District finance director warns a proposed 5% ODE reduction could hit local budget; impact unclear

At a regular Molalla River SD 35 board meeting, Finance Director Andy Kimball briefed the board on enrollment, budget projections and potential state-level funding reductions. Kimball said the state has asked the Oregon Department of Education (ODE) to target a 5% reduction in the state school fund, an action that would equate to roughly $500 million statewide and could be implemented incrementally.

"The state has asked ODE to target a 5% reduction," Kimball said, adding that reductions could appear in steps (for example an initial 2.5% followed by further reductions) and that ODE is producing a plan expected to go to the governor on Oct. 17 and then to the legislature. Kimball said the district is about 40 students above its January estimate used for the state school fund calculation but cautioned that the situation is still evolving and that final impacts depend on the plan and legislative action.

On possible local impacts, Kimball said the reduction "could be up to about 1,000,000 dollars this year." He urged measured responses: "The main thing is not panic. Don't overreact," and outlined immediate actions the district is taking, including scrutinizing requisitions, holding some spending and monitoring developments as they occur.

Board members pressed for the rationale behind the requested reduction; Kimball said the request came through the governor’s office and tied the funding gap to broader revenue pressures, including federal tax changes that have affected state revenues. He and the board agreed the district is fiscally prudent and has a fund balance that could cushion moderate reductions while staff refine projections and monitor ODE updates.

Next steps: district staff will continue budget monitoring, meet with building and department heads to identify potential holdbacks, and report updates as ODE and the legislature clarify the final plan.