School districts, large and small, are facing another year of multi-million-dollar budget deficits. And this time around, it’s compounded by uncertain federal funding.

Portland Public Schools — Oregon’s largest district — is bracing for roughly $43 million in reductions for the 2025-26 school year.

The local teachers union has pushed back as the Tigard-Tualatin School District plans to make cuts affecting dozens of educators next year.

And Reynolds School District, in east Multnomah County, enrolls fewer than 10,000 students. Yet, they’re looking at the elimination of more than 100 educators and a possible cancellation of 10 school days from the 2025-26 academic calendar.

“Our schools are not only charged with providing education to students but serve as triage centers for all the ways our society fails to support people,” Jeffrey Fuller, the Reynolds Education Association president and a teacher in the district, said in a recent press release about the cuts.

“Our schools are centers for learning, but also provide meals, connection, community, and responsibility,” he said. The association held a rally last week over a lack of state funding, which Fuller argues has led to the budget deficit. “These cuts will further damage our historically underfunded school system that families rely on.”

These districts are just a few examples in the Portland-metro area. But cuts are being felt across Oregon — and the country.

School districts face longstanding issues, including rising costs of goods and services, heightened student needs and declining enrollment. State lawmakers are at a critical tipping point as they reimagine Oregon’s school funding structure. All the while, recent threats to federal funding raise questions about the future of the nation’s public schools.

Districts face possible school closures, ‘wild card’ federal changes

Families in the United States are getting smaller. As birth rates decline, so, too, does school enrollment.

That’s a major budget consideration for Oregon school districts. School funding is based largely on how many students a district has, which means shrinking student numbers hurt districts like Portland that are losing more students than the state average. Eugene 4J School District is preparing this year for at least $19 million in cuts to deal with enrollment going down and costs going up. The Eugene district enrolls roughly 1,000 fewer students now than it did five years ago.

Marguerite Roza, a research professor and the director of Georgetown University’s Edunomics Lab, explained in a recent webinar that a drop in enrollments may increase the likelihood of school closures due to enrollment declines. Data from the National Center for Education Statistics suggests West Coast states, California especially, are at an especially high risk of school closures.

Roza said in many cases, the U.S. has too many physical schools. Districts have to spread thinning resources out across too many buildings with fewer students year after year. In a recent interview with Think Out Loud, Portland Superintendent Kimberlee Armstrong said school closures are possible in the district’s near future.

Roza, with the Edunomics lab, says the enrollment crunch is a long-term trend that is hitting schools harder now that money is getting tighter.

“In many of these districts, these trends were already happening,” Roza said, “but the COVID relief funds masked some of that decline.”

Schools nationwide are grappling with the ongoing aftermath of federal COVID-19 relief dollars ending.

Over the pandemic, Congress gave schools almost $200 billion in three rounds. The money was referred to as the Elementary and Secondary Schools Emergency Relief funds, or ESSER. Schools used that money on everything from building upgrades and health safeguards to increased staffing and summer learning options to counter COVID learning loss.

Now, schools don’t have that added money, and as seen last year, some districts struggled to stabilize after the funding ended.

Further complicating budget discussions at the local level are lingering national threats to education investments coming from the Trump administration. Trump’s federal budget, announced Friday, would slash more than $4.5 billion in K-12 funding for fiscal year 2026. The changes would especially reduce support for Title I, which serves schools in higher-poverty areas, and IDEA, or the Individuals with Disabilities Education Act.

Oregon’s budget cycle always has a wait-and-see element as school boards wait for final numbers from the Legislature. However, in the past, the federal part has been more predictable. Now, some school leaders have told OPB that federal funding is more of a “wild card.”

School funding news out of Salem

Last month, Oregon lawmakers and Gov. Tina Kotek created two new laws that dedicate a pot of state funding to summer learning programs and decide who qualifies for the money. The decision process is key since other education funding pushes still take from the same bucket of money, meaning if the state gives more to one area, it could be taking away resources from another.

There are bills this session meant to revamp how Oregon’s school funding formula works, invest more in special education, and hold schools more accountable when students continue to fall below academic benchmarks.

The state revenue forecast in December, along with Gov. Tina Kotek’s increased school investment budget proposal and funding mechanism ideas, were encouraging signs for education advocates at the start of 2025. But some still have concerns, especially as increased costs for schools to the Public Employee Retirement System, or PERS, in the next two years are expected to more than wipe out the governor’s proposed increases in school funding. Experts say increases in state funding could also be swallowed by the increasing costs of teacher and school staff contracts.

Ashley Schofield is part of a parent coalition with the Oregon PTA and Community & Parents for Public Schools of Portland that spoke to lawmakers late last month as part of a school funding lobbying effort. She told OPB the coalition wants lawmakers to consider the long-term investment of public school education and how it “builds a stronger Oregon.” The group is pushing for an additional $2 billion in the State School Fund for the upcoming biennium to match the recommendation from the state’s Quality Education Commission.

Oregon has never fully funded schools at the level the QEC has called for. Members of the parent coalition say they again heard from legislators that funding at that level wouldn’t happen during this session either.

The parent advocates also asked that if the upcoming May revenue forecast shows more money will be available, it be directed towards K-12 public education. One bill being considered this session, House Bill 3360, would tackle Oregon’s unique funding quirk, which rebates tax money to taxpayers when revenues come in above projections. Under HB 3360, so-called “kicker money” would be used for school construction, maintenance projects and infrastructure improvements.

The parents coalition also wants legislators to devise a plan to fully fund the recommended spending levels from the QEC. The coalition was among hundreds of Oregonians pushing legislators to remove the cap on special education funding, which forces many school districts to redirect other funds to support programs for children with disabilities. Washington lawmakers removed their state’s special education cap this spring.

“We also know that the federal government right now is making everything extra challenging,” Schofield said. “We ask that lawmakers double down on our efforts to pursue a prosperous and freer society by investing in public education.

“The state has money, so let’s use it for our future,” she said. “We promise it will benefit us all.”

Washington lawmakers take ‘crucial’ steps

Last week, the Washington State Legislature concluded its 2025 session and passed its final budgets. Despite being faced with a $12 billion shortfall, legislators not only maintained maintenance-level funding in K-12 education, but as State Superintendent Chris Reykdal put it, they also made “crucial” investments.

Reykdal said his office’s priority request to the Legislature this year was to increase funding for supports for students with disabilities and to remove the artificial cap on state funding for students with disabilities.

“Lawmakers did both, bringing our state much closer to fully funding these essential services,” he said in a recent statement. “All of our students have a right to basic education and deserve to thrive in their learning environments. This is not only a key Washingtonian value — it’s a constitutional obligation.”

Though the states fund public schools and even structure their state education agencies differently, Washington districts are also facing challenges with rising costs. Reykdal said the Legislature made progress on this issue this session, but there is still more work to be done.

“Our districts may continue to experience financial distress,” he said, “and my office will do all that we can to mitigate those impacts.”

News Source : https://www.opb.org/article/2025/05/07/oregon-school-districts-grapple-with-budget-woes-as-federal-funding-hangs-in-the-balance/