State budget cuts wipe out feds' help

While teacher jobs will be saved, hope for rainy day fund is washed down the drain

With forecasts of a deepening financial hole in state coffers, Oregon schools will not be able to plan for a rainy day. The rain is here.

A week after Congress approved a bill that provided $10 billion to save teacher jobs — $117 million for Oregon — school districts anticipate that gain will be washed out by the state's revenue forecast on Aug. 26.

Money by district

Emergency federal funds to

save teacher jobs, by district:

Ashland $554,585

Butte Falls $51,364

Central Point $876,755

Eagle Point $832,719

Medford $2.4 million

Phoenix-Talent $565,621

Pinehurst $11,452

Prospect $59,677

Rogue River $199,666

The federal money still will likely save teacher jobs, up to 1,600, according to estimates by the Oregon Department of Education, but it ends whatever hopes the districts had of setting the money aside to save jobs in future budgets.

State economists have warned the state's budget shortfall could grow by $200 million to $500 million and total $1 billion by September.

"That effectively erases the federal funds," said Superintendent Phil Long of the Medford School District, which expects to receive $2.4 million from the congressional measure.

School districts may not have been able to stash the money away anyway. When Congress passed the bill, many districts across the state, including the Medford district, said they wanted to put the federal money in reserve in anticipation of a long drought in the state's economy, rather than immediately hire teachers or restore instructional days.

But the money was meant to stimulate the economy in 2010-2011, and federal guidelines prohibit using the so-called Edu Jobs funds to establish, supplement or restore a school district's rainy day fund, said Susanne Smith, a state Education Department spokeswoman.

The dilemma appears now to be moot and the fed funds likely will be gone before the end of the 2010-2011 school year, said Long, who was among the local school officials hoping to save the money for later.

Despite the warning that the federal money cannot be stashed away, Smith said, school officials' inclinations were understandable.

"Districts are wanting to hold on to this money, and really it's smart to be cautious at this point," Smith said.

Jackson County school districts said they will be very cautious until the state gives them a clearer financial picture.

"Unfortunately, the indicators don't look very positive for schools," said Ashland schools Superintendent Juli Di Chiro.

"I think most of us are going to wait for that date before we make any rash decisions," said Vicki Robinson, business manager for Central Point schools. "I would hate to go out and hire people now and then have to lay them off right away."

Reach reporter Paris Achen at 541-776-4459 or e-mail

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