The Phoenix-Talent School District offers a quick rundown of school budget basics on its website.
A school district budget is a plan based on a series of estimates, and it’s anybody’s guess when the underlying factors may change significantly.
“A budget is a plan at one point in time,” said Jackie Olsen, executive director of the Oregon Association of School Business Officials. “As soon as I put in a number, it’s already wrong because there are probably factors that have already changed. You have to pick a point in time because it takes a lot of time to build a budget and meet budget process requirements.”
The Legislature announced Wednesday, March 19, that it intends to allocate an $11.4 billion State School Fund, the central number in any district’s budget. But most districts have already been working on their budgets for months, and they won’t know what $11.4 billion actually means for their bottom line until sometime in 2027, when the Oregon Department of Education checks all the math to make sure they received the right amount.
School business officials build their budgets based on expectations for property taxes and the State School Fund, often using the governor’s recommended budget released by Dec. 1 and their own reading of the political winds for a starting point.
They anxiously await to see if the Legislature in its framework will match their guess, but school budgets for 2025-27 by necessity are well on their way.
The Legislature determines the State School Fund, and it does all its budgeting work in the Joint Ways and Means Committee. On Wednesday, Sen. Kate Lieber and Rep. Tawna Sanchez released the 2025-27 Co-Chair Budget Framework, a five-page document laying out the Legislature’s spending plans.
Based on the March Oregon Economic and Revenue Forecast, the Legislature expects to pass a $11.4 billion State School Fund with the caveat: “This amount assumes that accountability measures are adopted to improve measurable outcomes and support student success.”
The Legislature’s number mirrors the $11.36 billion Gov. Tina Kotek called for in her recommended budget, while raising the accountability measures she is pushing this session. OSBA has supported accountability legislation broadly but has some concerns about the lack of specifics in House Bill 2009 and Senate Bill 141.
School budget timelines differ between the largest districts and the smallest, but the steps are roughly similar.
Olsen, who previously worked as the chief financial officer for the Linn Benton Lincoln Education Service District, said the process begins with creating a budget calendar to be approved by the school board.
Olsen said she would start with the budget deadline of June 30 and work backward for meeting dates. The budget must go through multiple public meetings, and those meetings must be advertised beforehand online and in the local newspaper (which is becoming increasingly difficult).
Between November and February, school business officials start laying their budgets’ foundations by calculating expected costs.
Most districts spend between 80% and 85% of their budget on staffing. Olsen said this is always an estimate because it is rare to enter any budget period with all labor contracts settled. A fraction of a percentage point difference between the budget plan and the actual agreement in an annual raise can shift hundreds of thousands of dollars not only into the future but also into the past if negotiations carry on past a fiscal year.
The budget also must predict any changes in staffing, such as replacing retiring teachers or bulking up support staff. And then there is the unpredictable, such as a pandemic that required more mental health services for traumatized children.
The Phoenix-Talent School District’s enrollment dropped about 370 students after a fire in 2020 wiped out a chunk of the local housing, forcing families to relocate.
The district was able to maintain its overall budget because the state stepped in with some stabilization funds and the district had federal COVID emergency funds available, but it had to make big changes to some of the lines. For instance, the district had significantly higher transportation costs as it served families who were forced to move away but wanted to keep their students enrolled with their friends and familiar teachers.
It also meant that some district staff payroll had to be switched from one funding stream to another, said Yazmin Karabinas, Phoenix-Talent accounting director.
Karabinas said school board budget committees offer important oversight when they ask clarifying questions about where their dollars are going.
By law, a school district budget must be approved by a budget committee that includes the school board and an equal number of public members. Many school districts offer training for new budget committee members. The committee’s public meetings must be announced online and in the local paper up to a month before taking place.
School budget committees start meeting usually around April, when the state and federal governments are still working out budgets. They ask questions and take public comment.
Karabinas said it would help the budget process if the state invested in a budgeting tool all districts could use. Some districts have customized dashboards while others use more common tools, such as Excel, making it difficult to compare spending and look for differences that could indicate a need for more attention.
School budgets must follow a form. The budget committee reviews a document with hundreds of pages that shows the previous school year’s actual budget, the current school year’s adopted budget (which is a guess in progress), and the proposed budget for the next year (a guess built on a guess).
The district must also provide the budget committee with a summary of any major changes from the previous year, such as passing a bond or an enrollment change.
Olsen said it’s important to know that budget committees are approving maximum spending amounts for different categories and not the individual breakdown of expenses. For example, they approve how much will be spent on instruction, but not how much is spent on high school teachers vs. elementary teachers.
Once the budget committee approves a budget, a summary must be published in a newspaper. Then the school board must adopt the budget by June 30.
The Legislature won’t finalize its budget for 2025-27 until it sees the quarterly economic report in May. The framework also mentions that the Legislature is working on spending scenarios that envision up to a 30% loss of federal funding.
The Legislature does not have to adjourn until June 29 this year, meaning the final State School Fund amount could still be undecided when school boards must meet to adopt their budgets.
If the adopted budget has an appropriation level that is more than 10% different than the final allocation, the board must then do a supplemental budget with hearings open to the public.
“It’s not a household budget,” Olsen said. “Do you know how many rules we have?”
– Jake Arnold, OSBA
[email protected]
Part 2: School budget writing depends on many estimates outside districts’ control
