PPS Offers Unions Furloughs or Layoffs to Patch $10 Million Mid-Year Budget Gap

Portland Public Schools is negotiating with several of its labor unions as it looks to patch an unexpected $10 million mid-year budget gap, presenting most with the choice to furlough or lay off large numbers of employees.

The district has offered unions the options of two furlough days or hundreds of layoffs. The district estimates each furlough day would save about $3 million. In the other scenario, Oregon Public Broadcasting reported today, the Portland Association of Teachers would face 170 layoffs. An email from the Portland Federation of School Professionals to its members says about 100 employees in their ranks would be laid off.

If it comes down to furloughs, PAT is advocating for tiered furloughs that would apply based on pay scale, ensuring the lowest-paid employees are insulated from housing or food insecurity.

“Our membership will be voting on a Memorandum of Agreement to accept two furlough days in efforts to assist in sharing the impact this additional funding shortfall will have on PPS,” a PAT statement reads.

The multimillion dollar shortfall this academic year is separate from the $50 million deficit the district will face in the upcoming fiscal year.

The projected shortfall this year comes from a number of factors, PPS’s chief financial officer Michelle Morrison told School Board members on Tuesday. Among them: lower than expected revenue from the local option levy that funds teachers, seven emergency facility declarations that required costly and immediate repair, and unanticipated costs from several federal lawsuits. Much of that information became available in the second quarter of financial data, Morrison told board members, noting it’s when the district confirms enrollment numbers and receives local revenue numbers.

Morrison told board members that in the past few years, there was flexibility to absorb some midyear impacts, including through fund balance or federal funding. “In the [budget’s] fragile state there’s not room to absorb [the variances],” she said.

In planning for the current year’s budget, the district planned for low reserves, implemented spending restrictions, and froze most hiring in the central office. Based on actuals from July to December, PPS actually projected the gap to be $22.5 million, but has found “discretionary savings” totaling $12.5 million. In other words, PPS says many classic places to find an extra dollar have already been considered and used.

Unions have said PPS could realize cost savings without either layoffs or furtloughs. A Friday statement from the Portland Association of Teachers asserted that PPS “has a myriad of opportunities to reduce this deficit without hurting instruction or employees.” PAT has suggested the district explore its contracts and cancel duplicative ones, and took specific aim at eliminating a PPS artificial intelligence contract.

Multiple unions are also asking for more clarification into the data that surrounds the unexpected deficit, including where the district realized $12.5 million in cost savings and for second quarter numbers.

PPS Superintendent Dr. Kimberlee Armstrong says the central office is taking immediate actions to cut costs, including canceling a supplemental training day scheduled for Monday, and she expects her cabinet team will take several furlough days.

But she noted that the percentage her administration represents across the district is small.

The unions are also turning a critical eye toward state legislators, who have so far not budged on tapping emergency reserve funding for education as advocates had hoped, including the Educational Stability Fund. (That fund currently holds about $1 billion, and can be tapped during times of budget crisis.) On Tuesday, School Board members mused about what that money could change. “There’s a billion dollars, and we don’t even need that much,” vice chair Michelle DePass said.

When asked about school funding at a Tuesday press conference, Oregon Gov. Tina Kotek said the legislature is not taking up any reserves right now.

“The way the legislature has landed is that, let’s make sure we can maintain the budgets that were passed last year,” Kotek said then. “We also know it’s a difficult time for some of our school districts who are facing cuts. I don’t anticipate additional dollars outside the current budget for our schools and universities.”