The 2025 Niche report ranks Lake Oswego as the best public school district in Oregon. That ranking has long been attributed to the school’s teachers, programs and facilities. Now, though, those essential services are facing funding issues and budget cuts. Lake Oswego’s formerly unshakeable status may be threatened by these new budget developments as the district is challenged to reduce costs with its limited resources.
A recent bill was passed that increased the amount of money school districts are required to pay to Oregon’s Public Employee Retirement System (PERS). House Bill 4045 lowers the normal retirement age for police officers and firefighters from 60 to age 53 if the person has at least 25 years of retirement credit. The bill also reclassifies multiple types of public employees, including district attorneys, Oregon State Police forensic scientists and evidence technicians, to be covered under Police and Fire members instead of the former General Service category. These shifts provide more substantial retirement benefits and a lower retirement age, both of which raise the cost of retirement pension the state will need to pay. The state is optimistic about the change, and they forecast that House Bill 4045 will not have any impact on state or local revenue.
However, school districts across Oregon are of a different opinion: they estimate that they will have to pay $670 million more to PERS over the next two years. LOSD estimates that the changes to PERS will cost Lake Oswego $5 million alone, and this bill is hitting the district at a time when it has already exhausted its monetary reserves. Over the past few years after the pandemic, LOSD used its reserves to fund services and support for the generation of recovering students. Additionally, the district has approximately 200 more employees than it did five years ago even though it also has around 150 fewer students enrolled.
In response, LOSD is planning to undergo a Reduction in Force (RIF), which means the district will cut a number of employees in hopes of reducing its costs. Already, a spending and hiring freeze has been implemented, so the district is attempting to avoid hiring any new employees from outside of the district.
Although the governor has proposed an increase in public education funding, the district still lacks $12 million, which includes the $5 million of PERS increases and $7 million of unspecified expenditures.
To reduce its expenses, LOHS is planning to follow the district’s recommendations –– which have yet to be finalized –– on potential courses of action to take. Furthermore, LOHS Assistant Principal Jason Hohnbaum emphasized the importance of accurate forecasting: “Now, more than ever, it is important for students to accurately forecast for what they want next year.” There is not a specific minimum number of students for a class to run, but, generally, if 35 students forecast for a class, it is likely to happen. If that number is too low, or students end up dropping the class before the fall semester begins, the class may not operate. Still, Hohnbaum said, “We don’t really cancel classes, [but] we might cancel a section of something.”
In this time of financial uncertainty, the district encourages community members to reach out to legislators through email. However, until more funding is obtained, schools will be forced to cut costs and change their operating strategies, which may mean limiting or eliminating certain services.
