Parkrose budget presentation warns federal grant cliff and special-education funding cap could worsen district shortfall

Superintendent Andre Goodloe and district finance staff told the Parkrose School District Board of Education on Feb. 10 that revenue projections and possible changes at the state and federal level mean the district faces a budget shortfall next year and greater financial risk in the following year.

The presentation laid out three drivers: a drop in temporary federal relief dollars (ESSER) that the district spent between 2021 and 2024, uncertainty about future federal title grants, and the way Oregon’s state funding formula treats special-education costs. “The state gives me $10,922 per student,” Sherry, a district finance staff member, said during the presentation, citing the board’s most recent per-student state allocation. She said the district’s audited total expenditure per student in 2022–23 averaged roughly $17,000, with some schools reaching about $21,000 per student.

Why it matters: Parkrose’s general fund budget is roughly $39 million in the current planning year, and the district used one-time federal and other targeted funds to support ongoing positions and services. The board heard that many of those one-time federal dollars — including about $10.5 million in ESSER relief that flowed to the district from 2021–2024 — have been spent and cannot be assumed in future budgets.

Key details presented to the board:

- State revenue scenario: Under the governor’s proposed school funding (about $11.3 billion statewide in the governor’s budget), the district’s state school fund allocation would increase from about $39 million to about $41 million — roughly $2.2 million the first year and a smaller increase the next — but most of that increase would be absorbed by mandated cost increases and other fixed expenditures the district must cover. The finance presentation warned that every $100 million change in the statewide number would translate to approximately $260,000 for Parkrose.

- Special-education funding: Oregon currently caps certain special-education funding calculations at 11% of average daily membership weighted (ADMw); Parkrose’s share of students with IEPs has averaged in the mid-teens. District staff explained the two legislative alternatives under discussion: raising the cap from 11% to 15% or expanding full reimbursement for “high-cost disability” placements. Raising the cap to 15% would, by the district’s estimate, yield about $627,000 in additional revenue under current assumptions. Full reimbursement of high-cost disability placements would shift dollars to cover some outplaced students whose costs can exceed $100,000–$200,000 each (the presentation used a functional living skills classroom example with a cited slot cost of about $159,000 plus one-to-one aides of about $65,000).

- Student Investment and other targeted accounts: Parkrose currently uses Student Investment Account and high-school-success funds — roughly $3.06 million and about $997,000 respectively under current counting — to backfill general-fund services the board and community have prioritized. District staff cautioned that relying on these restricted or targeted accounts to meet ongoing general-fund needs reduces the funds available for the additional programs those grants were intended to support.

- Federal grant risk: Finance staff said roughly $2 million in current federal title grants (non-ESSER) could be at risk under some congressional proposals, and that the administration’s actions at the federal level have created uncertainty about future federal funding streams.

Board discussion centered on how to present the district’s case to legislators, the tradeoffs between changing the special-education cap versus expanding high-cost disability reimbursement, and how much of next year’s budget to assume based on the governor’s proposal. Goodloe said the district will budget initially using the governor’s figures while continuing to track decisions by the Legislature and federal developments.

The board also discussed operational implications including possible program reductions, the timing of contract negotiations with staff (which could widen next-year costs), and the district’s long-term liability from PERS retirement obligations. Goodloe and finance staff said they will return with more detailed scenarios after the state’s March estimates and as legislative decisions become clearer.

The board asked for monthly updates on the district’s projections and a clearer list of items that would be at risk if revenues do not materialize.