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The district will immediately freeze hiring and spending as it expects major budget cuts due to coronavirus impacts.

PMG FILE PHOTO: - Hillsboro School District Superintendent Mike Scott announced Thursday, May 7, an immediate freeze on hiring and spend as well as a potential weekly furlough day for employees as the district anticipates a major budget cut due to the economic impact of the coronavirus.Anticipating major budget cuts to come, the Hillsboro School District announced an immediate freeze on spending and hiring this week.

In a message Thursday, May 7, to staff and families, Superintendent Mike Scott said the school district may also implement a weekly one-day furlough of all employees as early as next week.

Gov. Kate Brown has directed all state-funded agencies to prepare for an 8.5% reduction in previously allotted funds. The state expects a sharp reduction in tax revenue due to the economic impacts of the coronavirus.

"There is a strong possibility that Oregon will experience a $1-3 billion shortfall in its collection of personal income, property, and business taxes — a dollar amount that represents approximately 5-15% of the state's budget," Scott said.

Scott said the cuts would impact services during the 2020-21 school year.

The potential cut "would feel like a 17% reduction" in funds for that school year because schools are funded on a biennial basis and the current budget cycle is nearly halfway complete, Scott said.

An 8.5% reduction in the budget would amount to a $23 million cut.

"Simply for the purpose of giving that number relevance, not that we would manage reductions this way, a $23 million reduction is the equivalent of 190 teachers or 27 school days," Scott said.

The district's potential furlough of employees and immediate freeze on spending and hiring could stem the impact of potential budget cuts, he said.

"All of this is meant to provide context for the cost-saving measures we are planning for the remainder of this school year," Scott said. "Anything we can do between now and the fall to save money will save staff members, school days, and programs."

Additionally, the future of the school district's expected $16 million in new funding through the Student Investment Account is uncertain, Scott said. The account was created after the passage of the Student Success Act last year.

Brown has already allowed some smaller businesses subject to the corporate activity tax, which was created to pay for Student Success grant programs, to delay payments without penalty.

The Hillsboro School District had planned to purchase new curricula, reduce class sizes by hiring more teachers and hire several other new positions with Student Success dollars. Multiple new positions the district created, expecting to soon get grant money from the Student Success Act, have already been filled.

If the district implemented one furlough day per week for all employees by May 15, it would save about $4.2 million by July 31, Scott said.

The furlough day would likely be Fridays, Scott said.

"By selecting Fridays as the furlough day, students will have a predictable schedule each week of instruction for four days and a catch-up/research/project day on the fifth day; however, if another day must be selected based on an employee's/employee group's work responsibilities, they will work that out with their supervisor," Scott said.

Two potential federal funding sources created by Congress' passage of the Coronavirus Aid, Relief, & Economic Security Act could provide relief to the school district, Scott said.

About $121 million of CARES Act funding allocated to the state is intended to flow to school districts. The district could also receive a share of the more than $32 million that's intended to help state-funded agencies recoup costs incurred due to the coronavirus pandemic.

Scott also said the state legislature could allow districts to access other state funds.

The district would assist furloughed district employees by applying to the state's employee protection Work Share program, set up to compensate employees for lost hours. The program would also allow furloughed employees to receive $600 per week in unemployment money through the CARES Act.

Portland Public Schools, which recently announced one weekly furlough day for all employees, worked with state officials and determined school districts would be eligible to apply to the Work Share program, Scott said.

"While the situation is far from ideal, I am hopeful about the measures we can take to be good stewards of our resources now and in the coming year," he said.

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