|
Dear NWRESD Staff,
I hope this message finds you well and you are all finding creative ways to celebrate our licensed educators during teacher appreciation week.
On a very different note, as I’ve shared previously, we are planning for NWRESD’s 2020-21 Budget in the context of the quickest global economic collapse of our lifetimes. With this in mind, we are pursuing a strategy that could result in a weekly furlough day for all employee groups as a cost saving measure—anything we can do now will save staff members, school days, and programs next school year.
Background
There is a strong possibility that Oregon will experience a $1 to $3 billion shortfall in its collection of personal income, property, and business taxes - a dollar amount that represents approximately 5 to 15% of the state’s budget. To summarize, here’s what else we know about the predicted economic fallout from COVID-19:
- Governor Brown has already delayed payments to the new business tax that funds the Student Success Act, and the future of this revenue stream is still unclear. NWRESD was set to receive $4.2 million to support districts related to the Student Investment Account (SIA) programming; a $7 million increase in EI/ECSE funding; over $2 million to support the Regional Educator Network (REN); and a myriad of other investments in various programs through the Statewide Education Initiatives (SEI) and Early Learning Account (ELA) portions of the SSA.
- Through the CARES Act, there are two funding sources that could specifically support education, but ESDs are not automatically included in this relief fund. An estimated $121 million is intended to flow through to school districts, and another $32.6 million is intended to help government agencies recoup costs incurred as a direct result of COVID-19. I am fighting every day in Salem (virtually of course) for ESDs to be included.
- These economic factors will mainly impact us in the 2020-21 school year, but ESDs and school districts are subject to biennial state budgets. Governor Brown has directed state-funded agencies to prepare budgets with 8.5% cuts, which is the extent of her budgetary authority. If education is expected to make 8.5% in cuts, that would act like a 17% reduction.
We will know more on Wednesday, May 20 when the next quarterly revenue report is released. After that date, we expect state lawmakers to convene. State lawmakers will be able to make more specific plans, such as vary the severity of cuts by agency. They can also decide if we can access the state’s reserves, including the “Education Stability Fund,” designed to protect schools during downturns.
Actions
We have planned three, short-term cost-saving measures to protect our critical services and staffing:
- We have already implemented a spending freeze that will continue indefinitely.
- We have also implemented a hiring freeze - with the exception of certain hard-to-fill-positions.
- The third cost-saving measure is fairly unique. As you may have heard, Portland Public Schools (PPS) has announced they will implement one furlough day per week through July 31, 2020. They will access a state program called Work Share and federal CARES Act funds. The Work Share program exists in 26 states and has been available for several decades. It was initially implemented as an employee protection program for the manufacturing industry. Employers can furlough employees for one to two days per week rather than lay them off. The employer saves money to weather cyclical demands, and employees retain their jobs while collecting unemployment.
PPS did the initial research with the State’s Unemployment Office to see if this program would work for an educational entity and the answer is “yes.” Many other districts around the state were watching this process with interest and we are seeing announcements in surrounding school districts that they are pursuing this strategy (e.g., Hillsboro, St. Helens, Scappoose, Forest Grove, Gaston, Beaverton and more).
The Work Share program will save a significant amount of money in a short period of time, while providing a mechanism for employees to recoup lost wages. Here’s how it works:
- The employer files for its entire employee base and continues to do so each week, moving people in and out of the program as necessary based on their eligibility. Some employees are not eligible for this program because they have not worked for the district for at least six months, are on a leave of absence, or are retiring. For those employees who are ineligible, it is our intention to not instate furlough days.
- The employee fills out a one-time two-page document (we will direct you when it's time to do so) indicating their preference for a check or direct deposit, tax withholding, etc.
- The employee’s work week is reduced by 20%. If they normally work 40 hours per week, they will now work 32; if they normally work 20 hours per week, they will now work 16.
- The employee will receive their regular pay from the district for 80% of their week, and will receive the Work Share unemployment pay for 20% of their week. They will also receive $600 per week from the federal CARES Act program currently in place through July 31, 2020. For nearly every employee, this will be a financial net gain.
- The impact of the 20% reduction in NWRESD pay will not be evident until the June paycheck, at which time the Work Share unemployment benefits should begin.
- The employee’s health benefits remain the same.
NWRESD is planning to submit its application to the State Unemployment Office for participation in this program, and we are hopeful we can implement it for all employee groups by next week, pending approval of our unions and the Board.
The furlough day will likely be Fridays, but the more important piece is that each employee reduces their work hours - those hours do not necessarily have to be tied to a particular day. By selecting Fridays as the furlough day, students and families would have a predictable schedule each week of instruction; however, if another day must be selected based on an employee’s/employee group’s work responsibilities, they will work that out with their supervisor.
If we are able to implement furlough days starting by May 15 for all employees, we will save approximately $1.05 million by July 31, 2020.
Any money we are able to save in this fiscal year will lessen the impact of reductions we will have to make in the 2020-21 school year - protecting more jobs, more school days, and more vital programs for students.
Additional information and instructions, including an FAQ, will be forthcoming. If you have specific questions you would like to have addressed in the FAQ, email communications@nwresd.k12.or.us.
While the situation is far from ideal, I am hopeful we can protect our programs, staff and kids to the greatest extent possible. Thank you very much for your partnership in this effort. We will continue to provide information and clarity as we work our way through this process.
|
