Dear Portland Public Schools families, staff and community members,

Daylight savings time has begun and spring officially arrives on the calendar this Monday, March 20. We hope the start of the new season and the extra hour of daylight at the end of the day are a boost for everyone!

The Portland Public Schools FY24 school budget process also officially launched this month, when we presented our recommended $141.3 million school budget proposal for the 2023-2024 school year to the Portland Board of Public Education on Monday, March 14.

The budget will now undergo review, public hearings and votes by the Board and City Council over the next couple months before it goes before Portland voters on June 13 for a final say. You can view the complete budget calendar and budget materials on our website HERE.

We continue to urge everyone in the Portland community to stay engaged and informed during the budget process. Your involvement is essential to the passage of a budget that enables us to continue to offer the quality education that all Portland students deserve and that supports our staff.

Please read on to learn the details of our budget proposal, which strives to balance the daunting fiscal pressures the district is facing in FY24 with targeted investments to meet the needs of our staff and students, while being cognizant of city taxpayers. You also can view our budget presentation on YouTube and see our slide presentation.

The theme of our budget proposal is: “Strengthening Academics, Behavioral Health and Operational Systems.”

This theme summarizes the three key priorities of our FY24 budget: Maintaining our commitment to the Portland Promise goals of Achievement, Whole Student and People – all intertwined with our fourth central goal of Equity; being responsive to the needs of all students, especially those newly learning English; and improving operational effectiveness in such areas as finance and human resources.

To advance the Portland Promise, we have made strategic investments in PPS budgets over the past six years to prioritize support for students experiencing opportunity gaps to help put them on equal footing with their more advantaged peers: our students who are multilingual learners, have special educational needs, are economically disadvantaged or have otherwise been marginalized in society. Those investments have included supports for mental and behavioral health and youth development; pre-K expansion; investments in academics, including math and science; curriculum development; implementing elements of the district’s Lau Plan to support multilingual learners; supporting and institutionalizing the district’s equity, diversity and inclusion work; and creating full-time librarian positions at most of the district’s elementary schools. One of our three key priorities in our FY24 budget is maintaining all this work we’ve started.

We recognize in this budget that these priorities must be balanced with the considerable fiscal constraints we are facing in FY24. Budget pressures are a challenge we encounter every year, but several factors make this year’s pressures particularly daunting.

One pressure is very familiar to us:  a state school funding system – called Essential Programs and Services or EPS – that assumes that property-rich communities like Portland can afford to pay a larger local share of their education costs. Our EPS subsidy for FY24 is $2.4 million less than this year’s state funding, driven for the most part by the increasing property valuation of our community. 

Another factor that has been part of everyone’s daily lives for a couple years also impacts our school budget: inflation. The annual consumer price index has been between 6 and 7 percent for our region over the past year. That escalation is reflected in the costs of many of the goods and services we procure.

We also face other budget pressures in FY24:

Like so many other employers across the state and nation during the pandemic, we have struggled to find staff to fill our positions. To help attract and retain staff and ensure our hard working employees can meet the inflation-driven costs they face every day, we settled contracts this past fall with bargaining units representing our teachers and educational technicians that included wage increases. Increased investments in all our employees totaling just over $4 million are reflected in our FY24 budget.

Investments to improve district operations also are part of this budget. Everyone knows about the district’s struggles since last fall to pay all of our more than 1,500 employees in a complete and timely way, due to staffing turnover and shortages and systemic problems with our payroll system. While most of the immediate problems have been resolved, we continue to work to strengthen our payroll system long term by outsourcing payroll, a move recommended by our recent Spinglass audit. Our budget includes $590,000 to cover the costs of hiring payroll processor ADP and increasing staff in our finance and human resources departments – also recommended by Spinglass – as well as for shoring up our transportation, facilities, and school meal services.

The Portland Public Schools also is experiencing an unprecedented number of students who are new arrivals and from asylum-seeking families, most of whom need intensive English language development support. The number of new arrivals had already exceeded 600 for this academic year and is expected to increase. This budget includes $175,000 in local resources to help these students and their families by providing intake support, language access, and case management services.

Our budget also reflects an increase of $2 million for out-of-district special education costs for students whose specific IEP needs we are unable to meet in our schools. These costs are required by law. The state adjusts funding to districts through its High Cost Out of District (HCOOD) reimbursement when a district experiences costs during a year that are in excess of what is initially funded in its formula-based funding. Based on our FY24 cost projections, we are projecting a corresponding revenue offset to these costs of approximately $500,000.

Finally, our budget also includes debt service costs for the renovations of the schools in the Buildings for our Future bond approved by Portland voters in a 2017 referendum. The three remaining schools are almost complete – the culmination of a 20+ year process to renovate our elementary schools. Lyseth Elementary was renovated in 2020 and now renovations to a second school – Presumpscot– will be completed this spring. The remaining two schools – Reiche and Longfellow – are less than a year from completion. Through careful financing and use of reserves, we have been able to defer the impact of debt payments for these projects over time, but we are still seeing a $2.2 million increase in our debt service for FY24.

Our budget strives to balance the very difficult fiscal pressures we are facing in FY24 with making minimal new investments that are responsive to our context and tied to our three essential priorities.

To further cope with our fiscal pressures, our budget also includes these strategic measures to limit the increase to the school tax rate:

• Utilizing $1.8 million from our debt service reserve, part of a multi-year strategy we initiated in the summer of 2021.
• Leveraging $7.8 million in remaining ESSERF funds (Elementary and Secondary School Emergency Relief Fund money granted to school districts during the COVID pandemic) for ongoing student recovery needs in mental and behavioral health and for learning acceleration.
• Moving $2.6 million in locally funded investments that are aligned with recovery goals into ESSERF.
• Making reductions totaling $775,000, primarily by spreading out the cuts across departments and priorities. For example, this budget includes a 5 percent reduction to all non-salary budgets across departments and schools.

In summary, our proposed budget calls for a 7 percent increase in the school portion of the tax rate. This reflects a 6.1 percent increase in expenditures, resulting in a $141.3 million budget, up $8.2 million over this year’s budget. The increase includes few new investments but maintains current programs and services, covers increased costs for salaries, benefits and debt service and allows us to strengthen academics and address student behavioral health needs while stabilizing our operational systems.

It requires an increased investment of $8 million from local taxpayers. To achieve that, we will need to raise the overall school tax rate by 50 cents for a total rate of $7.55 per $1,000 valuation. Our proposed budget this year would increase the school portion of the annual tax bill for the median family home in Portland (valued at $375,000) by $187, or about $15.60 per month.

A 7 percent increase in the school tax rate is historically high – previous recent increases have been 6.2 percent or less. However, this increase is in line with inflation, is less than the costs to continue our current budget, and does not include all of the requests advanced to address our needs.

More specifically, “rollover” cost increases to allow the district to simply continue what it is currently doing, coupled with the loss in state subsidy and other revenue adjustments, would require an 8.7 percent tax increase in FY24. Adding in other important programmatic budget needs/requests would require a tax rate increase of 15.5 percent.

Given those needs, we believe our budget is a fair proposal that enables us to maintain our Portland Promise gains for the 2023-2024 school year and to support our staff and students while being cognizant of Portland taxpayers.

On March 14, the Board voted to refer our recommended budget to its Finance Committee, which had its first review of the budget on March 15 – if you missed that meeting, you can watch on YouTube. The Finance Committee will hold a public hearing on the budget on Monday, March 20. On April 11, the full Board will vote to recommend a budget to the City Council, which approves the bottom line of the school budget. The Council is slated to vote on the school budget on May 15 to send to voters on June 13.

You can view our entire budget proposal HERE and the complete budget timeline HERE. We’ll continue to keep you updated throughout the budget process.

Sincerely,
Melea Nalli and Aaron Townsend
Interim Co-Superintendents