Dear Colleague,
This notification is to update you on the status of our work to respond to our uncertain economic times and build next year’s budget.

When last I shared information with you, the Governor had ordered an across the board reduction of 1.2% (in November 2008) to this year’s current budget and he was submitting a K-12 state wide budget proposal to the Legislature at the $6.4 billion level for the next biennium (begins July 1, 2009). In February 2009 the chief economist projected further deterioration in revenues and Hermiston set about it’s belt tightening exercises. I’m pleased to report that through this exercise, we collaboratively identified approximately $343,000 in savings to the current year and $1.8 million we could reduce next year without dramatic cuts or job losses. As a result of these efforts, Hermiston was well positioned for a K-12 state wide budget of approximately $5.9 billion (significantly below the Governor’s proposed level). I applaud your efforts to identify potential cost reductions, the collaborative input of all stakeholders including our employee associations, the insights of our budget committee, and stewardship of our school board. Our commitment was to reduce peripherals, preserve core programs, and retain jobs. We were able to do this at the funding levels described above.

Unfortunately, our economy continues to deteriorate. On April 9 I received a letter from Governor Kulongoski and State Superintendent Castillo (see attached below) anticipating even greater revenue reductions to the next biennium. The Governor is now asking K-12 schools to prepare for a state wide budget between $5.4 and $5.9 billion, approximately 15% below his recommended budget at $6.4 billion. You will note in this letter that education stimulus dollars and rainy day funds have already been consumed in trying to offset this precipitous decline. The Governor is asking for further reductions and even steeper budget reductions.

What does this mean to Hermiston specifically? The next revenue forecast is due out on May 15. If a state wide budget of only $5.4 billion is required because of that next forecast (the worst case scenario outlined in the Governor’s letter), it would mean another $2.0 million hit to Hermiston (on top of the reductions already identified)! This would most certainly mean program reductions and the possibility of a reduction in force.

As a result of the deteriorating situation, cabinet met this week to begin outlining further reductions to next year’s budget. We are outlining various scenarios between $5.9 and $5.4 billion. We also met with the district budget committee and the Hermiston school board to begin our planning assumptions.

Over the next several weeks we will meet with our employee associations and various stakeholder groups as we identify potential reductions. Obviously, we will not be able to identify specific reductions until after the May 15 update from ODE.

I am also asking school administrators to cancel all non essential activites and expenditures this year, including some field trips and other activities, because every dollar saved today will help to reduce the severity of reductions required for next year.

Finally, please know that Hermiston is in far better shape than most school districts across the state. Our underlying economy in Hermiston is strong, as evidenced by our strong commercial activity, excellent credit rating, and increasing student enrollment. Do NOT give in to panic. It is important that you keep focused on what is most important…taking care of our students. I appreciate what you do everyday to keep moving academic reform forward and improve the lives of all in our community.

Hermiston is a great place to be and it’s great to be a bulldog! Please feel free to contact me with any questions or concerns you may have.

Fred Maiocco
Superintendent of Schools

Referenced letter from Governor Kulongoski and State Superintendent Castillo