Lake Oswego School District updates financial model ahead of budgeting season

Spring is right around the corner and that means it will soon be time for school district budget season. With a historic $10.2 billion granted to the State School Fund for the next two years, districts across the state will soon begin to decide how to budget state and local funding.

On Tuesday, Feb. 20, Lake Oswego School District Assistant Superintendent of Business Services Stuart Ketzler presented a financial model update for the school board.

The changes to the original financial model and budget are due to the updated revenues from the 2023-25 biennium state appropriation, increased costs from new unemployment insurance rules and increased PERS rates that take effect July 1, 2025.

The new unemployment insurance rules went into effect on Jan 1. They allow 10-month classified staff to claim unemployment during school breaks of a week or more even if they “have received reasonable assurance of having their job available after each break,” according to Ketzler’s informational memo.

“While the total cost of this change will depend on the number of staff that submit unemployment claims and their specific employment history, a ‘middle case’ scenario indicates that LOSD’s costs would increase by $1.4 million for the 2024 calendar year compared to prior years,” the memo continued.

Ketzler added during the board meeting that a full understanding of the financial impacts of the change wouldn’t be quantifiable until late fall.

As for PERS, Ketzler anticipates an additional $2.5 million in increased expenditures in the 2025-26 fiscal year because of a roughly 4% increase in rates.

“Those are two things (the unemployment rules and PERS) that will increase our costs, it’s just by a matter of how much. Positively, off-setting that is continued good news from the state revenue forecast,” said Ketzler. “Even though we’re less than nine months into a 24-month biennium, the corporate kicker is expected to devote almost half a billion dollars towards the SSF for the 25-27 biennium and that’s good because we’re going to need it with the cost increases that we have.”

Ketzler continued that the adjusted models he used assume a $800 million increase in the state school fund following the 2025 legislative session.