The Philomath School District faces the possibility of losing more than $1 million in state funding over the next two years if the Oregon Legislature eliminates the Local Option Levy Equalization Grant.
The potential cut was discussed at Thursday night’s Philomath School Board meeting with district officials expressing alarm over what such a loss would mean for operations, particularly if the elimination takes effect during the current school year.
“We’ve already hired teachers, we’ve already committed to their contracts, etc.,” School Board Chair Tom Klipfel said. “There’s very limited amounts of things we can do and they are very painful. Cutting school days or radically reducing staff in a very sudden way would be the only way out of this.”
The Local Option Levy Equalization Grant was created by the Oregon Legislature in 2001 to provide more equitable funding for districts with lower property values. The program ensures that districts can raise comparable revenue as wealthier districts at the same tax rate by allocating state funds to help bridge the gap.
Philomath has relied on the grant since voters narrowly passed the district’s first local option levy in 2013. That measure, which initially made the district eligible for $250,000 in state equalization funding, reportedly helped avoid $500,000 in operational cuts that would have included moving to a four-day school week, reductions to middle school and high school athletics and activities, and the elimination of two full-time equivalent positions.
The district received $736,746 in equalization grant funding in 2023-24 and $844,599 in 2024-25. The current budget conservatively projects $600,000 for 2025-26.
However, proposed cuts from the Oregon Department of Education include eliminating the equalization grant for the 2025-27 biennium. If approved, Philomath would lose approximately $1.2 million over those two years.
The timing poses a particular challenge. The Legislature is scheduled to meet next month for a short session, and if the grant is eliminated, Philomath could face a $600,000 shortfall that would need to be absorbed in the final third of the 2025-26 budget year.
“The superintendents and other boards are pushing aggressively back on the Legislature,” Klipfel said. “If you’re going to take this away next year, that’s bad enough, but to take it away this year would be truly and completely devastating.”
Superintendent of Schools Susan Halliday said she has already reached out to local legislators to provide advance information ahead of the legislative session.
With support from the Coalition of Oregon School Administrators, districts that currently receive equalization grant funding plan to send a letter to the Ways and Means Committee and the Education Sub-Committee requesting strong consideration against the proposed cut.
The possibility of cutting school days — a scenario that was narrowly avoided with the 2013 levy passage — looms once again.
“Cutting school days is a terrible, terrible, terrible scenario and I sure as heck hope we don’t have to go there,” Klipfel said. “But if this happens, frankly, there are not going to be many other options.”
Halliday noted that budget planning for next year will need to include serious conversations about potential scenarios, especially if the Legislature opts for a phased elimination of the grant.
“In budget prep for next year, we’re really going to have to have conversations about it, especially if they’re leaning towards making a decision of we’ll give you one year but not the other,” Halliday said. “Our hope is that they would say we’re not going to take it away from you at all, which would be ideal.”
Philomath voters most recently renewed the local option levy in November 2022.