Portland schools report year-to-date finances; FY26 budget on city schedule before June referendum

The Portland Board of Education Finance, Operations and Personnel Committee heard an update on the district’s fiscal-year 2025 finances and the FY26 budget during its May 12 meeting.

District staff reported that the adopted budget was $161,416,000 and that, through April 30, the district generally expects to be at about 83% of revenues collected for the year. "Our general fund is at 81%" and "personnel is lower at 75% right now," staff said, while contracted services were running higher at about 90%.

The update matters because the city’s schedule requires any final budget decisions before the June 10 referendum. Staff reminded the committee that the city’s finance committee approved the school budget on a 3-0 vote and that the city will hold a second public hearing on May 19 at 5 p.m., which is “the sort of last time to give input before it goes to the referendum on June 10,” staff said.

Staff walked the committee through revenue and expenditure categories. They noted timing differences: food services revenue was at about 63% because reimbursement claims have timing lags, and a planned use of fund reserve for food service will be recognized later in the year. ESSER (Elementary and Secondary School Emergency Relief) expenditures showed an increase from an adopted $433,000 to $1.3 million after recognizing additional grants. On expenditures overall, staff said the general fund was at 76% of budgeted spending and that, across categories, supplies were at 76% and debt service was tracking as expected.

Committee members asked about fund balance limits and guidance to schools on year-end spending. Staff said unused funds generally flow into the district’s fund reserve and are available for future needs; they noted an audited balance of about $14 million for fiscal year 2024 and said the state cap on reserves is in flux (discussed in legislation moving between 9% and 5%). "If at any point, at the end of a fiscal year, if you're beyond that cap, you work with the state on a 3 year spend down to get back under the cap," staff said.

The district said it had issued guidance to schools advising against an aggressive year-end spend-down this year to preserve reserve capacity given federal funding uncertainty. Staff also said they will bring a proposed committee-level practice for approving substantial intra-budget changes (below the statutory transfer threshold) at a future meeting to provide additional fiscal controls and an audit trail.

Committee members sought clarification on timing targets and the district’s approach to unspent funds; staff reiterated that underspending bolsters the fund reserve. The committee asked that staff return in June (or August if needed) with a formal proposal for how substantial changes to the budget will be presented and approved at the committee or board level.