EUGENE, Ore. - Calling this a critical moment in the life of the Eugene 4J School District, the superintendent sent out an e-mail warning of deep cuts and asking management employees to give up their raises and saying he will ask the unions to reopen contracts to discuss changes.

Layoffs will be avoided -- "to the extent possible."

The recession and less money from the state now forces educators to teach students this year while looking for ways to trim the district's spending in future years. For the 2009-2010 school year, the district needs to cut the equivalent of two weeks worth of employee pay.

"Overall, all of our major sources of income are likely to be flat or falling, insufficient to maintain our current level of programs and services," wrote George Russell, superintendent of Eugene schools..

Governor Kulogoski already asked the district to cut $3 million of the current school year's budget. The district has cut the supplies and materials budget and implemented a modified hiring freeze.

Next year, the governor is asking 4J to make $7 million to $10 million dollars in cuts to services including teachers and school staffing.

But Russell warns those cuts could run deeper.

"There's every reason to believe that picture could get worse with the March forecast and the May forecast," said Russell.

KVAL News asked Russell if that means parents can expect things such as larger class sizes and fewer teachers and if he could give examples of what service level cuts would look like.

"No, I can't," said Russell.

While the forecast is bleak, Russell said it could be worse. Unlike some districts in Oregon, 4J has not had to cut teachers yet.

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The following is a copy of the e-mail, as sent to KVAL News by 4J:

District Financial Situation

Overview:

• Funding for K-12 schools makes up 41% of the state’s General Fund budget.

• The state is projecting that revenues for 2008-09 (this year) will be far lower than originally expected. This revenue trend may well grow worse for the 2009-11 biennium.

• The Governor has announced that education is his top funding priority, but education has not been protected from cuts.

• 4J is better off than many school districts. We have reserves and we have support from our local option levy. Despite these advantages, we will not be able to escape cuts and we must take steps immediately to reduce spending.

• As we consider how we will address these financial challenges, we will focus on the instructional core–teaching and learning–and will try to avoid layoffs.

This Year: 2008-09

 • In November, Governor Kulongoski reduced state budgets by 1.2 % across the board, including funding for K-12 schools.

• In December, state officials said that the state revenue shortfall may grow even worse for 2008-09 by as much as $300-$400 million.

• 4J General Fund resources are down by $3.3 million for this year.

To adjust to this financial situation while minimizing the impact on school operations, the district is:

• Reducing discretionary spending on materials, supplies, professional development and other areas (5% for central departments, 2% for schools),

• Implementing a modified hiring freeze,

• Eliminating transfers that were to be set aside in the capital improvements, bus fleet replacement, retirement, and

• Curtailing the use of contingency funds.

The Future: 2009-11 biennium

  • The Governor is proposing a K-12 budget of $6.39 billion plus drawing $160 million from the Education Stability Fund. This is not sufficient to cover projected cost increases and continue the current service level.

• Based on the Governor’s budget and 4J’s financial forecast, the district will need to make $7.3 million in budget reductions for 2009-10. That’s about a 5% budget reduction or the equivalent of 14 workdays for all 4J employees.

• If Oregon’s economic conditions grow worse, our budget cuts could be even deeper.

• In times of challenge, we must all pull together to reduce our costs and increase our impact. Superintendent George Russell is asking that we look for ways to focus on our core mission–educating students–while reducing expenses by:

➢ Restructuring to align our work around our top priorities and our core mission.

➢ Avoiding layoffs, to the extent possible.

➢ Reducing materials, supplies and discretionary budgets by 5% for schools and 5-10% for central departments.

➢ Proposing that senior management forego salary increases and asking other administrative staff to do the same. George will be asking unions to consider reopening contracts to discuss possible adjustments to compensation packages or other expenses. Reducing hours or days worked or the work year are other strategies to be considered.

➢ Reviewing our planned capital expenditures to see where we might postpone spending.

➢ Developing contingency plans, in case our situation worsens.

What’s Next?

We are in a time of great uncertainty, with constantly changing economic conditions.

  • The next state budget forecast is not released until March and the Legislature is not likely to adopt a budget until June.

• We will need to begin building a budget without knowing what our actual financial resources will be.

• George and the Superintendent’s Staff will be soliciting ideas from staff and other stakeholders about what services and programs they believe are most important to our mission, as well as about other ways we can tighten our belts and gain efficiencies.

We know this is a time of hardship for many families and that together we continue to be guided by our mission of "doing what’s best for students". We hope 4J staff will share their thoughts on how we can make prudent choices and continue to support each other through these difficult times.

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