Portland Public Schools is facing a $50 million deficit in next year’s budget.

And now, district officials are reporting a “mid-year operating gap” for this year.

In a message to staff and board members sent Monday, PPS Chief Financial Officer Michelle Morrison said staff found the gap when finalizing budget projections in the current fiscal year.

Morrison’s message included several reasons for the discrepancy: higher transportation and maintenance costs, costs from federal lawsuits, a $5 million gap in levy funds, and “expenditures of $2.5 million for seven emergency facility declarations” including a broken pipe at Sabin Elementary, sewer issues at Rigler Elementary, and cooling system and guard rail issues, both at Benson Polytechnic High School.

As a result of these additional costs, the district is taking immediate actions with a goal of closing the gap by June 30, so the budget problems in the current school year don’t carry over to the coming year.

In the message, Morrison calls the gap “a corrective action moment.” Morrison said their actions include pausing all budget spending and canceling a professional development day scheduled for Monday, March 2.

In an email reminder to PPS families of no school on Monday, the district mentioned the professional development sessions were canceled, but did not explain why.

“We always anticipated a need to reduce our workforce sometime this spring,” Morrison wrote. “This current reality may accelerate that timeline slightly. A final determination is still being made.”

District officials say the gap was initially $22.5 million, but cost-cutting measures have reduced the gap to $10 million.

This new gap for the current year is in addition to the district’s projected $50 million deficit for the next school year. Other school districts in Oregon, including the Reynolds School District in east Multnomah County, have had to manage mid-year funding challenges this year, too.

PPS Superintendent Kimberlee Armstrong is scheduled to deliver her budget message for the 2026-27 school year on April 28, with the school board set to adopt a budget by late June.

News Source : https://www.opb.org/article/2026/02/24/portland-public-schools-mid-year-cuts-shortages/