NEWBERG, Ore. — Newberg-Dundee Public Schools is heading into next school year with a $5.7 million budget hole, and Superintendent Dave Parker says the squeeze is being felt everywhere — including in classrooms.
The district released its proposed 2026-27 budget last week, totaling $103 million districtwide, with a $61.25 million general fund. It comes on the heels of two years of significant cuts and a district still working to rebuild its financial footing.
“This is not a Newberg problem alone,” Parker wrote in his budget message to the district’s Budget Committee. “When this many districts face simultaneous financial difficulty, it reflects a systemic state funding problem.”
The budget does not account for the proposed five-year levy on the May 19 special election ballot. If voters approve the measure, which would assess $1.29 per $1,000 of assessed property value, the district says the levy could raise an estimated $32.5 million over five years, an average of $6.5 million per year, to help cover funding gaps.
Why the Gap Exists
Parker said the funding gap exists largely because the district’s costs keep climbing while the money coming in from the state has barely moved.
Oregon schools are funded largely based on how many students they serve. Districts receive money from local property taxes, and the state covers the remaining gap between those property tax funds and a per-student target. For 2026-27, the state sets that figure at $11,767 per student.
This school year, the district received $33.2 million from the state. Next year’s projected allocation is $33.0 million — essentially flat — even as the cost of salaries, benefits, transportation, and utilities has continued to rise due to inflation, insurance costs, and other external factors, Parker said. The per-student rate has not increased to reflect those rising costs.
At the same time, enrollment is falling. The district expects to serve about 4,428 students next year, down from 4,706 this year.
The decline does not appear to be a short-term trend. Current kindergarten classes total around 236 students, while the district’s three upper high school grades each enroll between 360 and 375. As those larger classes graduate and smaller ones move up, the district projects enrollment could keep falling through at least 2030.
Parker also pointed to a long-running gap between what the state funds and what a quality education actually costs. Oregon uses a framework called the Quality Education Model to calculate the real cost of running its schools. The state has never fully funded it, Parker said, and this biennium, the gap between what was recommended and what was actually appropriated is the largest it has been in 20 years.
“It isn’t the amount of money they gave, but that it’s not sufficient,” Parker said.
State-mandated programs — including new paid leave requirements and expanded unemployment eligibility for classified employees — have also added costs without additional funding to cover them.
“These are all things that have nothing to do with teachers in classrooms,” Parker said. “It just was money that we can’t spend on teachers in classrooms.”
What’s Being Cut
Personnel costs make up roughly 79% of the general fund. That means when the district needs to close a funding gap, it almost always comes back to staffing, Parker said.
Over the past two years, the district has eliminated 76.75 full-time positions — including 15% of administrators, 15% of teachers, and 12% of support staff.
Overall, the proposed reductions include 17.5 classroom teachers, 1.5 music and physical education teachers, 1.5 secretary positions, six teachers on special assignment, five special education assistants, one speech-language pathologist assistant, 2.5 English language development staff, one technology support staff member, a part-time data specialist, and two administrators.
The cuts do not touch reading specialists, counselors, or mental health support staff — areas building principals identified as priorities to protect even under financial pressure. But across the board, Parker said the district is pushing administrative cuts about as far as it can go without closing schools.
“We’ve only got two assistant principals at the high school and a principal. Every elementary school has one principal,” Parker said. “They’ll be down to 20 administrators over 10 buildings, but you still need someone running the show, right?”
Parker acknowledged the cuts will have real classroom consequences. About 35% of elementary classes would be blended, meaning students from two different grade levels would share a teacher. Without blending, he said, roughly a quarter of class sizes would exceed 30 students.
“My job shouldn’t be to screw that up,” Parker said of the district’s current elementary class sizes, which average around 20.5 students. “That ratio is a great ratio. But we’re going to have to do something to balance.”
An Unstable Reserve
One of the budget’s other urgent priorities is rebuilding the district’s financial cushion. That reserve — called the ending fund balance — essentially serves as a rainy day fund, allowing the district to manage unexpected costs without taking out short-term loans.
In 2018, the Newberg-Dundee School Board voted to establish a policy ensuring 7% of the district’s general fund would be preserved as the ending fund balance. The balance held between 12% and 14% until 2024.
The fund went negative in 2024, bottoming out at -2.0%. It was raised to $1.67 million in the 2025-26 budget and has since been partially restored to 2.9%, or about $822,000.
The proposed budget aims to rebuild toward a $1.5 million floor, but Parker described reaching the full 7% target as a multi-year effort still years away.
What Comes Next
The Budget Committee is scheduled to meet May 5, when it is expected to formally approve the budget. A public hearing before the school board is set for May 26, when the board will vote on whether to adopt it.
