Portland Public Schools proposes $179.9 million budget; board and council flag $4.1 million state funding loss

Ryan Scallon, Portland Public Schools superintendent, presented the district’s FY27 recommended budget to the joint city–school finance committee and said the proposed total is $179,900,000. "The proposed budget aims to address the challenges of declining enrollment, a significant decrease in state funding, and investments aligned to the strategic plan," Scallon said.

Scallon and Lisa Beck, the district’s senior director of finance, said that the original proposal would have increased the school portion of property taxes by 7.3% (about 46¢ per $1,000 of assessed value or roughly $261 annually for the median homeowner), a figure that reflected the district’s revenue assumptions and an unchanged property valuation. Beck said the district is using $3,900,000 of fund balance to reduce taxpayers' immediate burden and that proposed finance‑committee amendments could lower the levy impact to about a 6.43% increase.

A central driver of the district's budgetary pressure is a $4,100,000 reduction in state funding this year, Scallon said. He broke that loss into three pieces: approximately $770,000 from declining enrollment (the state uses average October 1 enrollment for funding calculations); about $3,100,000 attributed to a 15% increase in Portland's property valuation (the state adjusts local contribution against valuation); and the remainder tied to how the district ranks in minimum‑receiver adjustments under the state's EPS (Essential Programs and Services) funding formula.

Scallon described the district’s use of a zero‑based budgeting approach this year to force departments to justify each position and non‑personnel expense, and he noted $12,000,000 in new requests from schools that were reviewed against strategic priorities. He highlighted enrollment and outcome statistics: the district serves roughly 6,250 pre‑K–12 students (6,900 unique students served this year when adult‑education figures are included), 52% of students are economically disadvantaged, 20% receive special education services and 29% are multilingual learners.

In describing potential savings, Beck summarized proposed finance‑committee changes (March 23): a higher vacancy‑rate assumption (0.75% to 1%, saving about $358,000), $400,000 in central‑office staffing reductions, restoring one social worker at Deering High, removing an additional music teacher previously planned, cutting $100,000 from the Barry Dunn payroll contract and exploring $250,000 in savings from closing central office. Beck said those actions would reduce the tax‑levy increase to about 6.43%, or $229 a year for the median homeowner.

Board and council members asked detailed questions about the timing of any state funding change and operational tradeoffs. Mayor Diane asked whether state legislative changes would affect FY27; Scallon said the legislature's timing likely means any change would not affect FY27 and that the district's five‑year plan does not assume that money will appear. On facilities, the board has directed staff to study the middle‑school model and a facilities assessment is included in the budget to inform any future consolidation decisions.

Scallon also warned about the downstream fiscal effects of administrative underinvestment, citing a payroll‑system failure in 2022–23 that he said will cost about $2,000,000 to correct and noting the district has had to invest in external payroll support to prevent recurrence. The superintendent urged careful consideration before deep central‑office cuts that could increase operational risk.

The finance‑committee and board will continue review at upcoming meetings, and the full board was scheduled to consider the superintendent's budget on March 31. The joint committee set follow‑ups for external auditor briefing and capital improvement plan reviews before final recommendations to council.