Salem-Keizer Public Schools is preparing for budget reductions of at least $25 million for the upcoming school year, a move that follows a significant $75 million cut from the previous year. Superintendent Andrea Castañeda announced the impending cuts on November 5, signaling a period of financial uncertainty for Oregon's second-largest school district.
The district is also facing the possibility of mid-year revenue reductions due to a weaker statewide financial outlook. Officials are now considering a range of measures, including staffing changes and negotiations with employee unions, as they navigate the challenging fiscal landscape.
Key Takeaways
- Salem-Keizer Public Schools must cut a minimum of $25 million from its budget for the next school year.
- This follows a $75 million reduction implemented during the last budget cycle.
- Statewide economic forecasts suggest potential for additional mid-year cuts for all Oregon school districts.
- Superintendent Andrea Castañeda has indicated that all options, including layoffs, are being considered.
- The district is urging state legislators to utilize the $1.2 billion Education Stability Fund to mitigate the impact.
A Deepening Financial Challenge
The announcement of a $25 million budget shortfall places significant pressure on a district still adjusting to last year's $75 million in cuts. The new reductions will be made from the amount needed to maintain current programs and services within the district's approximately $1.15 billion budget.
Superintendent Castañeda addressed the situation in a presentation to the school board after holding a simultaneous meeting with the district's nearly 5,600 employees. She emphasized the need for early and transparent communication.
"The longer it takes for people to tell us our target, the weaker our decisions will be, the more rushed our dialogue will be, and the more contentious the process will be," Castañeda stated.
The financial strain is not unique to Salem-Keizer. Education leaders across Oregon are expressing concern about the state's declining financial position, which could trigger budget rebalancing during the legislature's short session in early 2026.
By the Numbers
- $25 Million: Minimum budget cut required for the 2026-2027 school year.
- $75 Million: Amount cut from the district budget last school year.
- 1,000: Decrease in student enrollment between last year and this year.
- 9%: Approximate annual increase in wage and benefits costs.
Navigating Difficult Decisions
In outlining the district's strategy, Castañeda confirmed that initial cuts will target district administration and operational expenses. However, she acknowledged the increasing difficulty of finding savings in these areas year after year.
"Every year that we do that, it is harder to do it again," she said. "But that is where we will start."
The district must also address major cost drivers. Conversations are planned with employee unions to discuss wage and benefit costs, which are rising at an estimated 9% annually. Furthermore, a significant mismatch between staffing levels and student numbers has emerged after the district lost 1,000 students this year without a corresponding reduction in staff.
Potential Changes on the Horizon
To close the budget gap, the administration is evaluating several significant operational changes. These include adjustments to:
- School bell schedules
- Overall school sizes
- Staffing plans and allocations
While no final decisions have been made, the possibility of layoffs looms. Castañeda described a reduction in force as a last resort.
"The last tool at our disposal, one of the least desirable but always there, is a reduction in force for the next school year. I sincerely hope that any of the tools that come before that one allow us to avoid that as an option," she explained.
What is the Education Stability Fund?
The Education Stability Fund is a state reserve created by Oregon voters in 2002. It is designed to provide a financial cushion for schools during economic downturns, helping to prevent drastic cuts to educational programs. The fund, which currently holds about $1.2 billion, was last used during the 2019-2021 biennium.
A Call for State-Level Action
As Salem-Keizer prepares its 2026-2027 budget, district leaders are joining a statewide coalition to advocate for a measured response from lawmakers. Krista Parent, executive director of the Coalition of School Administrators, cautioned against reactive decisions.
"We are entering a period of great uncertainty," Parent said during a media briefing. "We believe there is still time for a thoughtful, measured response."
The coalition is urging the state to use reserves, particularly the $1.2 billion Education Stability Fund, to fill the revenue gap and prevent severe impacts on classrooms. The fate of this request and the extent of potential mid-year cuts will become clearer following the state's economic revenue forecast on November 19.
For now, the district's goal is to provide clarity to staff and families before the end of the current school year. "We want everybody in our system to know the condition of their school, the situation for their own employment," Castañeda concluded. "We want parents to know what’s happening in their schools and we need that all to happen before the end of this school year."