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School district moves ahead with budget planning as state delays collection of new Student Success Act taxes.

PMG FILE PHOTO - Superintendent Don Grotting has dealt with budget deficits at the Beaverton School District before, but the fiscal picture amid the coronavirus pandemic is daunting.School districts across the state are having to craft budgets for next year, without knowing the full scope of COVID-19 impact on state finances.

With a June 30 budget deadline creeping up, Beaverton School District is forging ahead with its budget process, despite uncertainty about what chunk of state money and tax measure revenue the district will receive.

The district's $936.5 million total budget for the 2020-21 school year allocates nearly $33 million that the district may not receive.

That's because the upcoming school year marks the first that Beaverton, like every other public school district in Oregon, is set to receive money from the Student Success Act, the corporate activity tax approved in 2019 that was expected to generate more than $1 billion each year for Oregon's public schools.

Those plans have changed. The Department of Revenue recently announced it will allow businesses with $10,000 or less in tax liability more time to submit tax payments to the state. The changes mean many businesses won't have to make quarterly payments, or any payments, this year.

Money from the new tax is supposed to help bolster early childhood education and mental health counseling in schools while adding additional resources for underserved students, among other goals.

But unlike all other districts, Beaverton, being one of the largest in the state, is expected to receive a significant portion of those funds, which are doled out according to district size.PMG FILE PHOTO - Beaverton Health & Science School students demonstrate a digital autopsy machine during an innovation expo in May 2019.

While school districts across the state are considering staff layoffs, furloughs and other major spending adjustments, Beaverton school officials say they have to move ahead with approving a budget, even if they need to scrap major portions of it after the start of the next fiscal year.

One of the major snags so far? Hiring.

Districts were expected to create new positions, in line with provisions in the Student Success Act that called for extra counselors and support staff for certain groups of students. Beaverton initially expected to hire 163 new positions this year, according to budget documents.

In an effort to get ahead of the curve and get first pick at the applicant pool, some districts began the recruitment and hiring process before the COVID-19 pandemic shut down schools and the economy.

"We are still hiring for some of those hard-to-fill positions that we know we're going to have … but other than that we put a freeze on hiring," Mike Schofield, chief financial officer for the Beaverton School District, told a budget committee on April 20. "Any hiring or job posting is currently going to the superintendent's cabinet for approval."PMG PHOTO: COURTNEY VAUGHN - Gov. Kate Brown ceremonially signs the Student Success Act last August at Jefferson High School. Jubilation among education advocates and school officials over the law's passage has given way to trepidation and uncertainty, with much of Oregon's economy shut down this spring due to the coronavirus pandemic.

District officials say they're awaiting a May 20 economic forecast from the state, but until then, they have to move ahead.

"We know there will be negative impacts, but do not know the extent," Schofield said via email. "Right now we are assuming there will be reductions, but we do not know the size of those reductions."

He added, "Since we must have an adopted budget by June 30 and the size of any shortfall will likely remain unknown into June of this year, we forged ahead with the original plan fully knowing we will adopt a budget that will not be implemented in the fall."

The latest budget cycle comes after Beaverton stared down a $35 million deficit during the 2019-20 school year that prompted the district to raid its reserve funds. This year, the district was set to be back on track, with an overall additional net investment in its budget of about $19 million, according to a budget message prepared by Superintendent Don Grotting.

The draft 2020-21 budget assumes a student enrollment of 41,380 and includes a cost-of-living increase for teachers and staff, as well as a 3% increase to the district-paid portion of employee health insurance.

By Courtney Vaughn
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