Portland Public Schools unveils $2.04 billion 2025'26 budget proposal amid structural deficit

Superintendent Armstrong delivered Portland Public Schools' proposed 2025'26 budget at the board's April 22 meeting, describing a multi-year structural shortfall and outlining reductions, a planned enrollment campaign and assumptions that shape the district's plan.

The proposal and fiscal context Superintendent Armstrong said the district faces a structural deficit and a multi-year trend of falling enrollment. The proposed all-funds budget totals $2,040,000,000, which the superintendent described as the full cost of operating the district. Key figures the superintendent reported: - Total proposed all-funds budget: $2,040,000,000 - General fund (operating): $868,000,000 - Capital projects fund: $643,000,000 - Debt service: $272,000,000 - Instructional investment: $545,000,000 - Weighted enrollment used for state funding: 52,324 students - Enrollment decline since 2019-20: 10.8%

Armstrong described the district's spending priorities as protecting student experience and achievement and aligning resources to board goals (third-grade reading, fifth-grade math, eighth-grade readiness and graduation). She said the district has reduced central office full-time equivalents (FTE) by about 85.5 positions and is targeting over 200 FTE reductions in schools.

Bond assumption and revenue context The proposed budget assumes voter approval of a $1.83 billion capital bond on the May 2025 ballot; staff told the board that bond approval would allow the district to plan and appropriate capital projects (modernization of specific high schools, safety and ADA improvements, technology and facilities work). The district said capital expenditures in the proposed budget would be reduced if the bond is not approved.

Drivers and fiscal choices - Enrollment decline (10.8% since 2019-20) is the single largest funding challenge cited; state funding is per-student and declines with enrollment. - Rising operating costs (labor, PERS retirement costs, utilities, transportation) and the end or reduction of pandemic-era and other restricted funds were cited as additional pressures. - The superintendent referenced a $40,000,000 targeted reduction plan announced earlier in the year and said additional reductions are likely in 2026'27 (staff projected a minimum additional reduction of $32,000,000 for 2026'27 based on current assumptions). - The district plans to maintain a 5% general-fund reserve target in the proposal and to draw on a stabilization fund previously set aside for PERS increases.

Staffing and central-office changes - Staff reported 85.5 central-office FTE reductions and 14 grant-funded FTE reductions; the district said reductions nationwide and within the state are occurring alongside PPS cuts. - The district described a reorganization that consolidates some senior leadership responsibilities, aims to reduce silos and centralize some functions while giving principals limited flexibility to reallocate staffing to school needs. - District leaders emphasized they did not increase class sizes systemwide and that 98.7% of elementary classrooms are projected to remain within target size; projected elementary average class size was reported as 23.4 students.

Process and timeline Chair Wong convened the board as the budget committee to receive the superintendent's budget message. The board and staff outlined next steps and public opportunities: - Public hearing: April 29, 6'8 p.m., Grant High School - Board discussion slot: May 6 meeting - Board vote to approve (preliminary): May 19 - Final adoption (budget committee/TSCC hearing): June 10

Board reaction and requests Directors pressed staff on details including what central-office contracts and non-personnel reductions will be made, how many of the reduced positions represent vacancies versus active layoffs, how the district will aggregate classroom assessment data next year, and what the district's contingency and reserve levels represent in practical terms. Several directors urged stronger legislative advocacy and called for state action to address K-12 funding across Oregon.

Ending: District leaders said they will continue community engagement and report quarterly on outcomes tied to board goals. The superintendent emphasized the proposal protects core instructional services while acknowledging continued work ahead if state or local revenues change.