Lake Oswego SD projects $10 million shortfall, proposes 112 FTE reductions; legal budget committee to review May 21

Lake Oswego School District legal budget committee members heard a presentation on a preliminary general fund budget that assumes roughly $10 million in reductions for fiscal year 2025–26 and would reduce the district’s planned reserve to $500,000 while keeping a proposed total general fund budget of about $123 million.

The presentation by district finance staff showed an updated financial model that narrowed a December projection of about a $12 million deficit to “under $2 million” for 2025–26 after the district implemented hiring freezes and the program of cuts, but it still projects a preliminary shortfall of approximately $1.5 million in 2026–27 if current assumptions hold. Stuart Ketzler, the meeting presenter, told the committee that the model does not yet include possible PERS (Public Employees Retirement System) rate relief expected from a bill recently signed by the governor and pending final actuarial calculations by Milliman and the PERS board.

Why it matters: the proposal would shrink the district’s ability to respond to emergencies and would change service levels in classrooms and support programs. Committee members repeatedly pressed that if temporary state relief or additional reimbursements for high‑cost special education materialize, the district intends first to restore fund balance rather than immediately re‑fund cut positions.

The most tangible changes in the draft budget are personnel reductions. Ketzler outlined a net reduction of 112 FTE (full‑time equivalent) between the district’s November peak staffing and the 2025–26 proposed budget. That figure combines 27 classroom teaching positions (7 elementary and 20 secondary), 64 non‑classroom positions (a mix of classified, licensed and administrative roles) and…