PORTLAND, Ore. (KOIN) — With 3,500 fewer students coming to Portland Public Schools, that means a drop in state dollars for education. Now, PPS leaders are having tough budget talks for the next school year.

The 2022-2023 budget totals $1.87 billion, which is slightly lower than the previous year.

Portland Public Schools Superintendent Guadalupe Guerrero says his budget keeps the basic core functions running, while also using one-time federal and state COVID relief funds to address student’s learning and social and emotional needs.

“In the last few months, there has been a lot of speculation about whether there will be teacher layoffs. I can now share with you that no classroom educator nor any licensed educator will experience a layoff,” Guerrero said. 

But in order to pull that off, the superintendent and his chief financial officer are proposing to pull $40 million from the general funds — think of that like your savings account.

That would drop the district’s financial reserves down to 6%, when they typically like to keep at least a 10% financial cushion. This move put several school board members on edge.

“It makes me shiver a little bit because if we have a plan for what we’re going to use the $40 million for, but we don’t have a plan for how we’re going to replenish that moving forward,” school board member Gary Hollands said.

PPS board member Amy Kohnstamm added, “I think that it’s no question that it’s a risk Director Hollands and it’s a risk on us as a board because it’s our policy as to where we want the reserves to be. So, that’s our conversation to have without knowing what the future holds.”

Vice Chair Andrew Scott noted “I’ll take it a step further, it’s not just a risk, it’s a reality. The use of one-time funds puts off cuts until later.”

Board members say dipping into the savings account may be the best move to make considering the learning loss amid the pandemic, but there are trade-offs.

“Lets not hide from the public the reality using $40 million one-time this year means the cliff is steeper next year,” Scott said.

Highlights of the current proposed budget include work on lowering class sizes, especially for less affluent students, and it ensures every school will have a counselor and mental health professional.

As PPS board members work to balance next year’s budget, the final decision is still to be determined.