Fiscal Stability

Budget Update: Hopeful News…

Last school year, we faced a $15 million budget shortfall over two years, which led to $7 million in cuts during our June budget process. Over the summer, we received promising news that could help prevent further reductions. Governor Kotek's proposed "reset" to Oregon's school funding system could add $515 million for 2025-2027, potentially addressing rising costs and allowing MSD to remain status quo for now. However, this plan still requires legislative approval. Advocating for sustainable school funding is crucial, and we are gauging if there is interest in forming a parent/citizen team to support this effort.  If you’re interested, please click here.

June 21, 2024

Here is a brief update on our budget situation. 

Budget Adopted

Last night, the MSD Board of Directors adopted the 2024-25 school year budget, which includes $7.5 million in reductions. While these cuts are difficult, we are grateful they only resulted in three layoffs. We held tight to our priorities of:

1. Preserving our high-quality classrooms, including the educators who support them, as well as our curriculum

2. Safeguarding student wellness

3. Ensuring continuing innovation

4. Keeping safety and security as our foundation

 

You’ll recall the cuts are a result of financial distress experienced by districts across the state and are due to several factors, including:

• Inadequate funding to keep up with inflation 

• Inadequate funding to meet student needs, such as the continued lack of funding for special education while costs increase significantly

• Declining enrollment

• Unfunded state mandates

At the Board meeting, the Board discussed several options moving forward, as we’re still left with another $8 million deficit next year, given current state funding. Options under consideration include elementary school consolidation and asking voters to approve a local option levy.  In the fall, we will present a plan to the Board, and if we do move forward with consolidation or a local option levy, we will ensure that the public has opportunities to provide feedback. Note: There will be NO changes to schools in the 2024-25 school year.

While we won’t know the amount provided by the state until next Spring, we believe it’s important to do everything we can to improve the state funding model for public education. 

Legislative Priorities

We are working with members of our unions and other districts across the state, calling on state legislators to prioritize properly funding public education. Our legislative priorities are:

• Fund sustainable, high-quality public education. 

State School Fund allocations simply must account for a higher percentage of the state’s budget to support the needs of Oregon students adequately. 

• Increase the cap on special education (SPED) funding. 

The cap on funding special education was created in 1991 at 11% and remains at that level today. Statewide, 15% of students qualify for SPED services. MSD’s funding gap in SPED is $7 million this year alone.

• Stop passing unfunded mandates. 

New laws, without consideration of money to comply with those laws, means required increased spending. Examples: SB 819, Paid Leave Oregon, new unemployment laws.

You can learn more about our budget, including frequently asked questions, by visiting our fiscal stability website. 

Thank you, 

Bret Champion
Superintendent

Transparency is one of our shared values, and in the midst of the funding issue affecting Oregon School Districts, we want to make sure you saw some updates we presented to our Board last night. View this video or read on!

One report centered on enrollment trends, how new apartments affect enrollment projections, and information on MSD facilities. Another report focused on our Coherency Plan and the staffing added to support it. You can read the highlights below.

For more details on the budget process, background, and proposed reductions, visit our fiscal stability website. 

Thank you for supporting our students!

Bret Champion
Superintendent 

Enrollment & Class Size

As you’ve heard from us a few times now, our enrollment at the elementary level is declining due to moving sixth graders to middle school, families making other choices (particularly homeschooling), and a decrease in births. Not everyone will notice the decreased enrollment in their classrooms, especially at the middle and high school levels. Why does enrollment matter? For several reasons. We are funded on a per-student basis. Part of our strategy to balance the budget is to adjust staffing to align with the number of students we have. Because of this, our current projections are that the proposed cuts WILL NOT impact class sizes. We currently have class sizes that are historically low and are within the threshold agreed upon by our teacher’s union. Click here to view class size projections for the 24-25 school year. It also matters because as we look to be responsible fiscal stewards and potentially consolidate schools, we need to look at the additional capacity we have at each building. 

We’ve had a third-party demographer conduct a long-term study on our enrollment. If you’re interested in reading it, click here. 

New Apartments in Medford & Enrollment

We’ve received a few questions about new apartments popping up in Medford and whether that will impact enrollment. According to the City of Medford Planning Department, although Medford is seeing a surge in new apartment construction, it's important to note that most of these units are tailored toward smaller households, with a limited number of larger units suitable for families. Additionally, the demographic landscape of our community is evolving, with a significant portion of new residents being retirees who typically do not have school-aged children.

Even in traditional single-family neighborhoods, there's been a noticeable shift. Middle-aged couples, often with children who have already graduated, are increasingly attracted to our area due to the rise in remote work opportunities. Many of these individuals have relocated here after selling their homes elsewhere, drawn by Medford's relative affordability, and therefore have no ties to our school systems.

View a report from the City of Medford on this topic here. 

MSD Facilities & Spending

We’ve received a few questions about which buildings we own and which we lease. Here’s a list of our properties. Some important points:

• We renovated the old South Medford High School on Oakdale Ave. and turned it into a middle school based on community-led 2018-19 Facilities Optimization Committee input. At the time, our elementary schools were overcrowded, and moving sixth graders to middle school was an effort to create space, lower class sizes, and provide more opportunities for sixth graders. The committee wanted MSD to use all of its buildings before going to voters for additional funds. The work at Oakdale was phased over multiple years and self-financed by the MSD with a full faith and credit bond and an allocation of elementary and secondary school emergency relief (ESSER) funding to help offset the total cost.  

• When construction began at Oakdale, district offices and the old Central Medford High School were located there. We entered into several leases to relocate Central and the district offices (the latter spread over several buildings). 

• In 2023, we purchased the property on Center Dr. to create Innovation Academy. Innovation Academy is intended to fill the needs of students and families who desire something different from traditional high school education. The investment in the IA property was made with funding from our reserves. Our reserves remain healthy and are above the Board set level of 5% of our total general fund balance. 

• In 2021, we purchased the building on Bartlett Street using ESSER funds. It was originally used for online school, reaching its peak enrollment immediately after the pandemic. Medford Online Academy is now co-located with Innovation Academy at the Center Drive location. We use the building on Bartlett today for Special Education Administration and services. Our Medford Opportunity School is also at this location.

Coherency Plan & Staffing

In 2019, we convened a group of staff, families, and community members to help guide our work. We created this document, which is our strategic plan. We’ve received several questions about staffing increases over the last several years. This document outlines the staffing we added since 2019 and how their roles support the work. 

 

As we’ve said over the last few weeks, we are in the process of making some really difficult decisions about our budget.  

Funding Issues & Priorities

Several factors are creating financial distress for Oregon school districts, including: 

• Inadequate funding to keep up with inflation 

• Inadequate funding to meet student needs, such as the continued lack of funding for special education while costs increase significantly

• Declining enrollment

• Unfunded state mandates

In the Medford School District, these factors force us to reduce our budget by $15 million over the next two years. 

This is difficult, and we are doing everything we can to protect the student experience as much as possible. Our priorities in this process are:

1. Preserving our high-quality classrooms, including the educators who support them, as well as our curriculum

2. Safeguarding student wellness

3. Ensuring continuing innovation

4. Keeping safety and security as our foundation 

Year 1 Cost Reductions

Today, we wanted to let you know how we are proposing to address the deficit. We will be putting forward a budget to our budget committee, which is made up of appointed community members (including MSD parents), that includes $7.5 million in proposed cuts for the next fiscal year. As we are currently deficit spending in this current year’s budget, we also propose spending down reserves by $1.9 million to soften the blow. The remaining cuts will be made in year two, the 2025-26 school year.

Staffing Reductions

The total staffing reduction is 32.5 positions:

• District-level administrators will be reduced by 12.1%

• School-based administrators will be reduced by 8.2% 

• Confidential/Manager/Supervisors will be reduced by 5.9% 

• Certified Staff (Teachers) will be reduced by 2.5% 

• Classified Staff will be reduced by 0.9%

Of course, the most important factor in the student experience is a high-quality classroom teacher, so we worked to avoid affecting that position as much as possible. The largest number of these shifts are due to our lost enrollment since COVID-19, specifically at the elementary level, where the number of students we serve is down 24% since 2019. Because of this, many of our school-based adjustments are typical for this time of year, balancing our staffing to match the number of students in classrooms and programs. 

Additionally, you will notice within the proposed reductions that while we will be keeping our libraries open and staffed, we will no longer have teacher librarians in our secondary schools. Our classified media technicians will manage libraries for the same number of hours of operation.  There will be one K-12 Library Media Specialist to support this restructure.  

In other areas, we are not moving forward with planned construction at Innovation Academy, we are reducing the amount of funding to our preschool partners, we are reducing our summer programming, and we will not be expanding our school marshal program beyond what we already have. The full list of proposed reductions can be found here. 

Continued Reductions & Fiscal Responsibility

While these cuts are challenging, year two will be even more difficult as we must reduce the budget by around another $8 million. 

As mentioned above, MSD and districts nationwide have been experiencing declining enrollment since COVID-19. MSD has seen a 24% decrease in elementary enrollment since 2019. These decreases are due to lower birth rates and families choosing other options, particularly homeschooling.  

We have several elementary schools that have dropped to under 300 students when their physical capacity can accommodate significantly more students. Maintaining underutilized schools creates an added financial burden on the school district budget, money that could otherwise be used to enhance the student experience. 

To optimize our facility needs, we will begin evaluating how best to consolidate some of our elementary schools. The analysis will take place in the fall of 2024, with an anticipated announcement around early 2025. At this time, we believe we need to consolidate two elementary schools for the 2025-26 school year. More information on the process and opportunities for community input will be shared in early fall 2024. 

Call to Action 

We know this information can feel disheartening, and it is heartbreaking. That is why we need to come together for our students and public education as a whole and ensure our legislature properly funds public education.

The percentage of state funding public schools in Oregon receive has decreased over time, even as our needs have increased. 

We have information on contacting your local legislator and some talking points you can utilize here.

Thank you for supporting students and educators in the Medford School District. 

Bret Champion
Superintendent 

 

Greetings MSD Community,

As you have heard, we are currently facing the need to trim our budget by $15 million over the next two years.  It's heartbreaking to find ourselves in this situation due to the state's approach to funding public schools. However, I want to assure you that we are committed to transparency in our budget communication, especially during these times of fiscal uncertainty.

Currently, we are in the early stages of budget planning, with more details expected by the end of April. Our first budget meeting is scheduled for May 2nd.  

As is true every year, adjustments due to next year’s enrollment are already underway.  While we anticipate additional adjustments in various areas of our system, we will be guided by our priorities: 

• Preserve High-Quality Classrooms: Preserve the quality of education our students receive, including supporting our educators and maintaining our curriculum.

• Safeguard Student Wellbeing: Assisting students in their mental and behavioral health.

• Continue Innovation: Sustaining innovative approaches in our schools. 

• Maintain Safety and Security: Maintaining our rigorous focus on student, staff, and community safety and security.

It pains me to acknowledge that the exceptional work we do for our students may be impacted. 

I urge all of us to advocate for K-12 public education by voicing our concerns to our legislators.

Your support and understanding during this time are greatly appreciated. We will continue to keep you updated as we progress through the budgeting process, and all of our prior messages and FAQs can be found here.

Thank you for your continued partnership in providing the best possible education for our students.

Gratefully,
Bret Champion

April 12, 2024

Greetings MSD Families,

Every year around this time, school districts go through the budget process. We are committed to keeping you informed throughout the budget season with communications like this one. 

In recent years, the Medford School District, like many other school districts across Oregon and the United States, has faced significant financial difficulties, with a projected $15 million deficit expected over the next two years. We understand the concerns this may raise among our families, and we want to ensure transparency and open communication as we navigate these challenges while minimizing the impact on students.

Budget Challenges

You may be wondering why our district is facing this deficit. Here are a few reasons:

• The State of Oregon does not fund schools based on inflation. We tend to get increases of 3-4% from the state annually. This year, employees received a well-deserved cost-of-living adjustment above that amount, with a portion of our staff receiving an additional step increase of 2.5% to 3.5%. 

• MSD is experiencing a decrease in enrollment, which affects our bottom line. Our enrollment dropped over 23% in elementary schools and 7% districtwide since COVID-19. Birth rates are also declining statewide, making the enrollment issue more challenging in the long term.

• We have growing needs in special education that are not fully funded by the state. The unfunded portion of SPED amounts to around $7 million.  

We are a people business, with 80% of our general fund made up of salaries and benefits. In the coming weeks, we will be forced to make some difficult decisions to balance the budget. 

 

Summer Programs Changes

And speaking of challenging decisions, despite MSD running successful summer programs for years, the State of Oregon has not allocated any funds to the Medford School District for summer programming this year. This surprised us, considering that the State passed new legislation that creates $30 million for summer learning in 2024. 

We are working to determine what we can offer with the funds we currently have in place. 

If you have signed your student up for one of these programs, we will contact you directly in the next two weeks to let you know what changes we expect for the program in which you are currently enrolled. If you have yet to sign up, please wait for more information from us. We will send an update as soon as we have it. 

It's disheartening that the State of Oregon's failure to allocate funds for summer programming has put us in this challenging position. We apologize for any inconvenience this may cause and assure you that we are working diligently to ensure the best possible outcomes for our students. 

Overall

We recognize all of this information may raise questions and concerns among our families, and we want to assure you that we are exploring all available options to address our budgetary shortfall while maintaining the quality of education and support services for our students. 

To learn more about our financial state, please visit our Fiscal Stability Webpage.  As more information is available, we will make sure it is communicated in a clear and timely manner.

In order to continue to live into our shared vision that ALL are learning and learning is for ALL, we NEED sustainable funding from the State of Oregon. We will ALL need to work together and call on lawmakers to ensure that schools and student well-being and success are a priority. 

Stay tuned for more information soon.

Gratefully, 
Bret Champion
Superintendent
Medford School District