Earlier this month, the Salem-Keizer School District in Salem, OR began cutting its 2024-25 budget. The ultimate goal is to reduce its $605M general fund budget by almost 12, but it represents only about 5% of the school district’s $1.276B total budget. Shrinking revenues and the elimination of federal COVID-19 funds have necessitated the cuts. Initially, the district will focus on bringing its General Fund in line with its anticipated revenues.
The first announced cuts include reduced computer purchases, and the elimination of vehicle purchases, conference travel, and raises for administrators. Those reductions and eliminations will save the district $7M. The district also plans to reduce payments to a fund designed to resolve retirement debt for retired employees. In addition, it plans to delay the start of planned career technical education programs, eliminating furniture and playground equipment purchases, and increasing the cost to third-parties for renting the district’s facilities. Those actions will save the district another $19M. An additional $4M in savings will come from administrative layoffs.
But those budget cuts account for only $30M of the required $70M in general fund spending reductions. The district does not plan to announce how it will reach its goal until after the first of the year. That’s because the district still needs to negotiate reductions with its union members. Regardless of the outcome of the negotiations, all parties expect that the later cuts will include a significant number of personnel reductions. One stated target for reductions includes workers who do not work directly in the district’s school buildings. In other words, district administrators and office workers are likely to be cut first.
Budget feels immediate impact of hiring
Some of the district’s highest-paid administrators and supervisors received a 7.85% salary adjustment over and above the raises they received in 2022. At the time, this move was meant to equalize the district’s salaries with those of neighboring districts.
These cuts will not stop additional layoffs that will directly impact personnel at the district’s school buildings. Superintendent Andrea Castañeda, who took her position in July, says that the district’s deficits come – in part – from hires the district made during the pandemic. The impact of the extra salaries, along with annual raises for those positions and unstable inflation, have increased the district’s expenses faster than its budget can accommodate.
It’s an important admission. Hiring has long-term consequences. When an institution hires one person, it takes on that person’s salary, but also annual raises and benefits costs throughout that hire’s employment period. When an institution hires multiple new workers, it compounds the annual costs of maintaining that group’s employment and benefits. These costs quickly strain the budget.
At WCC, there was a certain amount of accepted wisdom in the agreement that maintained strict parity between the size of the administration and the size of the professional faculty. It was a cost control measure that’s been discarded. As a result, the cost and size of the administration has exploded. This is evidenced by the fact that WCC – which is a medium-sized community college at best – has 10 Vice Presidents on the payroll.
Unstable or unpredictable revenues cannot support indiscriminate hiring. The Salem-Keizer School District is learning this lesson the hard way. Institutions that prioritize administrative hiring over instruction will eventually be required to follow suit.
Photo Credit: Damian Gadal, via Flickr
