This story was updated on Friday, Dec. 1 following additional cut announcements.
Salem-Keizer School District leaders will stop buying vehicles, spend less on computers, send fewer people to conferences and keep administrator salaries flat to save about $7 million next year, Superintendent Andrea Castañeda announced Wednesday.
The district will save another $19 million by reducing the amount it pays into a fund to cover employee pension debts, buying less furniture and playground equipment, delaying the opening of new career technical education programs and increasing facility rental rates for outside organizations that use school buildings, Castañeda announced Thursday evening.
It’s a starting exercise to cut about $70 million total from the district’s $605 million general fund when the new budget year starts in July 2024.
Castañeda will announce additional overhead cost savings next week, which will include the first layoffs and other cuts. She said those layoffs plus cuts announced this week would total about $30 million.
They’re intended to be “reductions that will be felt very little or not at all by students in classrooms,” Castañeda said.
The district, though, won’t detail the final $40 million needed to balance its budget until after the first of year. That figure will be driven by current union negotiations that could cost the district more than it has budgeted, but that last round of cuts is expected to result in eliminating hundreds of district jobs.
Salem-Keizer’s total $1.276 billion budget includes funds that pay for school construction, transportation or are otherwise restricted. The cuts are focused on the district’s general fund, which covers most of the cost of school operations.
The first layoffs will be among people who do not work directly in schools, Castañeda said. She declined to say how many employees will be affected or give details, saying district workers who will be affected will be notified before a public announcement.
The cuts include forgoing cost-of-living pay increases for all district administrators who do not work in schools, about 63 people, including Castañeda.
“These reductions live up to our commitment to reduce our expenses while at the same time protecting the student experience and the staff who directly serve them,” she said.
Those affected include supervisors and top administrators who oversee curriculum, operations, security and communications, but not school principals or assistant principals. That one step will save about $275,000 in the coming budget year.
Pay for administrators increased by 7.85% in 2022 on top of cost-of-living adjustments. The raises were intended to bring their wages more in line with pay in comparable districts.
Castañeda said she will personally donate $30,000 of her $285,000 salary over two years to schools, student clubs and organizations serving young people in Salem-Keizer.
Other cuts include a freeze on new vehicle purchases and reducing conference travel for some district programs.
Castañeda said the district would seek conferences closer to Salem where air travel isn’t necessary and send fewer people.
She did not provide a breakdown of how much each cut would save the district, saying those numbers will be presented at a Dec. 12 board meeting.
The cut in money saved to pay down pension debt won’t affect the district’s current contributions to cover employee pensions. It will instead draw down a savings cushion in an account that’s used to pay pension debts from already retired workers.
The district has been conservative with its pension debt in previous years and can afford to put less toward that account without affecting its ability to make payments, district officials said. That could change when the state next recalculates rates public employers must pay forward Oregon’s Public Employee Retirement System in 2025.
A second, larger round of cuts that hit schools directly will be needed to balance the district budget next year, Castañeda reiterated Wednesday. She became superintendent in July and has spent her first months detailing the need for deep budget cuts as the district runs out of federal Covid money used to hire dozens of employees.
Salem-Keizer, like districts across Oregon, is struggling with expenses rising faster than revenue, with wage increases and inflation eating into district budgets despite record state money set aside last year.
District administrators will decide on the final round of cuts after a second set of community listening sessions to gather feedback, she said.
The amount needed to cut depends in part on contract negotiations with both of the district’s employee unions, which are headed to state mediation. An initial mediation session for teachers is Dec. 6, and for classified workers on Dec. 28.
Castañeda on Wednesday said the budget deficit is a symptom of an inequitable state funding formula for K-12 schools, which allows wealthier communities that approve property tax increases to spend thousands more per student than districts with lower property values and higher poverty rates like Salem-Keizer.
She echoed recent calls from Portland Public School leaders and Gov. Tina Kotek to reform the state funding to account for the realities of modern schools. Educators now are charged with addressing a host of social issues in addition to teaching students to read and write.
“Oregon’s state K-12 public education funding system is archaic and inequitable. It is creating enduring damage to Salem-Keizer Public School students and as of today there is no clear solution in sight,” Castañeda said in a video announcing the cuts.
Kotek signaled on Tuesday she would make school funding reform a priority for the next biennium, saying the state school funding formula may need to be “modernized.”
Contact reporter Rachel Alexander: [email protected] or 503-575-1241.
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Rachel Alexander is Salem Reporter’s managing editor. She joined Salem Reporter when it was founded in 2018 and covers city news, education, nonprofits and a little bit of everything else. She’s been a journalist in Oregon and Washington for a decade. Outside of work, she’s a skater and board member with Salem’s Cherry City Roller Derby and can often be found with her nose buried in a book.