News Every Day | 03:26

Lake Oswego joins growing list of Oregon school districts facing major budget deficits

PORTLAND, Ore. (KOIN) – Shortly after Portland Public Schools and the Corbett School District announced multi-million dollar shortfalls, Lake Oswego has just joined the growing list of districts in the red.

Lake Oswego recently announced they'll need to layoff employees to make up for a $12 million shortfall projected for the next school year. This is a substantial amount, as the district expects it will have to cut nearly 10% of its annual budget to stay in the green.

This announcement comes despite the nearly 11% increase in education funding outlined in Gov. Tina Kotek's recent budget.

In a letter to staff, Superintendent Dr. Jennifer Schiele said, “Unfortunately, while the proposed state school funding is an increase, it falls approximately $12 million short of what LOSD needs to maintain our current services."

Beyond inflation, Dr. Schiele said the district’s financial woes are largely due to a spike in Public Employees Retirement System (PERS) costs. She said the projected $5 million in PERS expenses is almost double what the district expected to pay.

"We're actually thinking it would be a 3% increase. So, 7.6% it's about a $5 million cut for us before we even start,” Dr. Schiele said.

And it seems districts may be on their own when addressing PERS. When asked what the governor plans to do to address the financial squeeze on districts, Gov. Kotek said in a statement, "Oregon families rely on our school districts to offer students a quality education. Accurate, responsible budgeting is a core component of meeting that expectation."

Gov. Kotek added, "I urge our education partners and school districts that do not have side accounts sufficient to cover the recent increase in PERS to explore all possible options to address the increase instead of directing their needs solely to the state."

The district told KOIN 6 News they are prioritizing minimizing classroom impacts, though staffing decisions won't be finalized until May next year.

“Our students and our families have had real needs, and we've addressed those with having more people and more supports for them so they could be successful,” Schiele said. “What's sad about all of this is that's what has to go away when we kind of reset our force."

Meanwhile, the superintendent said it's too early to know which positions, how many, or when those cuts will be made — but acknowledged that this is difficult news for anyone to hear.

"Here in Lake Oswego, we're a family, and this is really reducing people in our family, and that's really hard to do,” Schiele said.

However, Schiele shared the following "Reduction in Force" timeline:

January

January 13: RIF Notice - To be approved by the School Board
January 21: Long State Legislature Session Begins
Ongoing: Budget discussions
- Initial conversations with LOEA and LOSEA regarding budget realities
- Updates shared with schools and the community regarding budget realities

February

Ongoing: Budget discussions
Review the RIF process with LOEA and LOSEA
February 24: Renewal/Non-renewal lists to be approved by the School Board

March

Ongoing: Budget discussions
RIF round #1 employees notified
All licensed staff are notified no later than March 15 of renewal/non-renewal and temporary decisions
- Renewal letters will include language addressing the possibility of RIF
Forecasting and staffing data for the 2025 school year due

April

Ongoing: Budget discussions
Continued conversations with LOEA and LOSEA regarding budget
LOEA negotiations
Identification of position reductions for the 2025-26 school year
Determination of RIF (order of seniority of staff)
Late April/Early May: RIF letters will be issued to staff after staffing decisions are finalized

May

Ongoing: Budget discussions
Final LOEA negotiations
May 23: RIF round #2 employees notified
Late May: June State Revenue Forecast released - determines State’s 2025-27 Spending Cap

June