Oregon’s second-largest school district sees financial trouble looming

SALEM, Ore. (KGW) — As school years gear up for the upcoming school year, the Salem-Keizer School District is preparing for looming financial issues.

Currently, the district is facing around a $30 million deficit for the 2024-25 school year. But Superintendent Andrea Castañeda said the district is currently undergoing bargaining negotiations with staff. Once the negotiations are over, the school district will have a much better idea of what their deficit will be heading into the 2024-25 school year.

“We are now running a school system that costs more, than we are bringing in to pay for it,” Castañeda said.

Over the past few years, the district has been losing around 400 students a year, Castañeda said. She acknowledges that the Salem population is growing, but said the birth rate in the area is not.

The district has also added more than 450 staff members since the beginning of the pandemic, Castañeda said. It is also going to lose $20 million in annual federal COVID-relief funding, that will expire after this year.

“The challenge is that we cannot actually size that gap until we’re done with our collective bargaining,” Castañeda said.

87% of the district’s $1.3 billion budget is spent on wages, she said. One solution to minimize costs is to cut staff.

“If we have to make a large reduction, and we may, it is likely that that is going to touch people. It’s because there isn’t other places for us to go.”

Members of the union that represents Salem-Keizer teachers said there are other ways to find funding.

“There’s end of year surpluses, there are, there’s always a contingency fund. And then there can simply be different choices made,” said Vice President of the Salem-Keizer Education Association Maraline Ellis.

If the district does need to cut staff, Ellis believes there may be more opportunity at the administrative level, rather than in schools.

“The Salem-Keizer District has made some spending choices that they could reconsider,” Ellis said.

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