PERS reform may provide additional funding

West Linn-Wilsonville School District administrators and school board members were not shocked by the release of Gov. John Kitzhaber’s budget proposal on Nov. 30, which carves out $6.15 billion for K-12 schools.

The $6.15 billion is an increase of 8 percent from the current budget. Overall, Kitzhaber’s $16.5 billion general fund budget represents a 10 percent increase from the current $15 billion budget.

Doug Middlestetter, West Linn-Wilsonville School District business manager, said the district anticipated a $6.3 to $6.5 billion K-12 budget proposal.

“My summary for the governor’s budget is this: stable,” Middlestetter said during the school board meeting Tuesday. “I think the 2013-15 budget as a whole is actually workable.”

School board members did, however, question the effects of Kitzhaber’s proposal to reallocate money from Education Service Districts (ESDs) — organizations that provide school districts with an array of educational programs and services, many of which are too costly or limited in demand for a single school district.

Kitzhaber recommended re-allocating up to $120 million currently provided to ESDs through the State School Fund formula to Student Achievement Centers — regional centers focused on promoting excellence in teaching for teachers, faculty, childcare and early education professionals.

The West Linn-Wilsonville School District is one of 10 school districts served by the Clackamas Education Service District. Middlestetter said it’s unclear how the re-allocation of ESD funding might fully affect the district.

“The last time the state made reductions to ESD it wasn’t very long before ESD presented us with a list of reductions and services as a direct result to their budget reductions,” he said. “If their services are cut dramatically, I’m afraid they are going to have a direct impact on us.”

Superintendent Bill Rhoades reiterated that the financial impact of the ESD will affect the school district, though the effect may not be dire.

“We don’t take advantage of as many ESD services as some districts do,” Rhoades said. “We will have to plan for what a scenario might look like as the governor has presented it.”

Additional funding

Kitzhaber’s proposed budget offers additional educational funding — about $90 million for teaching positions, programs and cut school days — but the results rely on not only budget approval but controversial changes made to the Public Employees Retirement System (PERS), which require legislative action.

Currently under PERS, retirees get a yearly 2 percent cost-of-living increase in their pensions. Kitzhaber aims to limit the increase to the first $24,000 of pension income, which could affect more than half of public retirees.

Kitzhaber anticipates the PERS changes will be challenged in court, and he anticipates winning. The West Linn-Wilsonville School District and board members do not share such optimism.

“What I’m hearing from other school district’s business managers is extreme pessimism as to the effectiveness of PERS reform,” Middlestetter said. “The budget has been so over-the-top positive about how well this is going to work. ... This is unlike anything I’ve ever seen before, but these are times we’ve never seen before.”

School board member Betty Reynolds said Kitzhaber has been very vocal and committed to PERS reform.

“Even though the governor is committed to reducing cost drivers like PERS, it may require legislative action and there is a big potential for a court action,” Reynolds said. “It’s an unknown at this point.”

“Welcome to the world of the unknown and a new biennium,” Rhoades added.

The Oregon Legislature will be adjusting Kitzhaber’s proposed budget in the coming months. The West Linn-Wilsonville School District Budget Committee will host five to six meetings throughout December and continuing through the spring to review the proposed budget. For more information, including budget committee meetings, visit

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