In a recent meeting of the Lake Oswego School District 7J Board, district officials delivered a stark financial update, revealing a projected budget deficit that could reach $8.5 million for the 2025-2026 fiscal year. This marks a significant shift in the district's financial outlook, as it has been over a decade since such a negative projection was presented.

The district's financial challenges stem from a growing imbalance between revenues and expenditures, exacerbated by rising costs, particularly in the Public Employees Retirement System (PERS). The anticipated increase in state funding, while welcome, is not expected to bridge the gap created by these rising costs and existing budgetary commitments. The district's financial model indicates that without substantial changes, the current service levels are unsustainable, prompting discussions about potential staffing reductions and budget cuts.

Superintendent Dr. Stuart Ketzler emphasized the need for immediate action to address the financial shortfall, noting that the district has already begun to explore options for reducing non-essential spending. He acknowledged the difficult decisions ahead, which may involve layoffs, as the district aims to align its staffing levels with available funding.

Board members expressed concern over the implications of these financial constraints on educational services and the community. They highlighted the importance of transparency and communication with staff and families as the district navigates these challenges. Plans are in place to inform staff about potential reductions in force (RIF) and to engage the community in discussions about the future of school funding.

The meeting underscored a broader issue facing many school districts in Oregon, where funding levels have not kept pace with rising operational costs. As the district prepares for upcoming budget negotiations and seeks to stabilize its financial situation, officials are calling for increased support from state legislators to address the funding gap and ensure the sustainability of educational programs.

In conclusion, the Lake Oswego School District is at a critical juncture, facing significant financial challenges that could impact staffing and educational services. The board's commitment to transparency and community engagement will be essential as they work to navigate these difficult decisions in the coming months.