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Oak Grove School District faces multi‑year budget shortfalls as special‑education costs rise
Summary
Associate Superintendent Mark Evans told the district that declining attendance and rising special‑education and contracted‑service costs have pushed Oak Grove into multi‑year deficits; he outlined reserve use and efficiency options and answered parents’ questions about attendance funding and restricted special‑education dollars.
Mark Evans, the associate superintendent of business for the Oak Grove School District, told parents and staff that the district is facing multi‑year budget shortfalls driven by declining enrollment and rising special‑education and contracted‑service costs.
Evans said the district adopted a June 2024 budget that anticipated about $136,000,000 in revenue and about $153,000,000 in expenditures, producing a roughly $16,800,000 deficit. By the district's December first‑interim report the deficit had grown to about $19,600,000, in part because of carry‑forwards and staffing timing. "We did a transfer in from a special reserve," he said, adding that about $3,100,000 was used to cover a recent math textbook adoption.
Why it matters: Oak Grove's available unassigned cash has shrunk and much of the district's ending fund balance is restricted, limiting management options. Evans said the district's ending fund balance fell from about $31.5 million at budget adoption to about $28.6 million at first interim, and that unassigned cash dropped from roughly $4.3 million to about $1.6 million after accounting for required reserves and restricted funds.
State and federal funding dynamics are complicating the picture. Evans discussed the governor's proposed January budget and Prop 98 funding assumptions, noting the governor used a $117.6 billion revenue assumption rather than $119.2 billion — a $1.6 billion gap that could reduce available state funding for districts. The governor also proposed a one‑time $1.8 billion discretionary block grant; Evans estimated Oak Grove's share at roughly $2.5 million to $3.0 million if distributed strictly by student population, but emphasized that the money would not be ongoing.
Evans outlined the proposed 2.43% cost‑of‑living adjustment (COLA) for school funding and gave per‑ADA base rates by grade span. He cautioned that declining average daily attendance (ADA) will blunt the district's realized COLA: Oak Grove's ADA for the 24‑25 year was about 8,302.88, and Evans said a projected drop to roughly 8,137 ADA in 25‑26 (a decline of about 165 students) reduces the district's net COLA benefit to roughly $575,000 rather than the larger nominal amount implied by the percentage increase.
Special‑education and contracted services are a central driver of the district's higher costs, Evans said. He showed statewide and local charts indicating that although total enrollment has fallen, the number of students receiving individualized education plans (IEPs) has increased, raising special‑education's share of costs. "We do get funded nowhere near the cost, so we add additional contributions," Evans said, noting that district contributions for special education rose in recent years (he cited a pandemic‑era contribution figure of about $23.15 million and said the expected contribution is now over $28,000,000).
To address the shortfalls, Evans identified potential strategies that the district is evaluating: targeted retirement incentives (to replace higher‑paid incumbents and capture salary differentials), reducing contracted services by hiring in‑house staff where feasible, optimizing bus routes to reduce transportation costs, and using bond‑funded capital improvements (for HVAC, etc.) to lower utility and repair costs that otherwise affect the general fund.
Parents asked questions during the live Q&A. Sophie Freestone, introduced as a PTA member from Parkview Elementary, asked whether excused absences (for example, with a doctor's note) still reduce district funding. Evans replied that absent students do not generate ADA funding regardless of excusal and urged health precautions: "when they're not here, we don't get the funding for it," and he said, "do not send them to school when they have a fever."
Another caller identified as Nina asked whether special‑education funds are restricted. Evans confirmed that special‑education funds are restricted and must be used for special‑education services.
The district will present its second interim at the upcoming Thursday board meeting and continue monitoring state revenue collections through April, Evans said. The presentation was recorded and will be shared with participants.
Evans emphasized the limits of one‑time state proposals and the need to balance attracting and retaining staff with budgetary constraints as the district plans for the 25‑26 and 26‑27 fiscal years.
