With schools out until next fall, Portland Public Schools' 350 yellow buses are parked like a swarm of oversized bees, one pretty much the same as next.

But the COVID-19 pandemic has split the district's nearly 260 bus drivers and mechanics into two very different groups.

For 186 of them, who work for First Student, the district's transportation contractor, Gov. Kate Brown's initial schools closure March 12 meant a trip to the unemployment line. "March 13 was pretty much our last day," says Anna Tompte, a representative of Amalgamated Transit Union Local 757, and a contracted school bus driver.

But the 72 drivers who are PPS employees, rather than contractors—they are still on the district payroll. (The district uses its own employees to transport its most vulnerable students, those with special needs.)

When Brown closed schools March 12, her executive order required that districts "continue to regularly pay all employees of public schools." (PPS has about 8,500 employees. About 7,000 are represented by a union.)

For now, those drivers are idle. And many are sitting at home. "They said we might be delivering food or supplies for students who are home," says Jimmy Appelhanz, an ATU representative for the drivers who are full-time district employees. "But we haven't started doing that yet."

The divergent fortunes of Tompte and Appelhanz are a microcosm of the enormous challenge for school districts, and state and local governments, as top leaders attempt to deal with the effects of COVID-19.

Elected officials, from Brown to the boards of the state's 197 school districts, are keen to protect the public employees on whom Oregonians rely. But in private conversations and public memos, those officials are beginning to acknowledge that protection cannot last much longer.

The unprecedented job losses COVID-19 has caused—270,000, and rising fast, 13 percent of the state's workers—have fallen almost entirely on the private sector.

That sector is, of course, the source of most of the income taxes that provide the bulk of K-12 funding in Oregon.

But it seems just a matter of time before public employees start losing their jobs in big numbers. The Oregon Legislature, which sends those income tax dollars to PPS and the state's 196 other school districts, has not issued any guidance on spending yet. Brown and lawmakers are in limbo, waiting for the May revenue forecast.

"The governor and legislative leaders are in agreement that the state needs to be extremely prudent with resources," says Brown's spokeswoman Liz Merah. "We will provide additional direction once we have a better picture of the revenue forecast in May and more details and guidance about Oregon's share of the federal CARES Act."

State Sen. Arnie Roblan (D-Coos Bay), co-chairman of the Legislature's Joint Special Committee on Coronavirus Response, says lawmakers are being told to expect a $2 billion to $3 billion drop in biennial revenue in the May forecast.

"That's what I'm hearing," Roblan says. "It's going to be really bad."

Some governments have already acted: Metro, which depends on revenue from the Oregon Convention Center, Oregon Zoo, Expo Center and other shuttered facilities, laid off 40 percent of its workforce. The Port of Portland has announced furloughs, and the state's universities are laying off workers. And the city of Portland laid off 900 temporary and seasonal Portland Parks & Recreation employees.

But Portland will almost certainly have to do more. Officials say the city is looking at the same kind of hit the state is: $100 million for the fiscal year beginning July 1, a nearly 20 percent cut.

On April 14, the city's chief administrative officer, Tom Rinehart, announced the first actions the city would take to cut costs in the face of sharply lowered revenue.

Rinehart said the city would freeze pay and cost-of-living increases for its 1,700 non-union employees. Those employees will also have to take 10 furlough days between now and Oct. 7. Mayor Ted Wheeler will also forgo his salary for the rest of the calendar year, saving about $95,000.

But to find bigger savings, Wheeler faces the same challenge Portland Public Schools and other public sector employers face: Most city employees have union contracts. (Nearly three-quarters of the city's 6,300 full-time employees belong to a union.) Making changes to those employees' compensation or working conditions requires consultation and agreement from labor leaders, whose cooperation is required to reopen contracts that have already been bargained, signed and implemented.

"We have begun this conversation with our labor partners as well," Wheeler wrote in an April 10 memo to bureau directors. "We are in discussion about many of the same strategies—a freeze on merit, COLA and other pay increases, and furloughs. They have been good partners in these conversations, and we hope to reach broad agreement about these approaches before my proposed budget is released at the end of this month."

The two bureaus that account for the lion's share of personnel costs, the Portland Police Bureau and Portland Fire & Rescue, are the last to be cut in a normal recession. That's doubly true now: With the pressure COVID-19 is putting on first responders, those budgets will be heavily protected if cuts are required this time.

If Wheeler and the Portland City Council are forced to ask unions for pay cuts, furloughs or layoffs, the weight of such measures is likely to fall on non-sworn workers, such as members of the American Federation of State, County & Municipal Employees, which represents 950 city workers.

AFSCME representative Bao Nguyen says preliminary talks with city management have been constructive. "We are open to conversations about furloughs and COLA freezes," Nguyen says. "As we look at the dire financial picture, if they are needed, we are not going to put up a wall."

The demand for government services usually increases during a recession, but the ability to pay for those services—whether it's schools or social workers or building inspectors—declines.

"They explained it to us last week that most of the budget is based on income tax," says Appelhanz, the PPS driver who's hoping to keep his job. "But if everybody is unemployed, then where's the money going to come from?"