Board approves district-wide furlough plan to save $10 million for next year's tough budget

PMG PHOTO: TERESA CARSON - Guadalupe Guerrero, ssuperintendent of Portland Public Schools peaking at a conference prior to the outbreak of the novel coronavirus.

The directors and officials of Portland Public Schools Tuesday night discussed potential budget cuts for next year that, in a worst case scenario, might cost hundreds of teachers and staff their jobs.

Guadalupe Guerrero, PPS superintendent, said the district is headed "into a really difficult — I want to underline that — really difficult school year from a financial standpoint."

Oregon's economy is cratering from the effects of the COVID-19 lockdown. With thousands of people unemployed and slumping income tax revenues predicted, school districts are expecting less money coming to them from the state. And, districts across Oregon are bracing for big budget cuts.

Portland and other school districts are waiting for the May 20 state economic forecast to get a better handle on what to expect for their budgets.

But, for every $1 billion of reduced state revenue, the state's largest school district will get approximately $30 million less in funds.

Calling it a "really sobering reality," Guerrero said the pandemic is having a "negative budget impact."

Portland Public Schools has few ways to cut costs other than reducing staff, since about 80% of the district budget goes to salaries and benefits.

The district is running worst case budget scenarios that could amount to a $60 million reduction in funds from the state, which is roughly equivalent to 600 teaching or other staff jobs.

"Hopefully it is much better than that," Guerrero, told the school board Tuesday, May 5. The board approved a cost-saving furlough plan for the next several months that would save about $10 million for next year's budget.

"We're too far away to know what will happen," said Karen Werstein, PPS's pubic information officer. "We will minimize the impact on the classroom."

PPS employs about 3,700 teachers and about 2,100 "classified" staff, which includes educational assistants, secretaries and other workers. There are 175 licensed administrators.

Director Julia Brim-Edwards noted that "we know with the May forecast there will be a significant revenue drop" and she added that "we know budget cuts are really hard for this community."

Four day week

The board Tuesday night approved the plan, previously reported, that would cut the district's work week to four days until the end of July. Students would have a Monday through Thursday distance learning week and the district's offices also would be closed on Fridays.

That would save about $10 million in salary and benefits to put toward next year's budget. That's roughly equivalent to 100 teaching jobs.

The district's five unions, including the Portland Association of Teachers, agreed to the weekly furlough day.

Teachers and staff on the four-day week would be eligible to apply for Oregon's Workshare program and receive unemployment-type pay for the hours lost to the weekly furlough day. They would also get the extra $600 per week that is part of the federal economic stimulus package called the CARES Act, district administrators explained. Some employees would earn more under the arrangement than if they remained employed full time.

Guerrero said PPS "is blazing a trail here" and that other districts have been calling asking about how to set up similar furlough programs.

Directors said they've gotten pushback from some community members who view the furlough plan as gaming the system or exploiting a loophole in federal assistance, but director Scott Bailey said "this is exactly what the CARES Act is for."

Brim-Edwards also noted that although students are losing a few school days this year, "we're trading distance learning days for more valuable in classroom days in the fall," characterizing the in-class days as "higher value."

The district has also made other cuts including freezing purchases, banning travel and instituting a hiring freeze.

Schools must complete their budgets by June 30. So there is just over a month for PPS and other districts to recast their budgets to reflect the new information from the May 20 state budget forecast.

The district has truncated the public budget meeting process, but the public will still have an opportunity to attend virtual budget meetings and provide input.

Brim-Edwards said as the budget process moves ahead the community will need time "to share their grief over losses."

Claire Hertz, deputy superintendent for business and operations at PPS said, "We'll have to continue to modify the budget as we hear from the state."

Guerrero marveled at how quickly the COVID-19 pandemic trounced the district's financial situation. "Just a couple of months ago we were in a really great place."

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