Revenue Sources

Revenue is generated or received by elementary/secondary school districts from: the State School Fund, local property taxes, federal aid and other sources.

State School Fund

The State School Fund is the major appropriation of state support for public elementary and secondary schools. The State School Fund is distributed to school districts according to the following formula:

School Funding Formula

+ General Purpose Grant Increased or decreased by each student in the following categories: Special education +1.0 English as a second language +0.5 Union High district +0.2 Elementary district -0.1 Approved remote small school varies by school size Poverty, foster home and state-recognized facility for neglected and delinquent +0.25 Except for the last category, the total weight for any one student cannot exceed 3.0 Increased or decreased by $25 for each year a district’s average teacher experience differs from the state average

+ Transportation Grant 70 percent of approved costs of transporting: For health, safety or special education Preschool handicapped Elementary - more than 1 mile Secondary - more than 1.5 miles Students between facilities Field trips Room and board in lieu of transportation School districts are required to provide transportation unless they can demonstrate a satisfactory alternative for high school students

+ Facility Grant Up to 8 percent of construction costs for new classrooms (permanent or modular)

- Local Revenues Includes almost all general revenue received by schools: Property taxes and offsets Common School Fund County School Fund Federal Forest Receipts Chapter 530 forest revenue Equalization ESD funds Supplantable federal funds received without specific application In lieu property taxes Excludes: Ending Fund balances Earnings on investments Prior year’s taxes Grant monies Non-supplantable federal funds Donations

= State School Fund Grant

The formula:

• Is a distribution formula based on a weighted per student allocation. (See chart above for formula.)
• Provides 70 percent of approved transportation costs and requires all districts to provide home-to-school transportation for elementary students who live more than one mile from school and secondary students more than 1.5 miles from school.
• Provides additional funds for small remote school districts and for the higher cost of experienced teachers.

[Return to top]

State School Fund: The Move to Equity

In an effort to assure equalization in the distribution of state funds to school districts and to avoid lawsuits over school funding equity that has plagued so many other states, the 1991 Legislature developed a State School Fund distribution formula and adopted a policy of phasing-in full equity funding. The distribution formula has been constrained each year to protect high-resource school districts from the revenue losses the full formula would cause. Full equity was achieved in 2000-2001.

[Return to top]

Local Property Taxes

Local property taxes are considered an equalized revenue source. They are included in the State School Fund calculation. The amount of money a district collects in property taxes does not add or subtract from total revenue a district receives from the State School Fund.

The tax limitation measures of the 1990s created fixed property tax rates for all local governments, including school districts, ESDs and community colleges.

The community colleges’ other major revenue sources come from legislative appropriations and tuition. Other sources of revenue for ESDs are payments from the local districts for programs provided as contracted services and restricted federal and state grants-in-aid.

[Return to top]

Federal Aid

Federal aid is distributed to local school districts, in most cases, by the state Department of Education for specific grant programs. Currently, the largest federal grant programs are for:

• Special education under provisions of the Individuals with Disabilities Education and Improvement Act (IDEIA) passed by Congress in November 2004.
• Title I (for economically disadvantaged students), Title II (for teacher training and educational technology), Title III (for immigrant students and those with limited English proficiency) and Title IV (for safe and drug free schools and communities) under the revised Elementary and Secondary Education Act (ESEA), better know as the No Child Left Behind Act of 2001.
• Vocational education through the Carl D. Perkins Vocational and Technical Act of 1998.
• School nutrition programs established under the Child Nutrition Act of 1966 and funded through the U.S. Department of Agriculture.

Some districts also receive funds directly from the federal government for other specific purposes.

Federal revenues are listed separately in the resources section of the budget and as separate accounts in the expenditures (or requirements) section of the budget. Federal aid accounts for about 10 percent of school revenues in Oregon.

[Return to top]

Other Sources

Other sources of school revenue include money from the Common School Fund, the County School Fund, Federal Forest Fee receipts, Oregon and California Railroad forest revenue, dollars received from Public Law 874 and from other categorical grants-in-aid for special programs. The amount of these resources varies from district to district. Recently, these revenue totals have been decreasing.

• The Common School Fund is money from the sale of state-owned timber or lease of state-owned property. Interest and earnings from the fund is distributed annually on a per pupil basis. (Revenue is included in State School Fund calculation.)
• The County School Fund is an allocation made to school districts from a variety of county sources. (Revenue is included in State School Fund calculation.)
• Federal Forest receipts are received by school districts through the County School Fund when federal timber, managed by the U.S. Forest Service within the county, is harvested. Twenty-five percent of this revenue must go to schools; 75 percent is for county roads. In 10 counties – Curry, Gilliam, Grant, Harney, Hood River, Lake, Morrow, Sherman, Wallowa and Wheeler – more than 25 percent may be allocated to schools at the discretion of the county commission. Federal Forest Fees to schools totaled $32.3 million in 2004-05 and account for one percent of total school district resources. (Revenue is included in State School Fund calculation.)
• Eastern and Western Oregon Timber Privilege taxes, levied on private timber in Oregon, provide money to school districts where the timber is located as a direct reduction of their property tax levy. These taxes are distributed to school districts as an offset to the actual amount of property tax in the district and do not appear as revenue in the budget. Based on actions by the 1999 Legislature, this revenue source will decline and be replaced by a property tax on timberlands. (Revenue is included in State School Fund calculation.)
• Oregon and California Railroad forest revenue is allocated to the county governments. County governments determine if schools receive any of this revenue. Currently, none of these funds are being given to schools.
• Public Law 874 provides federal dollars to districts enrolling children whose parents or guardians work or live on federal land which is exempt from local property taxes.
• Other: Some districts, mostly larger ones, also may receive funds from public or private agencies to carry out programs for special groups of students. All of the dollars school districts receive from those agencies for these programs appear under this budget item.

[Return to top]