Newberg School District Superintendent Paula Radich presented the budget committee with a gloomy message April 4, saying she expects revenue for the district to be down $3.5 million for the next fiscal year. The district receives 8.4 percent of its budget from the federal government. For the past three school years the district received additional stabilization funds from the feds, but those will end this year, meaning a $1.5 million loss.

Funding from the state, which comes to schools via three major income streams, is also expected to drop this year, as the state has a $3.50 billion shortfall. The money comes from personal income taxes, which have diminished with the current unemployment rate of 10.2 percent. Property taxes are the second major income stream and the good news is that collections are up 2.8 percent compared to last year in Yamhill County.

The bad news, Radich said, is that as the district receives more local property taxes it receives less money from the state’s general fund. The last major income stream for schools is the state lottery. Lottery earnings are expected to decline after the adoption of a more stringent smoking ban in bars and taverns.

There are two more state revenue streams for schools, Radich said, including the state rainy day fund, which only has $102 million remaining for schools. The state’s education budget for the current biennium will run between $5.8 billion and $6 billion and this year’s proposed allocation is $5.7 billion. The proposed budget for the NSD is $57.6 million.

The state’s Education Stability Fund, the balance of which is currently estimated at $150 million, is the final source of cash for struggling school districts, but “it is very unlikely that they will tap either (that or the rainy day fund),” Radich said of the Legislature.
She told the committee that the K-12 share of the state’s general fund continues to decline. It was 44.8 percent in 2003-2005 and will be 37.6 percent in 2011-2013 under the current proposal. She highlighted this trend, saying that “when we disinvest in education it’s very hard to get the economic train moving.”

Another worry for Radich is that since the 2003-2005 biennium the state’s general fund and lottery spending have increased by 32.6 percent, but K-12 has only seen a 13.1-percent increase. Human services saw a 62.7-percent increase and public safety had a 46.8-percent increase, among the examples she showcased for the committee.

Radich is once again recommending the district build a budget at a higher level than it will actually spend. By building capacity, as she terms it, the district will be able to spend the money if the state receives it, but by under-spending it won’t have to make hasty mid-year changes that are disruptive to the classroom.

The district will build a budget on 49 percent of expected revenues coming in in the first year of the biennium and 51 percent the next. Governor John Kitzhaber recommended that districts base their budgeting on 52 percent coming in the first year and 48 percent the next. “We don’t think it’s realistic, nor reasonable, nor prudent to go that route,” Radich said.

Subcommittees will start meeting soon and a budget must be adopted by the end of June.

Laurent Bonczijk

Newberg Graphic