Corvallis SD 509J proposes $182.6 million budget for 2025–26, projects $2.98 million shortfall amid enrollment decline

Corvallis School District (SD 509J) on Tuesday presented a proposed $182.6 million all‑funds budget for the 2025–26 fiscal year and said the general fund faces a projected shortfall of about $2.98 million, driven primarily by declining enrollment, uncertain state and federal revenues and rising payroll and retirement (PERS) costs.

Superintendent Noss told the budget committee the proposal “prioritizes specials at our elementary schools,” and she described the package as a mix of reductions and continued investments aimed at preserving core programs while narrowing the gap.

The nut graf: The district says expected state funding for the next biennium is not final and the proposal uses conservative assumptions. Without additional state revenue or other offsets, the district projects a multi‑million dollar gap that will force corrective budgeting choices; the district is conducting a demographic study and a facilities assessment to inform longer‑term decisions, which it will bring to the school board in August 2025.

Most important details

- Total proposed budget (all funds): $182,600,000 for 2025–26. The general fund represents about 63% of that total. Finance Director Lauren Wolf presented the figures. - General fund current resources (budgeted): $115,100,000, an increase of $2.6 million (2.3%) from the prior year’s budgeted resources. - Projected shortfall: Superintendent and staff described an approximated general‑fund shortfall of $2,980,000 for the coming cycle, after prior actions reduced an earlier deficit of roughly $8,200,000. - Enrollment assumptions: The budget uses a planning enrollment of 5,898 (an extended ADMw figure) in its revenue calculations; the district projects enrollment of 5,661 students for 2025–26 (237 fewer than the current year) and longer‑term declines to about 5,140 by 2028–29 unless trends change. - Reserves and fund balance: The beginning fund balance across all funds is budgeted at about $25.6 million; roughly $16.8 million of that is in the general fund. The district emphasized Board Policy DA on reserve objectives and replenishment planning. - Local funding: The local option levy provides about $10.8 million and supports roughly 66 FTE positions in recurring services the district says voters renewed in May 2022. - Federal and state grants: Federal funding is budgeted at roughly 6% of overall revenues (about $10 million annually) and the proposed budget assumed a 25% reduction to some federal grants (including elimination of Title II) for planning purposes; staff said carryover and final federal allocations will affect the net impact. State School Fund assumptions used the governor’s recommended figure; staff warned the legislature’s final allocation is still pending. - Payroll and benefits: Staffing and related payroll/benefits consume the majority of expenditures (staffing accounts for more than 50% of the budget). The budget assumes step increases and cost‑of‑living adjustments that raise certified and classified compensation: certified and non‑represented Cola/step assumptions were described in the presentation (examples given: certified ~4% cola, classified ~5% cola, though exact contract terms are governed by collective bargaining). - PERS: Rising required PERS contributions remain a significant constraint. Staff noted a historic bond transaction to buy down rates will finish in 2028 and that state‑level changes to PERS funding could alter future rates; the district said PERS remains a material budget risk.

Supporting details and constraints

Finance Director Lauren Wolf walked the committee through major resource and requirement assumptions, noting: the budget presentation uses an assumed statewide State School Fund level (the governor’s recommended $11.4 billion figure for planning) but cautioned that the final legislative allocation for the 2025–27 biennium is undetermined and could change the district’s revenue position. Wolf said the district budgeted an extended ADMw of 6,997.93 (the per‑pupil factor the state uses) and is operating on the higher of the current or prior year ADMw for funding calculations.

Wolf also described non‑general funds and major variances: the capital projects fund declined after prior bond projects were spent down; the district retains two major existing debt obligations tied to GO bonds plus an unfunded PERS liability debt service item. Construction excise tax (a restricted revenue source) and anticipated donations for projects such as “Corvallis Fields for the Future” appear as restricted capital revenue in the draft budget.

Policy and next steps

School Board Policy DA (financial objectives for managing general fund reserves) was cited in the presentation as governing reserve levels and the requirement that, if reserves are used, a replenishment plan is expected. Superintendent Noss said the district is engaged in long‑range planning — a demographic study and a facilities assessment — to provide options including redistribution, consolidation or closure in the future; the district explicitly guaranteed that all current schools will remain open for the 2025–26 school year.

Distinguishing discussion from decisions

- Discussion: The superintendent and finance director presented assumptions, long‑range planning work and revenue scenarios. Staff repeatedly described federal and state funding as uncertain and flagged PERS and payroll as drivers of the gap. Wolf told the committee the budget incorporates conservative assumptions (enrollment and federal cuts) to avoid surprises. - Direction/assignment: Staff said the demographic study and facilities assessment will be presented to the board in August 2025; staff also offered to supply additional detail requested by committee members before the committee’s final action. - Formal action: At the end of the meeting a committee member proposed postponing a formal approval vote until the following week to allow further review and community input; that motion was seconded and remained pending on the record (no final vote was recorded during the session).

Why it matters

The budget outlines a constrained fiscal picture for a district that says it is trying to preserve a “well‑rounded” education while coping with fewer students, higher personnel costs and uncertain external revenue. Decisions made during the next budget meetings will determine program levels, class sizes and the pace of longer‑term facility adjustment planning.

What to watch next

The district will publish the demographic study and facilities assessment data in August 2025. The legislature’s final 2025–27 State School Fund allocation and any federal grant decisions will materially affect the district’s funding outlook. The budget committee and board will consider those inputs as they move toward a final appropriation for 2025–26.