Legislators peer under the State School Fund hood

The Joint Ways and Means Education Subcommittee has planned 10 hearings on House Bill 5015, the State School Fund bill, and HB 5014, the related bill that pays for the Oregon Department of Education. The hearings started March 7 and will run into next week. 

Subcommittee Co-Chair Rep. Susan McLain, D-Hillsboro, said legislators are doing the reviews “to make sure the money is in the right place for the right purposes.” 

Legislative Highlights is offering a weekly look at the State School Fund process, “Funding Oregon’s Future.” HB 5015 will be public schools advocates’ most-watched bill.

HB 5015 allocates $9.9 billion for the State School Fund, the amount in Gov. Tina Kotek’s recommended budget, but it is by no means the final say on how much money schools will get. Oregon’s actual budget is written by the Ways and Means Committee. 

The committee’s co-chairs usually put out a framework budget in the next few weeks that includes a State School Fund proposal. That’s when the real haggling starts as advocates for different issues and programs argue for a share of the state's money. 

Oregon must have a balanced budget. According to the most recent economic forecast, Oregon will have $31.4 billion in General Fund and lottery resources to spend in 2023-25. State analysts estimate it will take most of that for the state to maintain what it’s doing now.  

But the Legislature is wading through more than 2,500 bills, many involving new costs. At the top of the heap are bills to address homelessness, early learning and workforce shortages that could cost hundreds of millions. 

Education advocates are seeking a State School Fund of $10.3 billion, the amount school business officials agree it would take for most school districts to avoid cuts. But legislative proposals ranging from adding panic alarms and carbon detectors to schools to increasing staff pay could add significant costs to budgets.

On Thursday, ODE Director of School Finance Mike Wiltfong told legislators that school district budgets just don’t have much wiggle room to absorb new costs. Current school budgets are almost entirely devoted to fulfilling state and federal mandates.

Subcommittee member Rep. Emily McIntire, a Republican who is an Eagle Point School Board member, told the committee of the difficulty of trying to meet the additional needs of high-performing and low-performing students when the district barely has adequate money for its core functions. 

The State School Fund discussion starts with the so-called “current service level” calculations, which attempt to extrapolate what it will cost in the next two years to keep doing what schools are already doing. School business officials said the state’s estimate falls grossly short of actual costs. 

Wiltfong noted for legislators that the state’s methodology uses past expense models and trends to try to predict future costs. 

“The challenge we have before us is that we are in unprecedented times,” he said. 

Most of the HB 5015 and 5014 hearings are devoted to information about ODE agencies, but the hearings on Thursday and Monday, March 13, were devoted specifically to the State School Fund.  

With nearly all the subcommittee’s members having experience in the classroom or board room, the legislators’ questions and debates have frequently veered into not only the ways Oregon is spending on schools but also how much it should be spending. 

The subcommittee’s page has links to future online meetings on HB 5015 and 5014 as well as recordings of the previous sessions. The subcommittee has pulled together a trove of meeting materials that include Legislative Fiscal Office analysis of the budgets and hundreds of ODE slides.

The Legislature sometimes adds to the governor’s proposal, and HB 5015 can be amended in the subcommittee or when it gets heard in the full Ways and Means Committee. It is rare for the amount to change after it leaves Ways and Means and goes for a vote in the House and Senate.

Because Ways and Means is not bound by committee bill deadlines, HB 5015 could linger until the closing days of the Legislature in late June. OSBA Legislative Services Director Lori Sattenspiel doesn’t expect it to go that long, though.

HB 5015 is the state’s biggest single expense, so it affects every other spending bill. Sattenspiel said OSBA and other education advocates will push for the bill to pass as soon as possible so school districts can set their budgets. School budgets must be finalized by June 30.

- Jake Arnold, OSBA
jarnold@osba.org

Previous Funding Oregon's Future stories:

March 6: Good ideas cost money, too

Feb. 28: Revenue forecast puts State School Fund possibilities in focus

Feb. 21: Adequate State School Fund is force for local control

Feb. 13: ‘Total investment’ in Oregon schools doesn’t tell full story 

Feb. 6: $9.9 billion State School Fund is better but students deserve more 

Jan. 30: Bill aims for true accounting of school funding needs 

Jan. 23: State School Fund is education policy made real