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PERS pushes budget increases

Medford School District’s proposed 2019-2020 budget shows mostly growth looking ahead to the next two years of state funding.

“The reason we’re not crying super poor right now is this is not that far off from normal increases,” said Dr. Brian Shumate, superintendent of Medford schools.

The largest school district in Jackson County estimates its budget will grow by $5.8 million next year.

Eighty-three percent of the increase, however — or $4.93 million — will cover increases in employee payroll benefits.

“The thing that’s killing people is the (Public Employee Retirement System) thing,” Shumate said. “We have been ... very prudent, really — trying to put money back when we get true-ups.”

The Medford School District expects to see increased student enrollment and add 11 full-time staff next year, but unfunded liabilities loom in future years. In the last five years, two unfunded mandates in its budget have totaled a $12 million loss, according to the district.

That could spell staff and service cuts by the next biennium, according to a document provided to the Medford Budget Committee.

“Assuming K-12 funding continues to grow 4-4.5% per year over time, assuming PERS cost increases continue to grow at the current or higher rate and/or assuming SpEd unfunded mandates continue to grow in line with recent trends, the District is going to have to restructure/reduce overall services/staffing beginning with the 2021-23 biennium to balance the budget in 2021-22,” the document reads.

MSD will keep to around its current service levels in the coming year, as rising health care costs and a still-deepening PERS burden eat up the funding increase.

The increase in payroll and benefit costs include a 2% cost-of-living raise as well as built-in STEP salary increases based on teachers’ experience and education levels.

In the past five years, Medford has added about 197 full-time staff, 145 of whom are instructional personnel.

Increasing staff in areas from online programs to special education, is part of what district officials credit with a more than 15% jump in graduation rates from 2014 to 2018. Smarter Balanced assessment scores have also increased in that time frame.

“We’re very focused on investing directly in education,” said Brad Earl, the district’s chief financial officer.

Medford continues to anticipate increasing enrollment, bucking the state trend of stagnant enrollment.

Because the district is expecting to see almost all of that increase in online school, it plans to add two full-time licensed positions in online programs.

But the changing needs of that growing student body also play a role in another burgeoning deficit in Medford’s budget.

The number of Medford students who qualify for special education services has shot up in recent years — 34% more in the past four years — which brought the total proportion of students with Individualized Education Plans to 15%. That’s expected to hit 16% next year.

Students who have IEPs bring in extra funding from the state — but only up to 11% of the district’s student population, per state policy.

That leaves an unfunded 4% in Medford’s budget this year of students who are using special education services.

The number is projected to increase to 5% by next school year, or a third of the students, which translates to about $6 million each year, according to the district.

“We’re not backing away from our obligation to provide services,” Earl said. “It’s just getting complex.”

Six new full-time positions will be added to special education department next year, specializing in early intervening services, psychological services and behavior supports. The district also plans to focus more on properly identifying students needs to determine if they are eligible for IEPs or 504 plans instead.

Shumate, Earl and John Petach, finance controller, presented the proposed balanced budget to the Budget Committee at its first public meeting Monday night. The committee will review and, if it chooses, revise the budget before June 17, when the school board is scheduled to vote on it.

The district is also negotiating new contracts with both its licensed and classified staff that will begin after the current contracts expire on June 30. Those negotiations could also factor into the next budget.

Reach Mail Tribune reporter Kaylee Tornay at ktornay@rosebudmedia.com or 541-776-4497. Follow her on Twitter @ka_tornay.

View the presentation delivered to the budget committee at its April 29 meeting below:

Educators and their supporters rally Wednesday on the Garfield Street freeway overpass to bring awareness to issues involving school funding. Photo by Denise Baratta