The 4J school board faces tough decisions on budget cuts. Here’s why

Through lengthy budget meetings, emotional public comment sessions and nine budget mock-ups, Eugene School District 4J leaders have been wrestling with hard truths facing its future. 

Like many districts in Oregon, 4J faces challenges on many fronts as COVID-era funding ends, enrollment declines and other costs rise.

The 4J school board is set to vote Wednesday on its budget for the 2025–26 school year. Any budget it adopts will cut school funding by millions. 

With COVID-relief dollars gone and enrollment declining, the funding for many positions aimed at helping students recover from pandemic learning loss could be eliminated as the district tries to close the gap in its budget.

“At some point we have to learn to live within the revenue that we’re provided, and that’s not currently how we’re operating,” said interim superintendent Colt Gill in an April 15 meeting.

The proposal in front of the 4J board

4J must make significant cuts in order to balance its budget. The immediate question for the school board is how much of its reserve funds it will use this year in order to push off some reductions until next year.

The budget the school board is considering was proposed by the budget committee and cuts a net $15.8 million from last year’s $298.8 million general fund expenditures. Cuts will extend beyond supplies and services and include teachers, support staff and administrative staff. 

District leadership plans to make these cuts first through attrition, but is still uncertain whether resignations and retirements will be enough or whether layoffs will be necessary. That might not be known until the end of the summer. 

“The district can recall displaced staff all the way until the school year starts if there is late-developing attrition or funding additions,” said Kelly McIver, 4J’s director of communications and intergovernmental relations, via email.

Here are the nuts and bolts of the proposed general fund budget:

• Total cuts: $20.7 million.
• Net cuts (includes new expenses added to general fund): $15.8 million.
• Uses $26 million in reserves.
• Eliminates 38 full-time equivalent positions (the number of workers this translates to is currently unknown).
• 8% of budget cuts would impact school-facing positions.
• 92% of budget cuts would impact positions outside of schools.

The superintendent and district finance department originally proposed a budget that cut a net of $19 million. Building on that framework, the budget committee added $3.2 million back from reserve funds. The majority of the school board expressed support for the budget committee’s proposal in the May 7 meeting, but board member Morgan Munro spoke against it.

“The proposal that came from budget committee that we’re currently debating seems like a wish list more than a budget,” Munro said. “It’s out of touch with reality to the point of, I think, being financially negligent. It’s like a doctor told us we have two years to lose 100 pounds, and our plan in year one is to lose 10, but don’t worry, in year two we’re going to lose 90. Do we have a plan for how we’re going to do that? We don’t.”

Chair Jenny Jonak defended the budget committee’s proposal, speaking on the complexity of the board’s decision.

“I think reasonable people can disagree about this,” Jonak said. “I think it is our fiduciary duty to be fiscally responsible, but it is also part of our mission to serve our students, and for me personally, I feel better with a $3.2 million difference adding some of the classroom supports in that support our students.”

Digging into reserves

The district’s revenues are not keeping up with its costs, due in large part to its effort to support students through the pandemic and post-pandemic years, even as COVID-era federal funding ended. To fill the gap, the district has turned to its reserves.

Last year, the 4J school board chose to add 72 positions with reserve funds. 4J is on track to spend nearly $30 million of reserve funds in the 2024–25 school year. It will have $46.3 million in reserves at the beginning of the 2025-26 school year. The reserve fund is money stashed away during financially prosperous years for specific goals and emergencies.

This year, if the board chooses the budget committee proposed budget, the district would spend $26 million in reserves, which would result in reserves falling $1.84 million below the district’s set minimum of 8% of the general fund.

“As your finance director, I have to formally inform you of this break in your financial policy,” said finance director Matt Brown in the May 7 board meeting. Brown said board policy calls for district officials and board members to create a plan, “in a nonspecific time period,” to bring the reserves up to the required level.

If the board passes the budget committee’s proposed budget it will likely have to shave $27.5 million more off spending next year. Staff reductions will make up a higher proportion of those cuts next year, according to the district.

How did we get here?

COVID-19 closed schools for about a year between 2020 and 2021, which led to significant learning loss for many students in Oregon and across the nation. The federal government tried to counteract these losses by distributing relief grants to schools across the country. 4J received a total of $56.6 million in Elementary and Secondary School Emergency Relief money. In September, the last of that money ran dry.

The district spent these one-time federal funds on equipment for buildings, supplies for distance learning and staff, which, in part, led to a 29% staff increase from 2020 to 2024.

Meanwhile, 4J is expected to have its lowest enrollment in more than 25 years for the next school year. This means 4J will receive less money from state and federal funding, which is allocated on a per-student basis, including from new state programs aimed at high school success, academic achievement for vulnerable populations and mental and behavioral health. For each student, the state gives about $10,900 to 4J.

Declining birthrates, lack of affordable housing in the district and a loss of students to Bethel and Springfield school districts are at the root of the enrollment decline, according to 4J. Statewide, Oregon schools have also seen post-COVID student enrollment losses, which still are affecting districts. 

Because of 4J’s new hires with COVID funding, staffing has grown while enrollment has shrunk over the past five years. From 2020 to 2024, 4J added 497 staff members and lost 853 students. Interim Superintendent Gill said in his April 15 message to the budget committee that the staff-to-student ratio is currently 1-to-7, while it stood at an average of 1-to-10 over the past 25 years.

“It’s exactly what our kids need, and it is also the crux of our problem in maintaining operation within the revenue the state provides us,” Gill said.

Additionally, federal education funding is in jeopardy. These funds support the most vulnerable students, including economically disadvantaged students, migrant students, tribal citizens, English language learners, immigrant students and students with disabilities. Decisions on the federal level, 4J’s decreasing poverty levels and enrollment declines will mean cuts to the $20 million 4J receives annually.

District costs have also risen, contributing to the gap between revenue and spending. Staff salaries are rising to keep up with inflation, fuel and electricity prices are rising and pension costs recently went up because a bond that was partially paying for them expired. 4J also blames state-mandated programs that remain unfunded by the state. These include Oregon’s paid leave programs and changes to unemployment benefits.

Who to lay off: Educators or administrators

During budget committee meetings, employee groups spoke about the potential cuts, some arguing the district should make more cuts to administrative roles before eliminating positions in school buildings.

Sabrina Gordon, president of the Eugene Education Association, which is the teachers’ union, said in the May 7 board meeting that its repeated questions during the budget committee meetings about cutting more administrative positions were ignored.

“The silence on this topic spoke volumes,” she said. “In that silence, what we heard was: if staff, parents and the community ask questions that begin shining a light on something that 4J doesn’t want to change, the conversation will be redirected.”

As state and federal funding sources have grown over the years, however, so has the need for staff at the district level who do the work necessary to receive these funds, according to district leaders at the April 22 budget committee meeting. Staff apply for grants, for instance, create budgets that align with grant requirements, perform quarterly reporting, and submit for reimbursements.

School board to decide Wednesday

4J’s school board will meet at 6 p.m., May 21 at 4J Education Center, 200 N. Monroe St., to vote on the 2025–26 budget. 

Correction: The original version of this story misstated the amount of last year’s general fund expenditures. The amount was $298.8 million. Lookout-Eugene Springfield regrets the error.