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The Fiscal Problem

The Medford School District is facing a projected $15M deficit over the next two years. 

The difficulties mainly stem from inadequate state funding for K-12 public school districts, especially considering inflation and state requirements. Other factors include fewer enrolled students due, in part, to lower birth rates, pensions that need to be paid without allocated funds, higher student needs, and the end of special COVID-related emergency funds for schools.

The State of Oregon does not fund schools based on inflation; districts tend to receive increases of 3-4% from the state annually. This year, the district bargained with its employees for well-deserved cost-of-living adjustments (COLA) above that amount, plus about half of our employees qualify for a step increase of 2.5% to 3.5% in addition to the COLA .

State of Oregon Public Education Funding 

Over the past 20 years, an increasing percentage of the State’s general and lottery fund budget has been allocated away from K-12 education toward other areas, such as health & human services (K-12 allocation went from 44.8% to 30.5%). The total budget for the state for 2023-25 is $33.491 billion. Out of this, K-12 education received $9.457 billion directly from the budget and an additional $743 million from other sources, making it $10.2 billion. This amount is 30.5% of the main budget. When you also count money from specific educational programs like Measure 98, the Student Investment Account, and the Early Literacy Grant, the total spending on K-12 education, excluding building costs, goes up to $11.702 billion, or 34.9% for 2023-25  as compared to 44.8% in 2003-05. However, the Quality Education Commission believes that to achieve their ideal level of education, K-12 would need $13.227 billion for the two-year period.


The state has projected a 4.08% increase for the 2024-25 school year and early projections of only a 1.73% funding increase for the 2025-26 school year, which won't keep up with rising pension, salary, utility, and other costs facing school districts. Click here to read more about budget challenges across the state.

Enrollment Decline

Birth rates in Oregon are rapidly declining, contributing to lower student enrollment. There are also more choices for families. Nationwide, there has been an increase in students and families choosing homeschooling, charter schools, and private schools since the COVID-19 pandemic. 

Elementary enrollment is down 1,632 students (23.69%) since 2019. Most elementary schools now have under 400 students enrolled.

Increased Special Education Costs

While overall enrollment is declining, special education enrollment has risen. Nearly 16% of students in the district qualify for special education services. The district must fully fund special education programs, but the state only funds districts up to 11% of total student enrollment.  The funding cap results in around $7.15M in additional costs not covered by the state for the district. This is a major contributor to budget deficits.