On April 24, the Portland Board of Public Education presented its recommended $143.8 million school budget for the 2023-2024 school year to the City Council. Board Chair Sarah Lentz and Interim Co-Superintendents Aaron Townsend and Melea Nalli, who jointly made the presentation, told the Council that the budget is a fair and responsible one at a time of daunting fiscal challenges.
“This budget reinvests in core operations such as finance and human resources, while also investing in student-facing staff to support all of our students, including our many newly arrived multi-language learners,” they said. “Within this budget, we’ve also done our best to anticipate and plan for the FY25 budget, when the district will no longer have access to federal COVID money and will likely face decreased funding from the state level. This budget does all that while simultaneously being mindful of the tax burden on Portland residents in a year when inflation is higher than most can remember.”
When the Board approved the budget on April 11, it was expected that it would result in a 6 percent increase in the school portion of the tax rate. However, the district learned on April 24 that – as a result of an update to the City’s property valuation estimate – the budget’s impact on the tax rate will now be lower than 6 percent.
The Board’s recommended budget calls for a 5.7 percent increase in the school portion of tax rate. That is in line with inflation. It also is a significant downward revision from the district’s 15.5 percent original needs assessment increase, the 7 percent increase our co-superintendents initially proposed on March 14 and the 6.1 percent increase our Board Finance Committee recommended on April 3.
The budget would raise the overall school tax rate by 40 cents, for a total rate of approximately $7.45 per $1,000 valuation. It would increase the annual tax bill for the median family home in Portland (valued at $375,000) by $150 per year, or $12.50 per month.
The Council formally accepted the budget and referred it to the Budget to City Finance Committee for review. On Thursday, April 27, the City Finance Committee is slated to review the referred FY24 school budget and take a vote on recommending a budget to the full City Council. Agenda and joining information on that 5 p.m. virtual meeting can be found HERE.
Then, on Monday, May 1, the City Council will hold a first reading and public hearing on the school budget. On May 15, the Council will hold a second reading on the budget and vote to send it to city voters for a referendum vote on June 13.
The full budget statement that Lentz, Nalli and Townsend read to the Council on April 24 is below. View the entire Board recommended FY24 school budget HERE. A complete budget timeline and development materials are available on the district's website HERE.
Board recommended FY24 school budget memo:
Mayor Snyder and Members of the Portland City Council:
On behalf of the Portland Board of Public Education and in accordance with the City Charter, I – along with Interim Co-Superintendents Melea Nalli and Aaron Townend – are presenting our recommended FY2024 budget for the Portland Public Schools. The Board approved this budget unanimously on April 11.
Our $143.8 million FY24 school budget is responsive to the incredible, vast, and often conflicting needs of the Portland Public Schools at a time of daunting budget challenges. We feel strongly that the budget we present to you today is a fair and responsible one given the current circumstances.
This budget reinvests in core operations such as finance and human resources, while also investing in student-facing staff to support all of our students, including our many newly arrived multi-language learners. Within this budget, we’ve also done our best to anticipate and plan for the FY25 budget, when the district will no longer have access to federal COVID money and will likely face decreased funding from the state level. This budget does all that while simultaneously being mindful of the tax burden on Portland residents in a year when inflation is higher than most can remember.
We began the FY24 budget process facing formidable fiscal challenges. Inflation and other factors resulted in high costs. Coupled with an expected $2.4 million loss in state subsidy and other revenue adjustments, it would have required an 8.7 percent tax increase for a “rollover budget” in FY24. Adding in other important programmatic budget needs/requests would have required a tax rate increase of 15.5 percent.
Instead, the budget we present to you tonight entails a 5.7 percent increase in the school tax rate. The process to get to that figure has been thorough and demanding.
This budget is the result of many months of hard work on the part of the Board and district and school leaders and staff. It reflects many difficult choices informed by voices across our community through public hearings, emails, and conversations with the Mayor and City Councilors. While we tried to uphold as many as we could, ultimately many investments will not be included.
Our recommended budget does, however, meet our three key priorities for the 2023-2024 school year. Those priorities are: maintaining the commitment to the Portland Promise goals of Achievement, Whole Student and People – all intertwined with the 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.
Our budget also is responsive to Portland taxpayers – making use of a significant portion of previously unanticipated funds from a higher state subsidy than expected and health care savings to reduce the impact on the school tax rate.
We learned March 28 that the state had miscalculated its education aid to local school districts and that our district’s FY24 adjusted subsidy would be $3.6 million more than expected. The initial budget proposal from Co-Superintendents Nalli and Townsend on March 14 was built on information from the state that we would receive $2.4 million less in state aid than in FY23, so this additional net of $1.2 million more in state subsidy was very welcome news. In addition, our health insurance rates were recently confirmed as lower than budgeted, resulting in $400,000 in savings.
Our budget uses more than $1 million of these unanticipated funds to reduce the impact on local taxpayers, with the rest used to preserve core programming.
When the Board approved the budget on April 11, it was expected that our budget would result in a 6 percent increase in the school portion of the tax rate. However, the district learned today, April 24, that – as a result of an update to the City’s property valuation estimate – our budget’s impact on the tax rate will now be lower than 6 percent.
Our recommended $143,810,343 for FY24, which is up $10.7 million over this year’s budget, now calls for a 5.7 percent increase in the tax rate. That is in line with inflation. It also is a significant downward revision from our 15.5 percent original needs assessment increase, the 7 percent increase our co-superintendents initially proposed on March 14 and the 6.1 percent increase our Board Finance Committee recommended on April 3.
Our budget would raise the overall school tax rate by 40 cents, for a total rate of approximately $7.45 per $1,000 valuation. It would increase the annual tax bill for the median family home in Portland (valued at $375,000) by $150 per year, or $12.50 per month.
In the spirit of our collaboration with the Council throughout the FY24 budget process, the 5.7 percent school tax rate increase in our budget is within the 5-to-7-percent range of budget guidance provided to us by City Councilors.
Our budget uses the remainder of the unanticipated new revenues to preserve core programming and enable flexibility in managing the challenging budget outlook for the FY25 budget. That upcoming budget year is expected to be particularly difficult because our district will no longer have available ESSERF (Elementary and Secondary School Emergency Relief Fund) money granted to school districts during the COVID pandemic (even though the effects of the pandemic continue to remain) and we could have less state education aid due to the city’s continued rising property valuations. To help prepare for FY25, we are beginning work to initiate significant cost-saving structural changes while continuing to advocate at the state level for adjustments to the state school funding formula.
With the additional unanticipated revenues for FY24, we were able to make a number of revenue and expenditure adjustments to the budget originally proposed. For example, our budget returns community coordinator positions – community coordinators manage the volunteer program at local schools – to the local budget, and returns a number of core services that had been shifted to ESSERF in earlier versions of the budget to the local budget for FY24. These include math coaches, elementary and high school classroom teaching positions, high school youth development positions, and adding a literacy teacher leader and the equivalent of 1.5 positions to human resources and a grant accountant to further support improvements to district operations and finance.
Such local budget adjustments served to free up roughly $2.8 million of resources in remaining ESSERF funds to invest in key budget priorities for next year. The revised ESSERF budget contains additional investments to advance elements of the Portland Promise strategic plan in the next year. These include additional resources for summer learning, curriculum materials, and staffing.
Our budget also includes additional investments to be able to address the influx of newly arriving students with intensive language development needs. These investments include adding additional language capacity at the school and district level as well as providing for additional instructional capacity to serve students, including a dual language learner teacher at the pre-kindergarten level. In addition, the budget contains funds to support non-ESOL (English for speakers of other languages) educators to acquire their ESOL credential as the district takes steps towards supporting all PPS educators to have the skills and knowledge to differentiate for multilingual learners.
Other key highlights of our budget include increased investments in district employees that total just over $4 million. To help attract and retain staff during the nationwide labor shortage and ensure hard-working employees can meet the inflation-driven costs they face every day, we settled contracts this past fall with bargaining units representing teachers and educational technicians that included wage increases.
Higher operational costs also are part of our budget. Due to staffing turnover and shortages and systemic problems with our payroll system, the district had difficulties beginning last fall in paying all of our more than 1,500 employees in a complete and timely way. While most of the immediate problems have been resolved, we continue to work on a long-term solution by outsourcing payroll, a move recommended by the recent Spinglass audit. The budget includes about $775,000 to cover the costs of hiring payroll processor ADP and increasing staff in the finance and human resources departments – also recommended in the audit – as well as for shoring up transportation, facilities, and school meal services.
The budget also uses ESSERF money to add a few one-year-only positions to address class size challenges at a few grade levels in a few elementary schools to maintain class-size ratios in grades K-3. It also includes additional resources for the equivalent of 1.5 new teaching positions at Portland Adult Education (PAE) to respond to significant demand for programming. PAE may choose to use some of that funding in the short term to provide more compensation to its hourly teachers for the preparation work they do outside of the classroom.
This budget also reflects an increase of $2 million for out-of-district special education costs for students whose specific IEP needs the district is unable to meet in its schools. These costs are required by law.
It also includes debt service costs for the renovations to the four elementary schools in the Buildings for our Future bond approved by Portland voters in 2017. Lyseth Elementary was renovated in 2020 and 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, the district has been able to defer the impact of debt payments for these projects over time, but this budget includes a $2.2 million increase in debt service for FY24.
In summary, our Board budget is a balanced and reasonable one. It invests in all our students, including our newly arriving multilingual learners, provides fair compensation for our hardworking staff and shores up core operations, including finance and human resources, while being mindful of taxpayers. As I stated earlier, there still are a lot of needs not fully resourced in this budget, but it accomplishes some important goals and I am confident that it is the best we can do under current fiscal circumstances.
We ask you to join us in supporting this budget and sending it to Portland voters for final approval on June 13. The Portland community has shown at the polls year after year that they believe strongly in the importance of public education and also in the goal of the Portland Promise to make sure that all our students are prepared and empowered for college and career. This budget reflects those values, and we encourage you to approve it. Thank you.
Sarah Lentz, Chair
Portland Board of Public Education