Bill aims for true accounting of school funding needs
Richard Donovan, (left) OSBA Legislative Services specialist, and Louis De Sitter of the Oregon Education Association were among the education advocates testifying Wednesday in the House Education Committee in favor of Rep. Courtney Neron’s (center) bill on determining stable funding for schools. (Photo by Jake Arnold, OSBA)
Before legislators can talk about what Oregon should be spending on schools in the next biennium, they have to know what schools need just to maintain their current services, staff and programs, known as “current service level.”
But since 2017, state analysts and school officials have told legislators two different numbers, hundreds of millions of dollars apart. Weeks of legislative time is spent haggling over what the true number is rather than talking about what Oregon should be spending on its students.
Rep. Courtney Neron wants to create a process for everyone involved to agree on a current service level calculation number before the start of the Legislature.
“The goal of House Bill 2739 is simply to get the right answer to a math problem,” said Neron, D-Wilsonville.
Education advocates – including representatives from OSBA, the Oregon Association of School Business Officials, the Oregon Education Association and the Coalition of Oregon School Administrators – offered support for the bill during a Wednesday House Education Committee hearing. No one raised opposition.
Legislative Highlights is offering a weekly look at the State School Fund journey, “Funding Oregon’s Future,” so school board members can be informed about how the state considers and processes their districts’ funding needs. The current service level is foundational to the debate.
Right now, state analysts begin calculating about a year before the long legislative session how much agencies will need to continue at the same level into the next biennium. They use formulas that look at past costs and state mandated caps on things such as health care premiums. Since 2015, they have done it without education representatives at the table.
For 2023-25, the Department of Administrative Services and the Legislative Fiscal Office said a 2.3% increase of the State School Fund to $9.5 billion would be sufficient to avoid cuts at schools. School business officials say staff compensation costs, which make up about 85% of school budgets, are running more than double that 2.3%.
“Our contracts don’t appear to be anywhere close to ... what the state of Oregon has for their contracts with their unions,” said Mike Schofield, the Beaverton School District associate superintendent for business services.
With a $9.5 billion State School Fund, Beaverton would have to cut roughly $20 million from its budget while using as much as $40 million in reserve funds, he said. Many of the cuts would hit the programs put in place to help students hurt by the pandemic.
Starting with the 2017-19 budget, OASBO has created its own calculation using school districts’ actual existing contracts and budget planning. For 2023-25, OASBO talked with nearly 50 districts representing almost 80% of Oregon’s student population, according to OASBO Executive Director Jackie Olsen.
OASBO estimates the state needs a $10.3 billion State School Fund for most school districts to remain whole.
Forest Grove School District Superintendent David Parker said consistent and reliable funding is crucial to sustaining the district's progress. He said the district’s share of $10.3 billion would be in line with the way actual school costs have risen.
“With the challenges we have, we need investment, not the opposite,” he said.
Neron, who is a chief sponsor of HB 2739, introduced the bill Wednesday to the House Education Committee, where she is chair. She noted that the bill does not call for full funding or even additional funding for schools, nor would it in any way infringe on legislators’ ability to decide what the State School Fund should be.
Instead, she said, it is aimed at reducing confusion while getting to a true accounting of schools’ needs.
The bill would require a committee with at least 13 members to work out a tentative budget for schools’ current service level. The committee would include representatives from state government, the Legislature and education, including school boards, administrators, staff unions and school business officials. Education representatives were part of the discussions before 2015.
The committee would come up with a methodology for establishing CSL, although the bill stipulates it would have to use what is known as the 49/51 split.
The State School Fund covers two budget years. Traditionally, schools’ allocation is divided with 49% in the first year and 51% in the second year to account for inflation for the second year. But since 2015, state analysts have calculated CSL as if the previous allocation had been split 50/50.
A 50/50 split assumes a smaller amount in the second year of the budget than schools actually get, which in turn lowers the calculation for the next budget allocations. For the 2023-25 State School Fund, using a 50/50 split in the calculation lowers the amount for schools by $138 million.
Neron wants to take politics out of the current service level accounting so the Legislature hears a “true no-cuts budget.” Only then, she says, can Oregon begin to talk about funding a full vision of what the education system should be.
“We have the ability to be very accurate. It’s a matter of whether we have the will to stomach the number year after year,” Neron said. “We frankly don’t fund our expectations of education.”
- Jake Arnold, OSBA
jarnold@osba.org
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