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Portland Public Schools is scrambling to patch an unexpected $14 million gap in its current year budget, which its leaders say requires cuts to both the central office and the hours of employees working with students.
This week, district officials revealed the first details of how it will reduce costs in the central office. But affected unions, including the Portland Association of Teachers, appear unimpressed. PPS is still negotiating furlough days with all six of its unions, and PAT now pledges to conduct its own audit of district finances.
The district is facing a $22.5 million projected shortfall in its current budget, said Michelle Morrison, the district’s chief financial officer. At a Feb. 24 meeting of the Portland School Board, Morrison told board members that the district had managed to identify $12.5 million in savings, leaving them with a $10 million gap to fill.
By late last week, it appeared the district had identified less savings than previously anticipated, and officials upped the gap to $14 million. “We identified a list of things we could potentially change between now and the end of the year,” Morrison told reporters on March 10. “And as we analyze those, we decide how practical they are, what actual savings would be…that’s why that number is shifting around a little bit.” (Some examples of measures that make up PPS’s $8.5 million identified savings: controlling discretionary spending, limiting hiring, and taking a more stringent look at maintenance and transportation budgets.)
The first measures to close the budget hole are coming from the central office. In a Monday email to PPS staff, shared with WW, PPS Superintendent Dr. Kimberlee Armstrong outlined what she termed “phase one” of furloughs and organizational restructuring at the district level. Armstrong will take six furlough days and senior level staff, directors and managers will take five furlough days, resulting in about $1.2 million in savings.
But as officials continue to modify their estimations of how much money is needed to patch the hole, there’s growing distrust from some key labor partners. In the span of two weeks, the district went from offering PAT options of two furlough days or more than 100 layoffs to patch the deficit, to options of four furlough days or more than 200 layoffs. “It is clear that much greater clarity is needed on PPS’ financial situation before any agreements can be made,” a Monday night PAT statement read.
The union announced Monday that it is working with the Oregon Education Association, the statewide teachers’ union, to conduct a budget analysis of PPS’s finances, and will propose alternatives to cutting student-facing positions. The unions have engaged financial experts.
Michelle Morrison, the district’s chief financial officer, said Tuesday morning that she expects the mid-year deficit will have consequences for the $50 million budget shortfall the district faces next year. “We do expect that number to grow,” she said. “We haven’t identified anything beyond that $50 million yet…but that is the floor at this point.” An increased deficit could result in layoffs beyond the 288 proposed in an early budget proposal draft.
Armstrong’s email also said that the district is right-sizing its academic division, consolidating senior leadership and clarifying reporting structures. That should result in the reduction of 13 licensed administrative roles, saving about $2.75 million. As part of the restructuring, however, it appears some employees in the central office will have the chance to reapply for “several new or substantially redesigned leadership positions.” Those savings would not help address the current budget gap this year, says district spokeswoman Sydney Kelly, but would help with next year’s forecasted budget deficit.
The teachers’ union, which is also currently undergoing contract negotiations, indicated declining confidence in PPS’s administration’s work to patch the budget deficit, terming central office restructuring “rearranging the deck chairs.” “Our trust in PPS’ ability to navigate their financial realities has been broken, and our good faith feels taken advantage of,” their statement read.
Dr. Angela Freeman, the district’s chief human resources officer, confirmed on Tuesday morning that negotiations with all six affected labor unions were still ongoing. At this time, it’s unclear what furlough days unions might agree to, and how that might affect student instruction. The district has shared with unions, Freeman said, that it intends to put students first.
“We’re really trying to make sure that we come to an agreement as soon as possible so that we can give as much lead time to our families and community, if there’s going to be an interruption to student instruction,” Freeman said.
Armstrong said she anticipates two additional phases of cost savings measures for the central office.
“Every human in our district does work that impacts classrooms. We just can’t afford to employ the number of people that we’ve employed before,” she said. “We’re in this uncomfortable situation where we need to be responsive to our budget, and that means we need to do some things differently. We need to be a little tighter in the way in which we fund our programs and the ways in which we staff here at the central office, as well as in our schools.”
