The best news for school leaders in Oregon’s latest quarterly economic report was no news. The September Oregon Economic and Revenue Forecast declared the outlook “effectively unchanged from last quarter,” promising reliable state funding for the near future.
“We finally had some sense of stability,” State Economist Mark McMullen told the Interim House Revenue Committee on Wednesday.
Inflation is slowing, recession fears are receding and expected General Fund resources for 2023-25 increased $437 million, according to the report. McMullen cautioned, though, that considerable risk and uncertainty remain in the national economy as the Federal Reserve continues to try to engineer a soft landing from recent years’ growth surge.
McMullen also sounded a note of concern for schools. With deaths outnumbering births in Oregon, the K-12 population is predicted to decline 10% in the next decade. Many districts are already grappling with falling enrollment, which affects funding.
This forecast closes the books on the 2021-23 Oregon budget, a time of unprecedented growth. Oregon ends the biennium with record reserves of $3 billion. The kicker tax refund when Oregon exceeds its projected budget will be sending $5.6 billion back to taxpayers next filing season. The corporate kicker will put $1.8 billion toward public school funding. Both are also records.
The corporate activity tax forecast was relatively unchanged. The 2019 Student Success Act created the tax to generate roughly $1 billion per year for Oregon education. For 2021-23, the tax raised $2.5 billion, of which nearly $900 million went directly to school districts through the Student Investment Account. For 2023-25, the SIA is predicted to increase to $1.1 billion.
– Jake Arnold, OSBA
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