Our Situation – This Year

For several months, we have been tracking the economic crises in the nation and in Oregon to determine what the impact will be on the school district this year.

It is important to get closure on this year's budget because we cannot move forward with next year's budget drafting process until we know how this year will end.

Given the information we had during different times throughout this year, shortfall estimates ranged from $3.5 – 5 million (November/December) to our known worst-case scenario of $23 million (January). Thankfully, federal stimulus dollars have been brought into the mix, reducing cuts to K-12 education statewide.

We are now fairly certain that the budget cut we must make for this year (2008-09) is $8.3 million. However, it is still likely that this amount will change based on the May adjustment from the Department of Education and/or other changes from the legislature.

I want to share how we are planning to address the deficit but first I want to reiterate the values we used in making these decisions:

• Minimize impact on students.
• Minimize impacts on staff (try to save jobs).
• Position ourselves for next year and beyond (budget and student achievement).
• Move forward in a way that brings the district and community closer together.

We do not believe we will be forced to cut school days to balance this year's budget. With that in mind, we have determined the best way to address the shortfall is to:

*This funding was part of last year's $3.6 million May adjustment and still maintains the $2.5 million the board directed toward maintenance issues. Please note – these dollars are located in asset replacement funds and not the general fund.

In this district, based on excellent financial management and sacrifices on the part of all employees and our decisions to stop specific spending (i.e. new computers), we do not believe we will need to cut any school days for this year. While this will allow us to keep the current school year and workforce intact, it does leave us with less money than we would like to have to build our budget for next year. Even in good times, a certain carryover from one budget year to the next is advisable. We expect next year's shortfall to be much greater than this year and it will require much more work and sacrifice to solve.

Our Situation – Next Year (and the year after)

The legislature received a report that indicates the 2009-11 shortfall in State revenue could be over $3 billion.

It is possible that the funding picture for K-12 education will further deteriorate. The legislature will grapple with the use of the State's Rainy Day Fund and Education Stability Fund, as well as potential Federal Stimulus Dollars, in their efforts to balance the budget. These other funds give us hope, but also increase uncertainty about resources for next year.

Unfortunately, we are in the situation where we are unable to predict funding for next year's budget with any reliability – however, we will begin the budget process for the 2009-10 budget and our tentative plan will include:

• April – meetings for staff members
• May – meetings for the community – The goal of these meetings is to share the information we have to date as well as the gather feedback on potential reductions.
• May 26 or 27 - Superintendent's Budget Message
• June – Budget Committee meetings and public hearings
• June 23 – Adoption of the budget by the School Board

We will continue to have monthly budget committee meetings to keep the committee up to date on the process and the most recent financial information.

Next Steps

1. Continue our dialogue with associations so we work toward agreement on the facts related to the budget shortfall.
2. Maintain open dialogue as we enter regular negotiations next year.
3. Continue to monitor funding forecasts.
4. Continue our communications to reduce confusion.
5. Schedule meetings with staff and the community.
6. Next Revenue Forecast: May 2009

 As always, please call or e-mail if you have questions.

Sandy Husk
(503) 399-3001
husk_sandy@salkeiz.k12.or.us