Board Adopts 2022-23 Budget

June 21, 2022 - At their meeting on Tuesday, June 21, the Board adopted the District's budget for the 2022-23 school year. Below is information from the Superintendent's budget message, which describes some of the major components and factors that went into its development.

The 2022-23 school year is the second of the 2021-23 biennium and therefore our funding level is already established. The 2021 Legislative Session set the State School Fund at $9.3 billion, which is $300 million short of what would have been needed to meet the Hillsboro School District’s Actual Service Level. With our district receiving approximately 3.4 percent of every dollar appropriated by the State, the insufficient funding equates to a shortfall in HSD of just over $10 million, or approximately $5 million for each year of the biennium.

Fortunately, there are other funding sources that have been made available to districts through legislative action and federal pandemic relief that will help us weather the coming year without having to make significant reductions to staffing levels or programming. In addition, the unique situation caused by COVID-19 in the 2020-21 school year led to a significant decrease in expenditures versus budget expectations, which I will describe below. 

The Student Investment Account (SIA), which receives fifty percent of the revenue generated by the Student Success Act (SSA), is fully funded for the second year in a row. Two-thirds of SIA funding is used for services that would have been eliminated from the 2021-22 and 2022-23 budget cycles due to insufficient state-level allocation, while one-third is used for investments based on stakeholder feedback and student needs as identified in the Accelerated Learning Plan. 

The High School Success Plan (Measure 98) will also be fully funded for the second year in a row. The High School Success Plan initiative provides $800 per high school student for schools to establish or expand career and technical education programs, college-level educational opportunities, and dropout prevention strategies. The Hillsboro School District has used its Measure 98 money to hire graduation coaches and student support and wellness counselors, as well as expand career-related learning courses and access to postsecondary opportunities. 

Over the course of the COVID-19 pandemic, the federal government has made support and recovery funds available to individuals, nonprofits, businesses, municipalities, and school districts. 

School district support has come through the Elementary and Secondary School Emergency Relief (ESSER) Fund, established as part of the Education Stabilization Fund in the CARES Act. There have been three rounds of ESSER funding made available to school districts as reimbursements for eligible expenses up to the allocation amount, which is based upon the formula used to determine a district’s Title IA distribution under the Elementary and Secondary Education Act (ESEA).

HSD’s allocations are as follows:

Due to the modified service models of Comprehensive Distance Learning and Hybrid in the 2020-21 school year, the District did not access ESSER Funds last year. Instead, we have carried the funds forward and allocated them on an annual basis as part of the regular budget development cycle, mapped backwards from their expiration date and targeting both operational and student needs.

These funds are considered temporary in nature, and the District is intentionally targeting them to provide temporary supplemental services for learning acceleration, safety and health, and stability in operations over the full length of time available. 

The disruptions and uncertainty caused by the COVID-19 pandemic had a significant impact on our students, staff, and families. Oregon schools had to spend approximately three-quarters of the 2020-21 school year in a Comprehensive Distance Learning (CDL) model, and the last quarter in a hybrid (in-person and remote) model. While far from ideal for learning delivery, there were operational savings realized as a result. The District’s participation in workshare and reassignment of staff that did not have work available during CDL, coupled with savings on substitutes, temporary staff, fuel, utilities, and supplies, led to the avoidance of $11,027,440 in expenditures versus what was budgeted. We also received special relief funds from the State ($431,201) and Washington County ($1,430,472) for a total of $1,861,673 in additional revenue. 

Because school districts are required to have a balanced budget where total resources equal total expenditures, we are not allowed to carry forward one-time resources beyond what is budgeted to achieve a zero sum balance. Therefore, the District will be reestablishing an Internal Service Fund into which $8.5 million of the surplus funds will be transferred and made available for future expenses. 

The District has established Internal Service Funds before, most recently in 2013-14 when money was set aside in a PERS Reserve Fund to offset pension cost increases. The fund was utilized within five fiscal years and exhausted in 2018-19. 

This current iteration of the Internal Service Fund will not be designated to a specific purpose, but rather may be appropriated as transfers to the General Fund by the Board during future budget development periods for uses such as Actual Service Level stabilization, technology replacement, PERS reserve, Strategic Plan initiatives, or curriculum adoptions. 

The 2021-22 school year has been a bit of a transition year between what could arguably be considered as a “typical” educational experience and the CDL/Hybrid model of 2020-21. We anticipate the 2022-23 school year to represent a more complete return to normalcy and hope to see a stabilization of our enrollment and student attendance. The Hillsboro School District, along with other districts across the state, has seen a decline in enrollment over the past two years due to the combined effects of pandemic uncertainty and decreased birth rates. We have based our 2022-23 budget on current enrollment projections and Actual Service Level projections, and will closely monitor enrollment trends to predict our budget needs for the 2023-24 school year and beyond. 

As we enter the fall of 2022, advocacy efforts for the 2023 Legislative Session will increase to ensure that state revenues maintain pace with Actual Service Level cost projections for the 2023-25 biennium. We invite you to stay informed and join us in those advocacy efforts as we work hard to ensure our students have access to all of the support, resources, and opportunities they need and deserve to pursue their dreams.