Superintendent's Budget Message for 2025-26  

This school year has provided time for the Gresham-Barlow School District to solidify our improvement efforts and address continuing challenges. As a district, we continue to focus our efforts on deeper implementation of practices where we are seeing growth. Despite a proposed general fund increase of $1.1 billion to K-12 education, GBSD continues to be challenged by increasing expenses in transportation, labor, general operating costs, inflation, and substantive increases to Public Employee Retirement System (PERS) rates. State funding is not keeping pace with rising costs, and we must operate within our means. In recent years, we have been using our ending fund balance (EFB) to maintain current service levels and fill the gap in funding from the state. Moving forward, our spending will need to be in alignment with state funding due to the EFB going below the Board's required minimum of 8%. The EFB is unassigned funds that protect the district from unnecessary borrowing to meet cash flow needs, unexpected emergencies, and ensure a strong credit rating for the district. 

Increasing student literacy and math proficiency, tackling chronic absenteeism, and continuing our focus on social-emotional learning, while maintaining safe learning environments, remains at the forefront of our work. Despite our financial challenges, we will continue to focus on providing students with the best possible education and a positive working environment for staff.

At the beginning of the 2024-2025 school year, the Gresham-Barlow Board of Directors adopted a new approach to defining their work. The Board developed four conditions for success, which provide a vision for district activities. These conditions allow the district to achieve our mission–Inspire and Empower Each Student.

• Safety - An environment in which physical security, emotional support, and intellectual freedom coexist through shared accountability, care, and respect.
• Belonging - The connection of students, staff, and community to their schools and to each other, recognizing that each individual is a valuable part of our educational community.
• Opportunity - An awareness of and unhindered access to quality instruction and breadth of experiences that ignite curiosity and develop skills to launch students toward personal fulfillment and positive contributions to society.
• Achievement - The intentional, determined, and confident pursuit of individual and collective excellence through the development of critical thinking, creativity, and problem-solving skills.

The Board’s four conditions align with and support the District's vision of developing culturally responsive graduates who will thrive in an ever-changing global community. This budget ensures that resources are in place and accessible to stakeholders to build upon the progress made on these conditions throughout the 2024-2025 school year. It leverages resources from the State School Fund, state grants, and federal grants to staff our buildings, assuming enrollment will be relatively stable from this year to next. No changes to fiscal policy have occurred between the 2024-25 and 2025-26 budgets, and the basis of accounting will remain the same.  

The district leadership team has engaged in the Integrated Guidance process from the Oregon Department of Education (ODE) to update the strategic goals from previous years.  The intent is to build upon key initiatives and priorities that demonstrate promising gains in student achievement and overall success. The updated goals include:

• Foster an inclusive and welcoming environment that values the diverse cultures, languages, and experiences of students and families, where students experience agency to learn, grow, and thrive.
• Strengthen instructional alignment and deliver accessible, intentional, and high-impact instruction to guarantee equitable outcomes for every student.
• Implement equity-driven, multi-tiered systems of support that utilize teams to use evidence-based decision-making practices that prioritize equitable outcomes for student success.
• Establish comprehensive pre-K to post-secondary career pathways that expand access to and increase retention in CTE Programs of Study for all students, with a focused commitment to supporting those currently and historically underserved.
• Accelerate early literacy by ensuring all students develop foundational literacy skills through research-based and culturally responsive instructional practice.

STATE SCHOOL FUND 

The state school fund allocation in the 2023-2025 biennium was $10.2 billion, which fell short of the needed $10.3 billion to maintain current service levels. The proposed 2025-26 general fund budget is built upon the legislative appropriation of $11.36 billion to the State School Fund (SSF). The district needs $12.1 billion combined with other anticipated revenues from Federal, State, and local sources to maintain our current service levels.  To match projected revenues with expenditures, district staff are proposing a reduction of $8.1 million in services, coupled with reductions in certified employees, administrators, and classified staff. 

2025-2026 BUDGET ASSUMPTIONS

The drafted budget for adoption is based on the proposed $11.36 billion in the State School Fund. It is also based on the belief that district enrollment will slightly decline over time. The 2025-2026 proposed budget is built upon the following assumptions:

• Funding will be split with 49% available in the first year (2025-26) and 51% available in the second year (2026-27).
• Local revenue is expected to total just over $41.17 million, an increase of $3.3 million from 2024-25.
• Uncertainty in Federal funding could negatively impact the budget, which may not be realized until after it is approved.
• Future negotiated salary increases in a new collective bargaining agreement with our classified staff.
• Projected to end the 2025-2026 school year with an anticipated ending fund balance of 7.4%.
• Special revenue grants through the ODE Integrated Grants total approximately $16 million.
• The total proposed debt service levy amount meets the goal of $2.89 per $1,000 assessed value (assuming total assessed values grow by more than 0.2%).
• Increases in PERS rates.

BUDGET PROCESS GOALS

Throughout the budget process this year, we have developed goals to guide decision-making related to our budget planning and possible reductions.  These goals include:

1. We will put the safety of our students, staff, partners, and the community at the forefront of all decisions.
   1. Maintain staffing in schools that provide supervision and safety support.
2. We will focus on maintaining the quality of learning for all students by 
   1. Identifying non-payroll reductions in addition to staffing reductions in order to maintain programs.
3. We will consider the needs of all students, using a decision-making tool that prioritizes students who need the most support.
   1. Is this a requirement? What is the impact on compliance?
   2. What is the impact on focal groups?
   3. Does this align with our key instructional priorities?
   4. With reductions, do we maintain the capacity needed to implement?
   5. Does the reduction reflect community values or other implications?
   6. Does this allow us to continue to improve or move forward with our priorities?
4. We will pursue reductions that support financial stability over multiple years, with the understanding that we must act as stewards of taxpayer dollars.
   1. Propose a balanced budget for 2025-26 that complies with all federal, state, and local legal requirements.
   2. If additional unanticipated financial resources arrive, increase the Ending Fund Balance to the Board's required 8% and increase long-range planning resources.
   3. Participants/community members will have a broader understanding of the scope and impact of the current budget situation.
   4. The process will result in a sense of clarity, calm, and confidence in our next steps.
5. When position eliminations are necessary, we will make every effort to reassign employees to vacant positions for which they qualify.
   1. Avoid a reduction in force (RIF) in 2025-26 through attrition, temporary positions, and reassignments of staff.
   2. Propose a budget that avoids reductions in the 2026-27 school year.

LOOKING TO THE FUTURE

It is important to note that throughout the state, school districts are facing similar budget challenges. We are fortunate to be more stable than other places, but we are not immune. The costs for goods and services are expected to continue rising, enrollment is expected to trend slightly downward, and there is uncertainty about future financial support at the Federal level.

Finding a balance between the District’s immediate needs and positioning ourselves to operate within our means is imperative. Achieving this objective requires us to continue examining and implementing financial practices that build long-term financial resilience so that we can continue to inspire and empower our students and provide a desirable workplace that can recruit and retain the best teachers, classified, and administrative staff possible.

To achieve our goals of balancing the budget, we must:

• Remain committed to implementing instructional models that deliver high-quality instruction to our students.
• Continue to invest resources in supporting college and career development, prevention of dropouts, and career and technical education that increase graduation rates and post-secondary enrollment.
• Plan for curriculum adoptions that meet state standards, are culturally relevant, and put the most recent materials in the hands of our students and teachers.
• Ensure that staff have access to professional development that supports curriculum adoptions, quality instruction, and how to support our most impacted students.
• Continue work with community and government partners to help students access mental health support.
• Finish our long-range facility planning and prioritize our capital construction needs.
• Prepare for anticipated increased PERS and employee benefit rate increases in the next biennium.
• Continue advocating for the Quality Education Model so that we can achieve an average level of state support compared to the rest of the nation.

The Gresham community has a history of facing challenges together, and I am confident this will continue. Our students will continue to be at the center of our decisions while our staff continues to look at ways to innovate and improve. Likewise, our shared values of stewardship, community, and integrity will provide the foundation for our work.

John R. Koch
Interim Superintendent