Medford School District 549C
Superintendent Champion's Budget Message
May 2, 2024
Superintendent’s Message:
I am pleased to present our budget message for the 2024-25 school year. Thank you to the members of the Medford School District Budget Committee for their service, support, and consideration of this Proposed Budget. We appreciate your guidance and support in the development of this budget as we work to meet the needs of our students in these unprecedented times. I am also grateful for our incredible, hardworking educators and the support of the community we serve, and wish to acknowledge the challenges faced by so many people in our community in the past year.
The Medford School District has a shared vision that ALL are learning and learning is for ALL. To help guide our work, we have a set of guiding documents that describe our strategy, provide measures of the system, set aspirations for students, and define leadership in the district. We continue to value collective effort by building projects around our top priorities. Each year we reaffirm our priorities, and the list for the 2025-26 school year can be found on pages 7-8 of tonight's budget presentation.
I am amazed at how much the Medford School District accomplished this past year. We opened Oakdale Middle School and Innovation Academy in the fall. We rolled out our new English language arts curriculum, designed and written by our amazing teachers. We were able to add additional resources to special education programs and made strides toward better managing challenging student behavior systemwide. I continue to be grateful for the impressive work by dedicated staff in every area of the Medford School District and we are seeing early signs of improvement in reading and student engagement because of it.
Safety and security are among our shared values. Last June, we hosted a community-wide, multi-agency exercise to test our ability to respond to an active shooter incident. Over 400 volunteers participated in this one-of-a-kind event, which showcased our commitment to keeping our schools safe and secure. We also provided a full day of safety training for our entire staff before launching the school year and rolled out our school marshal program to complement our already strong school resource officer presence.
We have all heard about students who are struggling for a variety of reasons and cause disruptions in classrooms. Some students tell us they do not feel engaged in school. It is disheartening to see students struggle to find purpose in school today, some three years post-pandemic. I talked about these issues last year as well. While we have seen improvement, we continue to work on creating a positive culture and climate and increasing student engagement opportunities to foster improved student learning.
Unfortunately, public education is in crisis nationwide as districts wrestle with declining enrollment and unfavorable public perception. Birth rates are down worldwide, and Oregon, in particular, is one of the states most impacted by the trend in the United States. These lower birth rates and increased availability of education alternatives for families have pushed down public school enrollment. This factor, coupled with less than adequate state funding because of competing priorities, is making matters worse. In the budget message last year, I spoke about these challenges and they continue to grow in size and complexity today. At the same time, it is increasingly difficult and more expensive to educate students.
Our districtwide non-charter enrollment has dropped by nearly 1,000 students since 2018-19, the last full school year before the pandemic. Most of the drop in enrollment so far has been in our elementary schools, where enrollment has been down by over 1,600 students (24%) since 2019. Our middle and high schools are currently up slightly in enrollment by comparison; however, as elementary-age students advance to middle school beginning in 2028-29 and high school beginning in 2031-32, these numbers will also fall. We know the decline in enrollment will continue for at least five years because births have been down for the past five years. A recent professionally prepared demographic analysis projects declining enrollment for many years beyond five years in our school district.
We are not funded based on inflation. At the same time, inflation has impacted all of us as individuals and has impacted our financial condition in the district. Cost of living increases in pay, and inflationary increases in utilities, insurance, purchased services, supplies, and materials have outpaced our funding increases. Based on projected revenue, we expect this to be true in 2025-26 as well.
Unfunded state mandates impact our bottom line. The state reimbursement rate for special education was set decades ago and is capped at 11% of our student count. This has been a challenge for the district for many years as the number of students receiving special education services as a percent of our total student population is closer to 16%. This equates to a $7.1 million deficit for our district in this area alone. To be clear, we have an excellent special education program and provide all the required services. We just do not get fully reimbursed for it. Oregon recently approved unemployment benefits for our hourly employees who are not scheduled to work during spring, summer, and winter breaks. We expect this to add about $1.2 million in costs. The Oregon Paid Leave program has added another $0.4 million annually. While we support fair benefits for our employees, when they are unfunded, they result in reduced services for kids.
Next year is the second year of the state biennial cycle, and our funding in the General Fund will increase by 3.6%. The following year's increase is expected to be less than 2% based on the very-early state school fund estimate. These combined increases will not be enough to cover our growing costs, meaning we must reduce our spending by $15 million over the next two years.
To summarize, our financial condition includes:
- Declining enrollment
- Unfunded state mandates
- Inadequate funding to keep up with inflation
- Inadequate funding to meet student needs
As to the details in the budget, the 2024-25 Proposed Budget is a deficit budget that supports our priorities, which are:
- Preserving our high-quality classroom, including the educators who support them, as well as our curriculum
- Safeguarding student wellness
- Ensuring continuing innovation
- Keeping safety and security as our foundation
We have reduced our expenditures by $7.6 million in this budget proposal and propose using $1.9 million in reserves to balance the budget.
The budget includes a net reduction of 32.5 FTE to align with lower enrollment and also as an important first step to weather the headwinds mentioned above. The reduction in FTE nets approximately $3.6 million in cost savings. The reductions as a percentage by employee category are 12.1% of district-level administrators, 8.2% of school-based administrators, 5.9% of confidential/managers/supervisors, 2.5% of teachers, and 0.9% of classified employees. Most of the reductions will be done through attrition and/or by reassigning employees where possible. We are also moving 10 FTE from the General Fund into other grant funds to maintain as many services as possible this year. This shift helps the general fund budget by $0.6 million. There are other reductions of $0.75 million in contracted services with third-party providers, $0.35 million in Summer School, and other reductions totaling $0.25 million. One of the largest reductions is in contracted services in our preschool program that resides in six of our elementary schools, the Ivy School.
In addition to the reductions noted above, we are reducing the amount we spend on capital projects by $2 million. For the 2024-25 school year, this will impact our plans to build classrooms in our Innovation Academy location. In the long run, if we cannot resume normal spending to repair and maintain our facilities, it will lead to deferred maintenance and more costly solutions in future years.
Student Investment Account (SIA) and High School Success Act funding remain strong. One-time Elementary and Secondary Emergency Relief (ESSER) grant funds will expire on September 30, 2024.
The 2001 Legislature established the Quality Education Commission (QEC) in statute to determine the amount of K-12 funding needed to meet the state’s quality education goals. Since that time, the state has never funded K-12 education at the recommended level. For the current 2023-25 biennium, actual K-12 funding is $1.525 billion or 13% below the QEC recommended funding level. Every school district in Oregon is making the case to the legislature to consider increasing the cap on special education funding (and funding it) as well as to consider a higher amount in the state school fund than the early figure given to us. These would be welcome solutions that would help us maintain current service levels. Regardless of the funding structure next year, we are faced with having more elementary school locations than we need, based on our current and projected enrollment. All signs point to compounding declines in birth rate which makes it inevitable that we must consider consolidating to fewer locations. While this can be difficult in a community, it is also the option that allows school districts to keep the variety of services and options we all value for our elementary school-age children.
Our Board and district are proven good stewards of public funds. As I see the deep cuts being made by other districts in the state, I am grateful for long-standing, proactive fiscal management. While the reductions this year are not pleasant, in fact they are heartbreaking, we are also able to maintain most of the high-quality instruction and a wide variety of programs for students. Next year 2025-26, it will be much more difficult to balance the budget without more deeply impacting service levels. We count on your advocacy as lawmakers consider their options next year.
Respectfully submitted,
Bret A. Champion, Ed.D.
Superintendent
