As budget season begins, school districts on the North Coast tackle funding challenges

Confronted with enrollment declines and the end of federal stimulus money, school districts in Oregon and across the country are grappling with ways to balance budgets ahead of the new fiscal year.

The Elementary and Secondary School Emergency Relief Fund was a lifeline for many school districts during the coronavirus pandemic, supplying about $200 billion nationally across three funding rounds in 2020 and 2021.

Schools

Some school districts, like Astoria and Knappa, are dealing with enrollment declines.

The first two rounds were aimed at supporting online instruction and reopening schools safely. The third round — by far the most substantial, at $122 billion — came with a requirement that schools spend at least 20% of the money on mitigating learning loss.

That money, which included $1.1 billion for schools in Oregon, is expiring this September.

Now, school districts that used those funds to hire staff and support student needs are struggling to come up with other ways to fit expenses into budgets for the fiscal year that starts in July.

The Astoria School District spent over 90% of its third round stimulus funding on staffing, according to superintendent Craig Hoppes. The district hired additional instructional assistants, substitute teachers and an on-track coach, largely aimed at mitigating learning loss and helping support students’ social and emotional needs.

Hoppes anticipates trying to move some of those stimulus-supported positions into the school district’s general fund. But a budget shortfall created by declining enrollment and rising costs means that some positions will likely have to be eliminated — even as student needs persist.

“Because the ESSER funds go away, doesn’t mean those issues are going away,” Hoppes said. “So we have to figure out a way to support those same things, mitigate the loss of learning and (support) mental health of students.”

The Warrenton-Hammond School District also spent its federal stimulus funds on social and emotional learning and behavioral health supports.

“The task is trying to sustain what we were doing with the ESSER funds through innovative ways,” superintendent Tom Rogozinski said. “But if they’re going to cut $500 to $600,000 from your operating budget … and 80% of your budget is wrapped up in personnel costs, it’s inevitable that you’re gonna have to reduce staffing to get there.”

Other school districts are in a better position to navigate the sunsetting of the federal money. Knappa and Jewell both opted to direct the funds primarily toward nonstaffing costs, so they wouldn’t have to sustain recurring positions after the funding expired. In Seaside, many federal stimulus-funded positions were moved into the school district’s general fund last year in anticipation of the funding cliff this year, according to superintendent Susan Penrod.

“While we are paying really close attention about what we’re going to prioritize (in the upcoming budget), we are not foreseeing any cuts at this moment,” she said.

But school districts face other challenges in the coming years. Knappa, like Astoria, has seen a decline in enrollment, impacting its share of the State School Fund. Jewell’s financial future remains uncertain as it eyes the impact of the state’s habitat conservation plan, which is projected to reduce revenue due to a decline in timber harvests on state forestland.

Additionally, some school districts are anticipating cost increases as a result of Senate Bill 489, which was approved by the state Legislature and signed into law by Gov. Tina Kotek last year and expanded the number of classified school workers who can apply for unemployment benefits during school breaks.

“When the Legislature passed that, I don’t think they even realized that school districts would foot the bill,” said Knappa superintendent Bill Fritz.

The challenges mean that school districts are looking closely at what to prioritize in upcoming budgets — and what to postpone for a year or two. In Astoria, the school board agreed earlier this month not to move forward with a U.S. Coast Guard Junior Reserve Officers’ Training Corps program in light of funding concerns.

“We’re not adding programs right now,” Hoppes said. “(We’re) just supporting what we have to see if we can make them all work.”

What can’t wait, school leaders emphasized, is supporting students’ mental health and well-being.

“We’re seeing in our schools now, as compared to pre-COVID, (students) have more needs,” Fritz said. “There’s more social (and) emotional needs. There’s more counseling needs … We’re trying to figure out ways to reconcile those additional student needs and a reduced ability to provide staffing.”

Rogozinski echoed the sentiment.

“I think continuing to invest in those areas, even when the money starts getting a little bit tighter, is critical,” he said.