More details emerge on Student Success Act, including possible tax structure

Rep. Greg Smith, (from left) Rep. Barbara Smith Warner and Sen. Arnie Roblan shared at a news conference Thursday how the Joint Committee on Student Success’ tour of Oregon schools influenced the committee's education investment legislation. (Photo by Jake Arnold, OSBA)

The Joint Committee on Student Success leaders unveiled a detailed draft Thursday of their plans for roughly $2 billion a biennium in education investment.

House Bill 2019, the Student Success Act, would create a dedicated revenue stream for three education-focused accounts outside the General Fund. The actual bill should be ready Tuesday, according to committee Co-chair Rep. Barbara Smith Warner.

The draft discussed Thursday night in a committee hearing proposes sweeping investments in early learning, equity, safety and social-emotional supports, with districts able to make choices about how they would use the money. The exact funding mechanism and amounts, which will be part of the act, are still being worked out.

The committee’s revenue subcommittee is considering a commercial activities tax on gross receipts and two modified versions of the tax that allow some deduction of labor or other inputs. The tax would kick in at $150,000 in receipts and be a flat rate of $250 for receipts up to $1 million to protect smaller businesses.

Depending on the exact rate and possible exemptions, the business tax would net in excess of $2 billion a biennium after some accompanying cuts in personal income tax rates. The tax would not be implemented until 2020, though.

“It’s not enough,” said Sen. Lew Frederick, D-Portland, at Thursday night’s hearing.

The committee’s tour of Oregon schools last year resulted in a December report detailing more than $3.5 billion in education needs after decades of underfunding. Some committee members have continued to push for education investment beyond leadership’s stated $2 billion goal.

Committee leadership, however, is aiming for a revenue-raising measure that can garner bipartisan support and survive an expected ballot measure challenge.

Committee Co-Vice Chair Rep. Greg Smith, R-Heppner, has been among the voices urging caution on new spending, but he has also said Republicans would support targeted education investments.

“There is some tremendous economic benefit to Oregon if these dollars are used correctly,” he said during Thursday’s hearing.

Part of the committee’s strategy has been to make sure any new revenue is clearly marked for education. According to the draft, the bulk of the new money would be divided among three accounts: 50 percent for a School Improvement Fund, 30 percent for statewide initiatives and 20 percent for early learning.

A small portion of the new revenue could be used to stabilize the State School Fund at current service levels, according to committee Co-chair Sen. Arnie Roblan, D-Coos Bay. The rest would be dedicated to addressing the needs the committee saw while touring the state last year.

School Improvement Fund grants would be targeted toward improving student achievement, with an emphasis on closing achievement gaps for disadvantaged student groups.

To get grants, districts would have to submit four-year plans that include proposals to address students’ mental and behavioral health. Districts would have to assess needs and commit to reviewing the academic return on investment of all district programs and using data for equity-based decision making.

The framework lays out four broad uses for School Improvement Fund grants:

• Expanding learning time, including summer programs and reducing time lost to assessments.
• Student health and safety programs, as well as adding health professionals and improving facilities.
• Class-size reduction.
• Expanding learning experiences, including early literacy programs and broadening class options.

Grant money would be distributed using the same formula as the State School Fund but with double the weight for students in poverty.

The Oregon Department of Education would establish district targets tied to the grants for on-time graduation rates, students who finish ninth grade with six credits, third-grade reading level achievement, attendance and possibly additional local goals.

Roblan said improving these measures was the primary committee goal.

If a district doesn’t meet its targets, it would enter the ODE Student Success Team Coaching program for one year, where it would receive technical assistance from professionals with successful track records. Oregon’s highest needs districts would enter a four-year program and receive additional funding per student. Funding would be contingent on following recommendations.

Smith Warner, D-Portland, said the committee wanted to maintain local control while still requiring some accountability. She envisioned a feedback loop in which districts helped shape the monitoring.

“We want to help schools,” she said.

Rep. Cheri Helt, R-Bend, suggested the Student Success Teams should be housed in the education service districts to make them more accessible. Helt, recalling her school board experience trying to improve schools, praised the plan’s ambitions.

“This is the most exciting work that I’ve ever been a part of,” she said.

The Student Success Teams would be required to present recommendations to school boards. School boards would be required to approve their districts’ plans and grant agreements in open meetings and receive annual reports on performance targets.

The statewide initiatives account would give priority to funding the Student Success Teams and ODE’s administrative costs for the bill. It could also offer money for full funding of Measure 98, universal free meals and a student reengagement program, as well as other statewide programs.

The early learning account would give priority to full funding of Early Intervention/Early Childhood Special Education and relief nurseries. It could also be used for an Early Childhood Equity Fund, for early childhood educator professional development and for other early learning programs.

During the hearing, legislators pointed out some of the plan’s deficiencies, especially its lack of specifics on wraparound services and recruiting, developing and retaining a diverse and skilled educator workforce.

Committee members also noted the plan doesn’t address cost containment issues such as soaring Public Employees Retirement System rates. Roblan said he was told PERS would be addressed in other committees.

The Student Success Committee has become a catch-all for education bills, with dozens of measures referred to it. Smith Warner said some of those bills would be worked into the Student Success Act while others could be used to address members’ issues.

- Jake Arnold, OSBA
jarnold@osba.org