Beaverton School District projects growing deficits despite large reserves

Beaverton School District leaders told the school board budget committee on March 11 that the district expects to end the current fiscal year with a deficit of a little more than $15 million and that deficits could grow to roughly $29 million in 2025–26 and as high as about $61 million by 2027–28 if no changes are made.

The projections were presented by Associate Superintendent Michael Scofield during the Budget 101 study session. He said the district is “already operating at a deficit” and that the $15 million shortfall is the issue staff and the superintendent’s cabinet are now addressing. He told the committee the board will be asked to adopt a proposed budget in June and staff will refine numbers after the May economic forecast.

Why it matters: the state school fund provides the majority of the district’s operating revenue, and the district has been using one‑time reserves to smooth budget gaps. Staff reported an ending general fund balance of about $160 million for the prior year and a long‑term planning reserve of roughly $22–23 million, which gives the district options in the near term but would not eliminate the need for structural changes if projected gaps persist.

Scofield and budget staff showed a multi‑year revenue/expenditure projection that assumes current service levels and known cost drivers such as PERS (the Oregon Public Employees Retirement System) rate increases and salary step increases. Under those assumptions, the district would draw down reserves over several years. Scofield said the superintendent’s office has “pinpointed a target of around $10,000,000 for this year” in potential reductions but emphasized the final recommendation will likely be a mix of spending reductions, one‑time reserve use and any new revenue if the state budget picture improves.

Board members and budget committee participants pressed staff on timing and contingency planning. Committee member Ogana (Zone 5) asked how long the district has been operating at a deficit; Scofield replied this is the first year in the last five the district has operated at a deficit and that, without new resources, the deficit is expected to grow.

The district’s next key budget milestone is the May economic forecast, which the legislature is required to use to enact the two‑year state budget. Scofield said the governor’s December recommended budget for the biennium is about $11.4 billion for the state school fund and that the district will monitor legislative actions, but the governor’s recommendation is not final.

Ending note: staff said they will return with a proposed budget in May and ask the board to adopt a budget before the June 30 deadline; final funding allocations will be adjusted when the state confirms its revenue and school fund figures.