Oregon School Districts: Calls For Superintendent’s Dismissal Following Newberg-Dundee Budget Deficit

Before a fraught budget hearing on Monday night, around 100 people rallied as the community is increasing pressure on the Newberg-Dundee School District to fire the superintendent.

Despite previously indicating that there was no cause for alarm, the superintendent and other administrators told the school board in May that the budget overspending ran into millions of dollars.

The budget drama is the latest of several unfortunate events unraveling in Newberg, as schools across Oregon face similar budget crises such as:

• Ashland School Board is reducing classified staff and athletics director to accommodate budget cuts of at least $1.3 million
• Budget cuts to fix Medford School District’s $15 million deficit opposed

Issues At Newberg-Dundee School District In Oregon

Unrest in the district harks back to the fall of 2021, as non-budgetary issues arose. Several conservative-leaning school board members voted to ban teachers from displaying LGBTQ+ pride or Black Lives Matter flags in their classrooms. The educators said they sought to avoid political distractions on school property but the school board ultimately rescinded the ban after a Yamhill County judge ruled it was unconstitutional.

The ban set off several lawsuits, resulting in Joe Morelock, the last superintendent, losing his job as he refused to enforce the ban. In 2022, board members replaced him with Dr. Stephen W. Phillips at a current salary of $215,000.

On Monday, school board Chair, Nancy Woodward, said board members were told in March that the superintendent, finance director, and deputy superintendent needed more time to finish drafting the budget for 2024-2025. At the time, board members believed they would start the upcoming school year with a surplus of $8.6 million.

Yet later in May, Phillips, Deputy Superintendent Scott Linenberger, and Finance Director Heather Bixby indicated the district was $3.7 million short of what it needed to pay its bills in the current fiscal year, with an approximate shortfall of $14 million for 2024-2025. Jackie Olsen, executive director of the Oregon Association of School Business Officials, later stepped in to assist, whittling the numbers down to $1.7 million and $12.2 million, respectively.

Newberg, a smallish school district, enrolls about 4,000 students and has an overall operating budget for next year of $56 million. Olsen indicated that the massive $12 million cut could lead to laying off 60 employees, cutting 10 days from the school year, and postponing new science and health curriculums to balance the budget.

The final decision will be made by administrators but is unlikely to be made before August.

Olsen, Woodward, and others gave several reasons for the Newberg shortfall:

• Property taxes collected are less than previously projected.
• Despite losing around 800 students since the start of the pandemic, the school district has been on a hiring spree.
• The district overspent its transportation and special education budgets.

There are rumors that Phillips wanted to shutter the 192-student Joan Austin Elementary School and generate income by leasing the building to George Fox University as a childcare center, but the board had not discussed this proposal which could take months to negotiate and finalize. Woodward said it’s obvious last year’s budget didn’t have enough controls and the district was overspending.

In the interim,  Phillips acknowledged that his administration had not delivered enough financial oversight and indicated he would forgo any anticipated salary increase for the next year, as the number of employees in the district office would likely be reduced by 25%. The Budget Update indicates that there is a public hearing on the proposed budget scheduled for June 24.

Newberg-Dundee School District Superintendent Under Increasing Scrutiny

Controversies around Phillips followed into his tenure in Newberg, who resigned as deputy superintendent in the Beaverton School District in 2018 after retweeting a claim that “illegal aliens” were responsible for the deaths of thousands of American citizens annually. This sparked a community outcry.

Following Beaverton, Phillips spent several years as the superintendent of the Jewell School District until his 2022 move to Newberg. The following year, Newberg-Dundee voters summarily ejected the conservative-leaning majority on the board from office, tilting the ideology of the school board to progressive.

In March 2024, a former student, identified only as “Jennifer Doe” filed a lawsuit against the district. She alleged Phillips and other administrators knew a teacher was sexually abusing her when she was 14 but didn’t intervene promptly, and allowed the teacher in question to transfer to a different school district quietly. Phillips, though, stayed put.

Newberg has also seen significant turnover among administrators, including its directors of finance and communications as well as the director and coordinator director of special programs.

Complaints have been filed complaints against Phillips with the state Labor Bureau by 4 former employees, alleging that he created a hostile work environment, saying he discriminated against them based on age, demoted some without cause, and reached out to new employers to threaten and disparage employment of former employees. A Labor Bureau spokesperson, Rachel Mann, said the complaints are still under investigation.

Portland employment attorney firm, Ogletree Deakins has been engaged and will meet in a closed-door executive session Tuesday night to consider the discipline or dismissal of an employee. A further consideration will be “consultation with legal counsel regarding current or probable litigation.”