Oregon’s revenue system fails school funding, Quality Education Commission report says
Wednesday, August 1, 2018
Oregon’s revenue system fails to provide the funding schools need, according to a new report from the Quality Education Commission.
The 2018 Quality Education Model, released Wednesday, estimates that Oregon would need to spend $10.7 billion for 2019-21 for a K-12 system that meets Oregon’s education goals, $2.5 billion more than the 2017-19 State School Fund. The report says slow-growing property taxes and shrinking corporate income taxes have made Oregon into a relatively low-tax state, making it difficult to fund schools adequately.
The biennial Quality Education Model is the gold standard of Oregon public education goals, but the Legislature has never met its funding targets. As the Joint Interim Committee on Student Success has toured Oregon to ask how to reform Oregon education and its funding, education advocates have repeatedly pointed to the model. One of the committee’s work groups has set a policy goal of implementing the model.
Committee Co-Chair Rep. Barbara Smith Warner (D-Portland) said the model is useful for showing legislators who are not keyed into education issues a logical approach to improving Oregon education. She said the committee would be meeting with the Quality Education Commission to discuss how to use the model as a framework for the committee’s efforts to make large, systemic changes in Oregon education.
“We’re not doing all this work to do small ball,” she said.
OSBA will rely heavily on the model’s data and research as it prepares its agenda for the 2019 legislative session, according to Executive Director Jim Green. OSBA will be pressing for revenue reform to support greater school investment.
“Basically, we need to fund at the QEM level,” Green said. “It is time to correct this generational disservice.”
The nine-member nonpartisan Quality Education Commission identifies the requirements and cost for a high-quality K-12 public education to create the state’s Quality Education Model. Its estimate considers Oregon’s education goals, such as higher graduation rates and workforce diversification, and school needs, such as professional development and adequate staffing.
The commission weighs best practices based on research, data, professional judgment and public values to create a prototype high-performing elementary, middle and high school. It then calculates the cost to meet goals for class size, specialists, supports, technology and more.
Beth Gerot, a commission member and former Eugene School Board member, said the continued short funding for schools prompted the commission to look closer at how the Legislature calculates the State School Fund.
The Legislature’s practice of basing school funding off the current service level tends to diminish education investment over time. If the Legislature in lean times funds less than the current service level, subsequent budgets are built from a smaller number. Nearly all of the model’s $1.8 billion shortfall for 2017-19 would be erased if Oregon had merely maintained service levels from 1999-2001, the report showed.
The Legislative Fiscal Office and the Department of Administrative Services have calculated that to maintain the current service level for 2019-21 would cost $8.77 billion, up from $8.2 billion currently. But that would barely cover the expected $530 million increase in districts’ Public Employees Retirement System payments.
The Oregon Association of School Business Officials calculates schools will need $9.27 billion for current service levels in 2019-21, still far below the model’s recommendations.
The current service level does not account for what schools actually need to do, Gerot said.
“Raise more revenue,” the report recommends.
Oregon relies heavily on volatile personal income taxes. Corporations’ average share of state income tax revenue has fallen to less than half what it was in the 1970s, according to the commission. Measures passed in the 1990s have held down property taxes, limiting local money in schools and increasing the state’s portion of support.
“The Legislature needs to figure out how to get us back to where we should be,” Gerot said.