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Northwest Regional Staff:
Each spring, the NWRESD leadership team and the budget committee consisting of school district and community representatives, prepare a budget for board adoption. In its current state, the proposed budget does not include any financial impacts as a result of the COVID-19 pandemic. In fact, we will most likely not know the financial impact of COVID-19 in time to alter the 2020-2021 budget prior to the legally required deadline of June 30, 2020. Even still, we can expect some very difficult financial times as a result of the COVID-19 pandemic. This is going to affect all state agencies, ESDs, school districts, grant programs, etc.
There are three important pieces of revenue information we will need to inform our decisions about the 2020-2021 Budget:
- On May 20, the State is scheduled to release the next economic forecast. This forecast will drive how funding allocations are determined by the legislature. As we all know, many sectors of our economy have been affected by this pandemic, with record unemployment numbers and shuttered businesses Current estimated shortfall to state revenue is between $1-3 billion. For NWRESD, we are looking at an estimated budget shortfall that could exceed 15%.
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Federal CARES Act Legislation: While we are recording every expenditure that can be reimbursable from this funding source, ESDs are not automatic beneficiaries of the act. We are fiercely advocating that ESDs be included in this relief fund since we are providing indispensable support to schools and families during the COVID-19 pandemic. If included, a portion of our emergency expenses will be reimbursable.
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Student Success Act (SSA): At this time, we do not know how much, if any, of the SSA we will see since this funding comes from the new Commercial Activity Tax (CAT). The pandemic has impacted business revenues dramatically. The tax was initially projected to raise about $1 billion annually in statewide education investments, including $24 million for education service districts and an additional $37.5 million for EI/ECSE. Without these funds, the ESD will experience severe program reductions.
The Oregon Legislature will meet in a Special Session in the next few months to determine funding levels for school districts, ESDs, and other state agencies based on the coming revenue estimate. We must be prepared to adjust our 2020-2021 Budget when information becomes available.
To be ready, ESD leadership will be creating three financial plans that include 5%, 10% and 17% reduction levels for the 2020-2021 budget. Unfortunately, the vast majority of our resources are spent on staff members. To protect our staff members to the greatest degree possible, we have enacted a discretionary spending freeze and enacted strict procedures to evaluate whether we will hire any open position.
All of these actions will be difficult, especially after the extensive planning and outreach work that was done to implement the Student Success Act investments. All of us were looking forward to substantive improvements in our EI/ECSE programs, expansion of professional learning services to school districts, and much more. Clearly, these investments are now in serious jeopardy and may be put on hold for the foreseeable future.
We are fortunate that, due to the Governor’s Executive Order, all of us have continued to be paid during this crisis. I want you to know that on an everyday basis, I’m advocating with ODE, the governor's office and others involved in state budget decision making to prioritize the critical programs and services provided by ESDs. What you do is so important.
I know this message is heartbreaking and scary. I hate writing it and am still in awe at how quickly our statewide (and global) economic position has devolved. I am sorry for the challenges all of this will cause our staff and colleagues, our families, and most of all our students. Even so, I am asking that you continue to lead with a sense of calm and compassion for those we serve.
I commit to communicating with you as we learn more through this highly unpredictable budget process.
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