Student Success Act passes, promising $1 billion annually for education

Sen. Arnie Roblan and Rep. Barbara Smith Warner, co-chairs of the Joint Committee on Student Success, hugged and posed for pictures after the Student Success Act passed. (Photo by Jake Arnold, OSBA)

The Legislature has decided Oregon students deserve more, about $1 billion more a year.

The Student Success Act, a historic investment in Oregon education, cleared the Senate on Monday, with a promise of Public Employees Retirement System cost containment attached.

House Bill 3427 would create a new business tax dedicated to early learning and K-12 education. The tax would generate about $1 billion a year for education as well as a .25 percentage point reduction in most personal income tax rates.

“If you live in Oregon and you care about kids, you are standing on your desk, clapping your hands and screaming ‘Yes!’ at the top of your lungs today,” said Jim Green, OSBA’s executive director. “Many of us in Oregon have spent our entire adult lives waiting for the day we would fix our broken school funding model. That day is now on the horizon.”

About half the new money would be divided among districts based on enrollment. The rest would go to early learning and statewide initiatives to support students.

The bill passed on a party-line vote, with the Democrats holding the 18 votes necessary for a supermajority for tax bills. Gov. Kate Brown said in a statement that she looks forward to signing the bill.  

“Finally, today, we have a revenue package, a student success package,” said President Pro Tempore Laurie Monnes Anderson.

Democratic Sen. Betsy Johnson, a key swing vote on tax issues, announced on the floor that legislative leaders had promised her real PERS reform this session. With that assurance, she supported the Student Success Act. She said that if there wasn’t reform, she would support a ballot referral of the measure.

Senate President Peter Courtney said after the vote that they are working on PERS reform but that it would be a tough vote.

“It’s not going to be fun,” he said.

The Student Success Act came out of more than a year of work, with legislators traveling the state to learn what was working in schools and what they needed. Input from students, educators, community members and employers shaped the legislation.

The bill passed the House on a party-line vote after a marathon debate. House members on both sides of the aisle spoke passionately about the need to support public education, but Republicans opposed the business tax.

When the bill came up for a vote in the Senate on Tuesday, May 7, Republicans refused to show up, denying the Senate a quorum necessary for a vote.

Republicans returned Monday afternoon, giving the Senate enough members to hold a vote. To bring the Republicans back, Democrats agreed to give up a gun-regulation bill, Senate Bill 978, and a bill removing nonmedical exemptions for getting vaccinated, House Bill 3063.  

Senate Republicans agreed that schools needed and deserved better funding, but they opposed the business tax mechanism, saying it would hurt small businesses. Some business leaders have supported the bill, and the state’s leading business association, Oregon Business & Industry, said it would not oppose the bill.

Republicans also repeatedly raised the issue of PERS’ ballooning costs.

The Student Success Act has been set up so that all the money goes into an account outside the general fund and has to be dedicated to education programs. It cannot be used to fund PERS, but it could be used to backfill programs that were cut because of losses of State School Fund money.

The Legislature is considering changes to PERS to rein in costs. The Joint Ways and Means Capital Construction Subcommittee, which includes Courtney, Johnson and House Speaker Tina Kotek, held a hearing on PERS proposals Friday and will again Tuesday.

Sen. Rob Wagner, a Lake Oswego School Board member, praised the bill for its equity focus, “putting resources into students who need it most.”

Wagner said he also appreciated that the bill requires school boards to meet with their communities about how to use the money. He said the bill is an effort to build a better Oregon.

“This is a once-in-a-generation vote,” Wagner said.

- Jake Arnold, OSBA
jarnold@osba.org