mechanisms for increasing the K-12 allocation and creating a School Improvement Fund, districts need to solidify budget assumptions in the spring to determine staffing and meet state-required budget adoption deadlines.
With 82 percent of the District’s general fund budget comprised of staffing costs,* the majority of recommendations unfortunately come down to reducing staff positions. (*Staff breakdown by type: licensed - 47%, classified - 48.4%, school-based administrator - 2%, central office administrator - 1.3%, supervisory/technical - 1.3%.)
Following is a summary of the reduction package presented by District administration that was favored by a majority of Board and Budget Committee members:
Retain current staffing ratios at grades K-2 (K = 26:1; Gr. 1-2 = 28:1), increase staffing ratio at grades 3-12 from 29:1 to 31:1
Loss of 31.5 licensed full-time equivalent positions (FTE)
Other licensed positions
Loss of 6.5 licensed FTE
Restructure Care Coordinator service delivery model
Reduction/movement of licensed staff
Loss of 37.5 classified FTE
Adjust classified staff calendars for certain positions due to job description consolidation
Estimated net savings
Loss of 3 administrator FTE
Discretionary budgets at schools and departments
5% reduction in discretionary budgets
Reclassification of 3 Facilities positions to Construction Excise Tax (CET) funding
Transition of funding obligation from general fund to CET
Suspend current funding
Superintendent Scott acknowledged that due to budget cuts that have been necessary in eight out of the last ten years totaling $64 million there are very few good options for making additional significant reductions.
The District believes staff position reductions can be managed through normal attrition and retirements, and that layoffs will not be necessary.
If additional funding is made available to K-12 before the start of the school year, the District will prioritize providing relief to classrooms. A probable scenario is that a revenue package will be referred to the November ballot for a vote. If the package passes, increased funding will likely not be distributed until the 2020-21 school year.
Stay tuned to this page for updated information as it becomes available.
Co-Chairs Release 2019-21 Budget Proposal
March 18, 2019 - On Thursday, Mar. 7, the Co-Chairs of the Joint Ways and Means Committee released their 2019-21 budget proposal, based on the March State Revenue Forecast, which calls for an $8,871.5 billion allocation to K-12 education. This is $590.5 million short of the $9.462 billion state-level allocation HSD would need to maintain current services over the biennium. At this funding level, HSD would experience a shortfall of $20.86 million over the next two years.
The Co-Chairs’ proposal also calls for a continuation of the partial funding of Measure 98 - the career-technical education (CTE), graduation attainment, and dropout prevention measure passed by voters in 2016 - districts received this biennium ($170 million). Full funding of M98 would be $303 million.
The shortfall in HSD would come on the heels of $64 million in net reductions to our current service level budget over the past eleven years. During this time, the District has increased class size, reduced staff in other areas, cut school days, reduced discretionary spending, depleted special reserve funds, and lowered our ending fund balance to 4 percent.
Hillsboro School District continues to push for stable and adequate funding of K-12 education, which the Co-Chairs’ allocation does not provide. We need a significant investment at the state level to fund education equitably across Oregon. The 197 school districts in the state should not have to individually rely on their local communities’ ability and desire to tax themselves over and above the amount that is already collected in support of public education to fill the gaps that are left by the State School Fund.
Please review the documents on our Budget Matters webpage for more information: 2019-21 Legislative Priorities, Legislative Advocacy Presentation, Advocacy Leave-Behind Sheet, and Budget Reference Materials. Then, using either the Legislative Contact List or the interactive Find My Legislator tool to select the appropriate people, take a few moments to reach out to your elected officials and urge them to support reinvestment in K-12 education.
The 2019-21 budget will not be final until it is adopted by the Legislature later this spring. We will keep you updated throughout the process.
Hillsboro School Board Passes Funding Resolutions
February 4, 2019 - At their regular session meeting on Tuesday, Jan. 22, 2019, the Hillsboro School Board unanimously passed a pair of resolutions aimed at increasing funding for Oregon public schools.
The first urges lawmakers to support student success and increase public school funding. By their passage of the resolution, Board members pledge to support and encourage efforts to increase state revenue.
The second specifically calls upon elected officials to fund public schools at the level outlined by the Quality Education Model (QEM). Citing the work done and conclusions made by the Joint Committee on Student Success, the resolution, in part, states: “…school board members need to help shoulder the responsibility for making the case to Oregon’s voters that the Legislature needs to prioritize investing to the level of the QEM to assure educational opportunities for every student in every district in our state.”
A potentially promising piece of legislation, Senate Bill 552, was filed as a placeholder prior to the start of the 2019 Legislative Session. This bill would require the state to fund the QEM.
The QEM calls for a K-12 allocation of $10.73 billion in the 2019-21 biennium. Governor Brown’s proposal for 2019-21 K-12 funding is $8.972 billion. Governor Brown has also proposed a $2 billion education reinvestment plan, just under half of which would be dedicated to lowering class sizes in grades K-3 and increasing the school year for all students.
So far, funding mechanisms have not yet been identified for either the Governor’s reinvestment plan or the QEM. However, several education-related entities and coalitions are calling upon the Legislature to make tough decisions around revenue reform this session.
Legislative Session Begins Tuesday
Friday, January 18, 2019
Elected officials will convene their Legislative Session on Tuesday, Jan. 22.
One of the most important outcomes of the session will be the passing of the state’s budget for 2019-21, which will include the allocation for K-12 education. The Governor has proposed $8.972 billion for K-12, but also has proposed a School Improvement Fund (Senate Bill 217) to reduce class sizes in grades K-3 and lengthen the school year, among other investments. At the $8.972 billion funding level, HSD would be approximately $11 million short for the biennium, so we are advocating for a state-level allocation of at least $9.3 billion to maintain current service level.
Other important bills to watch are:
- House Bill 2526 and HB 2580, which would make class size a mandatory subject of collective bargaining.
- Senate Bill 552, which would require the state to fund the Quality Education Model for K-12 schools.
- SB 351, which would fully fund the High School Graduation and College and Career Readiness Fund, also known as Measure 98.
- SB 149, which would allow retired employees to be re-employed while contributing to the PERS system to help reduce PERS’ unfunded actuarial liability.
- HB 2192, which would require schools to conduct mental health wellness checks once a year.
- HB 2676, which would increase the threshold for districts to receive money for special education students (the cap is currently 11% of student population).
We will keep you updated as the session progresses, and please use the resources listed on this page to gain additional information.
Governor's Budget Released
Monday, December 3, 2018
On Wednesday, Nov. 28, Governor Brown released her proposed budget for the 2019-21 biennium. In it, she outlines a series of sweeping changes in the operation of the state, including the implementation of her vision for education.
Historically, the amount of funding allocated to K-12 education in the Governor’s budget has represented a “floor” upon which the legislature builds during the session. This year’s budget is a bit different in that it calls for the legislature to enact revenue reform that would raise an additional $2 billion for education as a whole (early childhood, K-12, and higher education).
The current recommended allocation to K-12 without the revenue reform is $8.972 billion, which, if passed, would leave the Hillsboro School District approximately $11 million short for the biennium. To maintain current service level (CSL), which would mean doing the same things over the next two years that we are doing today, we would need a state-level K-12 allocation of $9.3 billion.
If the revenue reforms do come to fruition exactly as envisioned by Brown, slightly less than half of the new funds ($866.6 million) would be targeted at K-12 education initiatives:
- $793 million to the School Improvement Fund to provide funding for
- a “full” school year (typically assumed to be 180 days) and the reduction of
- class sizes at grades K-3;
- $45.6 million for early intervention/early childhood special
- $16 million in scholarships for the Educator Pathway program;
- $6 million to implement the Safe and Effective Schools task force
- recommendations; and
- $6 million for a Black Student Success and Alaska/Native American
- student plan.
These funds would be extremely helpful and would represent approximately $28 million in additional money for the Hillsboro School District: $11 million of that would be needed to address the shortfall we would experience at the $8.972 funding level, leaving approximately $17 million for strategies to increase student success, such as adding school days (HSD currently offers 174 days/year for elementary students and 175 days/year for secondary students; adding 5 school days to each calendar would cost approximately $8.3 million) and lowering class sizes (it costs approximately $171,500 per grade level to lower class size by 1).
In every biennium since 1999, Oregon’s Quality Education Commission has developed a Quality Education Model (QEM) to estimate the level of funding that would be required to operate a system of highly-effective K-12 schools in the state. According to the Commission’s most recent report, K-12 education would need an allocation of $10.77 billion to meet QEM. If that were an unrestricted allocation to the State School Fund, HSD would receive approximately $49 million in funds to invest in lowering class sizes; increasing instructional time; expanding interventions for struggling learners; adding programming for Talented and Gifted students; and enhancing support of career related learning, activities, arts, athletics and more.
We will continue to advocate for stable and adequate funding for K-12 education throughout the 2019 Legislative session and will keep you informed as things develop along the way.
Economic Forecast and Budget Outlook
Monday, November 19, 2018
In light of the November 14 State Economic Forecast, recently released PERS Employer Rates, and growth trends in Hillsboro, there is a projected shortfall of $20.5 million in the 2019-21 biennium at the current service level (CSL). Assumptions include an $8.7 billion appropriation to K-12, Hillsboro's enrollment representing 3.5% of Oregon's students, PERS rates remaining collared, no additional unfunded mandates, and no changes to the state’s current revenue generation model.
The report released by the Office of Economic Analysis indicates current growth remaining strong with solid gains in the near-term, and slowing to a more sustainable rate in the outlying years. From the 2017 Close of Session “COS” Forecast, the state general fund's net available resources have increased by $1.177 billion to $21,233.6 billion, closing the 2017-19 state budget gap and returning an anticipated surplus to taxpayers in the form of the "kicker."
In the 2019-21 biennium, there is uncertainty regarding the impact of federal policy changes as policy on tax cuts and spending turn from economic drivers to drags in 2020. Capacity constraints, an aging workforce, monetary policy changes and fading fiscal stimulus will all act to put a lid on growth in the coming years. However, the exact timing and steepness of this deceleration is difficult to predict, leading to a wide range of possible revenue outcomes for the 2019-21 budget period.
Three key milestones to District budget development and revenue projections are the Governor’s Budget Release (early December), the March Economic Forecast (February), and the Co-Chairs' budget (legislative session). Please continue to watch for updates as these come to pass.
HSD Funding Situation Heading in 2019-21
Wednesday, October 3, 2018
The last ten years have brought significant volatility to the U.S. and local economy, state-level revenue, K-12 funding, and to HSD's budget. Below is a table representing the major impacts to our District over that time span.
(*M66 & 67)
+3 days* (Gain Share)
+1 day* (*Add’l. Gain Share)
Net reduction in roll-up costs of $63.93 million - $13.72 million in the last three years alone. Net reduction of 18 days.
There is some indication that K-12 may receive $8.7 billion in the 2019-21 biennium, which represents a $500 million or 6% increase over the 2017-19 funding level. To meet roll-up costs, however, we would need an allocation of approximately $9.4 billion, which would represent a $1.2 billion or 14.6% increase.
HSD receives approximately 3.5% of all State School Fund dollars, so a $700 million shortfall over the biennium would equate to approximately $24.5 million, which would mean just over $12 million per year in necessary reductions.
Over the past year and a half, we have been involved in the Smarter School Spending process, which involves taking a critical look at all areas of our operation to find additional efficiencies, as well as making strategic investments in staffing and programs that we feel will have a measurable positive impact on student achievement.
We have exhausted our PERS Reserve Fund, have lowered our ending fund balance, and have taken a number of other steps to streamline our staffing and spending.
Stay tuned to this webpage for updates on our Legislative Priorities and on the 2019 Legislative Session as it gets under way in February 2019.
2018-19 Budget Proposal
Thursday, April 19, 2018
Relatively flat state revenue projections and this being the second year of the biennium meant there were no changes to the 2017-19 K-12 budget during the 2018 short session.
That, coupled with the fact that our student enrollment has fallen short of projections for the last two years and that student enrollment across the state has increased, thereby reducing the amount provided per-student, means that we will be in a reduction mode again for 2018-19.
We are estimating our shortfall to be $3,679,289, which already accounts for the utilization of the last $1 million in our PERS Reserve Fund and the further reduction of our Ending Fund Balance to 4% after the 2017-18 school year.
We propose managing the shortfall in two primary ways:
Leveraging other funds:
- Use Construction Excise Tax funds to pay principal and interest on our administration center - $530,000
- Pay for certain technology and equipment expenses out of bond funds - $700,000
Reduce roll-up cost estimates:
- Staffing, salaries, and benefits reductions - $2,449,289
The proposed budget will be presented to the Board and Budget Committee for their consideration on Tuesday, April 24, 2018.
Tuesday, July 11, 2017
Cost containment and revenue generation attempts ultimately failed in the 2017 legislative session, leaving the statewide 2017-19 K-12 budget at $8.2 billion.
The allocation is $50 million more than what HSD's budget was built upon; however, due to the 50/50 split of funds over the biennium (as opposed to the typical 49/51 split), the District will need the additional funds to help cover the shortfall in the 2018-19 school year.
Friday, June 09, 2017Author: Morgan Allen, Deputy Executive Director of Policy and Advocacy, Confederation of Oregon School Administrators (COSA)
With just over a month to go until the July 10 adjournment deadline, legislative discussions about revenue and cost-containment options to close a $1.4 billion budget hole are heating up. Here are some of the major pieces in play at the Capitol over the next few weeks.
State School Fund
On Thursday, June 8, the Oregon Senate approved a State School Fund Appropriation of $8.2 billion 25-5 after less than 15 minutes of debate and discussion. Senators who spoke in favor of the bill described the funding level as a “floor” and committed to finding more funding for K-12 if revenue and cost containment measures are approved. Those who spoke against reiterated their commitment to their local school districts that anything less than $8.4 billion was not acceptable. The bill, SB 5517, now heads to the House for a vote early next week.
Democratic leaders in the House and Senate appear to have reached agreement on a compromise corporate tax plan. The proposal includes a phased in corporate activity tax (CAT) and temporary corporate income tax increases. The plan would raise about $900 million during the 17-19 biennium, with most of the money dedicated to education. Under the proposal the State School Fund would be increased to $8.5 billion and Measures 98 and 99 would be fully funded. The plan is expected to get a public airing early next week. More information can be found in this Oregonian article: New Tax Plan.
Cost Containment and PERS
Major legislation has been introduced to control state costs (SB 1067) and make changes to PERS (SB 1068).
SB 1067 includes provisions to stop including automatic inflation increases in state budgets for services and supplies, a hiring freeze and slow-down on filling vacant state jobs, and eliminating state jobs that are vacant for more than six months. For K-12, the relevant proposal in the bill is to combine the boards/operations of Oregon Educators Benefits Board (OEBB) and Public Employees Benefits Board (PEBB) in an attempt to limit health insurance premium increases to 3.4 percent annually. Although some legislators have discussed requiring all school districts to join OEBB, that provision is currently not included in the bill. The bill is sponsored by House Speaker Tina Kotek and Senate President Peter Courtney.
SB 1068 would require all PERS members to contribute/redirect a portion of their IAP contribution to new “risk sharing accounts.” As drafted, beginning in 2018, 1% of the 6% would be directed to this new account, increasing to 2% in 2019. Depending on pension costs and returns, up to 4% of the 6% could be redirected to these accounts to help pay for the defined benefit portion of PERS pensions. Contributions can also be reduced as system liabilities decrease. The proposal does not include items previously discussed such as a $100,000 cap on final average salary or changing to a 5 year period to determine final average salary. As with earlier proposals, these changes would all be prospective and have no impact on benefits earned already. The bill is sponsored by Senate President Peter Courtney and Senator Mark Hass.
Combined, the two bills could save as much as $600 million per year when fully phased in.
The revenue and cost-containment proposals will likely be linked together if there is to be bipartisan agreement before July 10.
Continued conversations with our elected officials is critical. Please take a moment to reach out to them and express your views on revenue and cost-containment initiatives today.
Budget NewsMonday, May 8, 2017On Thursday, May 4, the Budget Committee unanimously approved the Proposed 2017-18 Budget, which assumed a statewide K-12 allocation of $8.15 billion, providing Hillsboro School District with a General Fund budget of $218 million – an amount that is approximately $7.5 million short of what we would need to maintain current service level.While the Budget Committee members were also unanimous in their agreement that reducing $7.5 million is unacceptable, especially given the fact that more than $60 million has been reduced from the District’s current service level budget since 2009, the $8.15 billion allocation level currently represents a best-case scenario. The allocation could be as low as $7.8 billion, which would mean cuts of approximately $12.3 million for HSD.Budget reductions are as follows:Use of Reserves and Adjustments
- State School Fund adjustments for 2015-16 and 2016-17 - $1,000,000
- PERS Reserve Fund - $1,000,000
- Construction Excise Tax to offset Facilities budget - $1,000,000
- Reduce Ending Fund Balance to 4.5% - $1,000,000
- Total use of reserves and adjustments: $4,000,000
Remaining Reductions/Efficiencies to Reach Target
- Central Office reductions and efficiencies - $2,258,000
- Student Services reductions - $455,000
- Better align staffing to enrollment - $1,000,000
- Total reductions: $7,713,000
Total Use of Reserves, Adjustments, and Reductions: $7,713,000
2017-19 BUDGET SCENARIOS AND ADVOCACY
April 17, 2017 - As the Oregon Legislature continues to wrestle with the state’s 2017-19 budget allocations, districts are fast approaching the time when they need to present and approve their local budgets for the upcoming school year. Most indications are that the K-12 budget will result in significant cuts for schools, which means that the time is now to reach out to your elected officials and advocate for increased funding.
Hillsboro School District has chosen to prepare a budget assuming a statewide allocation of $8.15 billion to K-12, which is in line with decisions other large districts like Portland, Beaverton and Salem-Keizer are making. An allocation at this level would result in cuts of approximately $7.5 million in the 2017-18 school year. Those reductions would be managed by utilizing both reserves and one-time sources of funds, better aligning our staffing ratio with actual enrollment, reducing staffing and programming at the district office level, and implementing efficiencies identified through our Smarter School Spending process.
Now, however, we are hearing that the $8.15 billion level may prove to be overly optimistic. There is still talk at the legislative level that the allocation may come in at $8 billion or lower. If that is the case, reductions in Hillsboro will be deeper and will almost certainly result in an increase to the staffing ratio (class size).
The graphic below shows the anticipated impacts at various funding levels:
Reducing class size is a priority for us, our School Board, staff, parents, students, and community members alike; however, we may simply have no other option but to increase it if the K-12 budget is below $8.15 billion.
Your voice in the matter is very important! Elected officials want to hear from their constituents about the things they care about, like education. They want to know that they have your support if they vote to increase the K-12 budget, propose revenue reform, and so on. An updated 2017 Legislative Contact List has been posted to the Budget Matters page of the website for your reference.
Staff will present their budget proposal to the Board and Budget Committee during the Board’s work session on Tuesday, Apr. 25, at 6:20 p.m. in Room 218C of the Administration Center, 3083 NE 49th Place. The following week, on Thursday, May 4, at 7:00 p.m. in the Administration Center Board Room, the Board and Budget Committee will convene for the annual Budget Hearing where they will take action to impose and levy the permanent education tax rate as outlined in state law. Both meetings are open to the public, and public testimony is allowed at the Budget Hearing.