Hillsboro School District warns of tight reserves after $20 million reductions, urges advocacy for more state funds

HILLSBORO, Ore. — Hillsboro School District leaders told the board at its retreat that the district has stabilized this school year after sweeping reductions and short-term borrowing, but warned that enrollment declines and rising personnel costs could require more cuts without additional revenue.

Superintendent Travis said the district acted over the last year to reduce spending and that leaders are watching early attendance and enrollment closely as school starts. “We will be counting heads very carefully when school starts,” he said, noting families affected by immigration enforcement or economic shifts may not return students immediately.

CFO Scott said the district implemented roughly $20,000,000 in staffing and operating reductions for 2025–26 and used an internal service bond to cover a prior-year deficit. “We also utilized about 8,500,000.0 in an internal service bond to deal with a deficit issue from '24 to '25,” Scott said, adding that the one-time money is now gone and the district is relying on its reserves.

Scott told the board the district’s reserve is about 4 percent of its budget and called that “a very, limited financial resiliency.” He said projected revenue increases from the state have not kept pace with inflation and personnel cost increases: “If our revenue is kind of 5 percent but these other costs are gonna take us up to 9 or 10 percent, we’re gonna continue to have a deficit situation,” Scott said.

District leaders said some state actions softened the immediate cliff for the 2025–26 year — including higher state allocations than originally expected and a partial Student Success Act/Student Investment Account allocation — but the district still faces a roughly $20 million shortfall carried from prior planning. Francesca, who manages the district’s federal- and state-funded programs, told the board preliminary ODE guidance indicates Hillsboro will receive about half of the student success grant funding the district had expected in the first year.

Board members asked how much leeway the district has to absorb future shocks. Scott said the district’s base has been adjusted such that he does not expect another round of equally large reductions this year, but he warned that ongoing enrollment declines — he estimated local declines in the low thousands regionwide — and continuing cost pressures could require future reductions. “That is the math that’s unforgiving in this: if nothing changes, eventually I just have to do that again and again every few years to keep resetting costs,” he said.

Superintendent Travis and other leaders urged the board to use its advocacy channels with state lawmakers to seek sustainable K–12 funding. Travis proposed a prioritized communication and advocacy plan to raise community and legislative awareness of the gap between rising costs and state revenue, and asked board members to take an active role in outreach and education on the district’s financial situation.

The board did not take an action at the retreat; Scott said staff will return to the board with follow-up budget details and recommended next steps as enrollment and final allocations become clearer.

Ending — Next steps The district plans to monitor enrollment at the start of school, finalize allocations from ODE and state sources, and return to the board with more detailed budget scenarios. District leaders urged board members to help with legislative and community outreach to explain the funding gap and the consequences for staffing and programs if revenue does not increase.