Dear Sherwood Families, Staff and Community Members:
By now you have likely heard about the budget challenges occurring at the state level, which could result in an estimated $3 billion revenue shortfall within this fiscal year due to the economic impacts of COVID-19. Adding to this, on Monday Governor Kate Brown announced that she has directed state agencies to prepare for 17% budget reductions in the coming fiscal year. Today I am writing to you to share how funding cuts of this magnitude could impact the Sherwood School District, and the steps we are taking in response to prepare for what lies before us.
In light of the situation at the state level, as well as guidance from the Oregon Department of Education, we know that cuts are coming. The next state Revenue Forecast will be released later this month on May 20, and the word most often used to describe it has been “bleak.”
The Governor has only one means of dealing with a budget shortfall and that’s an across the board reduction in all agencies. Her direction for state agencies to universally prepare for budget reductions in the amount of 17% reflects this, and is a first step towards identifying potential budget cuts that would impact services across the state. This includes the State School Fund, the primary source of funding for our district.
A 17% reduction to the State School Fund is equal to $650 million. Districts have been advised to expect a statewide education cut between $100 million and $650 million. To put that into a local context, the Sherwood School District receives roughly 0.8% of the State School Fund. That equates to reductions of between $800,000 to $5.2 million for the District next year. The Legislature, however, has the ability to selectively change state agency budgets, including that of the State School Fund. They can also choose to utilize the Rainy Day Fund and Education Stability Fund to help offset the total amount of reduction to the State School Fund.
In short, our range of funding scenarios varies widely, from minimal reductions to reductions on a scale that none of us has seen with any previous economic downturn. With this amount of uncertainty about our expected funding for the 2020-21 academic year, the District plans to develop multiple budget-reduction scenarios, allowing us to be prepared to respond quickly as new information becomes available.
Due to the high levels of uncertainty, we have elected to hold the first meeting of our Budget Committee after the Revenue Forecast is released on May 20. Under our revised calendar, the first Budget Committee meeting will be held on June 1. Dates for additional meetings — if needed — are scheduled for June 8 and 10. The Public Hearing on the budget, budget adoption and levying of taxes will take place on June 24.
In the meantime, we know that any cost savings we can identify now can help us to offset longer-term impacts next school year. This work has already started for District leadership, and will be ongoing in the days and weeks ahead as we explore all possibilities for cost savings. We will continue to share with you our efforts to tend to the reality of these potentially drastic budget reductions in future communications.
While there is no denying that the situation before us will be incredibly difficult to face, we will face it head-on — and do everything in our power to be responsible in our stewardship of our resources. I am so grateful to lead a school district in such a supportive and strong community, and we will move forward through this challenging time, together.
Stay healthy and well,
Dr. Heather Cordie