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Portland Public Schools and its teachers union, the Portland Association of Teachers, have called on the state to tap a $1 billion education reserve fund as the district stares down a $56.3 million deficit in the upcoming year.
Under Superintendent Dr. Kimberlee Armstrong’s proposed budget, that means cuts to 336 full time employees across the district. Angela Bonilla, the president of PAT, said in a statement that 180 of the proposed layoffs are educator positions.
The reserve, known as the Education Stability Fund, is funded by proceeds from the state’s lottery and is meant for times of economic downturn in the state. Tapping the fund either requires specific economic conditions be met (think, for example, revenue forecasts that indicate lower-than-projected General Fund numbers) or a declaration of emergency from the governor. In both cases, it is a joint effort: Three-fifths of the Legislature must sign off on any spending.
Since even before the 2026 short session, school districts and their supporters have been advocating for the release of ESF dollars, as many across the state face budget deficits and have found themselves slicing services, or resorting to furlough days. But there didn’t appear to be much effort among legislators, or Gov. Tina Kotek, to tap the fund. The governor in February said the legislature was committed to maintaining budgets for school districts approved in the 2025 long session.
“I don’t anticipate additional dollars outside the current budget for our schools and universities,” Kotek said then. “The legislature is not taking up any reserves.”
WW was not immediately able to reach Kotek’s office for comment today.
The plea to access funds comes even as the legislature managed not to cut school budgets and as the State School Fund saw a $600 million increase in the 2025–27 school year. PPS’s budget woes stem from declining enrollment, expensive pension rates, and increasing personnel costs, to name a few factors.
At a Wednesday press conference, district leaders made clear their demand is still for the state to tap the ESF. Deborah Kafoury, PPS’s chief of staff, said the district is working to explain to leaders in Salem what will happen if schools can’t access those dollars.
PPS would apply the reserve dollars, Kafoury said, not as one-time funds to patch a structural deficit, but more strategically to smooth budget cuts over the years. She says the district is in active conversations about how these funds might specifically be used to patch growing Oregon Public Employee Retirement System costs.
“That’s just one of the many, many ideas that are out there about how to use [ESF dollars] strategically, so that we’re not just digging ourselves a bigger hole next year,” she said.
The PAT was more fiery than district officials. In a statement, Bonilla said that PPS would not be able to “absorb the devastation” of the proposed layoffs of educators across its schools, and urged Kotek to call a legislative special session around school funding.
In recent months, the Oregon Education Association, the statewide teachers union, has been at odds with the governor, opting not to endorse her re-election campaign. Bonilla had her own gripes a few weeks ago, when Kotek released an executive order around instructional time.
“Tina Kotek is inflicting generational trauma on PPS students and school communities across Oregon with her cold indifference and petty refusal to allow local districts access to $1 billion in existing state relief funds,” Bonilla said. “Kotek has two choices: Cement her role as the most unpopular governor in Oregon history or step up and deliver the leadership Oregonians elected her to bring.”
