Governor’s budget protects status quo while aspiring for additional $1.3 billion for education

Gov. Kate Brown offered two budget approaches Wednesday: an education status-quo budget based on current revenue and an investment budget that adds nearly $1.3 billion for early learning and K-12 education with as-yet-unnamed revenue.

 

“We must accept this challenge now, while the economy is good,” Brown said during a news conference Wednesday.

 

The governor’s 2019-21 budget is the launching point for education spending negotiations, and the key figure Wednesday was $8.97 billion for the State School Fund, an increase of $770 million from 2017-19.

 

The Oregon Association of School Business Officials estimates school districts will need $9.13 billion to stay even. OASBO’s calculations are based on spending in the 2017-19 biennium and current collective bargaining agreements.

 

The Legislative Fiscal Office estimated current service level for 2019-21 would be $8.77 billion, including Public Employees Retirement System cost increases. The governor’s budget, however, acknowledged the LFO estimate was built on a flawed starting point.

 

The 2017 Legislature split the State School Fund 50/50 between the biennium’s fiscal years, instead of the usual 49/51 split that recognizes that costs go up automatically every year. The LFO based its numbers on a 50 percent share in the second year.

 

But districts had to hold some money back from the first year and put it into the second year, in essence creating their own 49/51 split. The governor’s budget says it added $164 million to account for the higher spending in the second year.

 

The governor’s balanced budget also includes $100 million for PERS side accounts that are designed to reduce districts’ payroll rates. The budget suggests $100 million each for the popular Seismic Rehabilitation Grants program and the Oregon School Capital Improvement Matching program.

 

The revenue forecast released Monday for 2019-21 projected Oregon would be $623 million short of current service level spending needs, mostly because of rising Oregon Health Plan costs. The governor’s $23.6 billion balanced budget relies on flat funding for higher education and cutting funding to community colleges.

 

Education advocates expressed appreciation for avoiding cuts at the K-12 level but said more education spending is needed. The Quality Education Model, a nonpartisan assessment of the costs of a high-quality Oregon education system, recommends Oregon spend $10.7 billion for 2019-21. Oregon has one of the country’s lowest graduation rates, shortest school years and highest chronic absenteeism rates.

 

“Simply holding the line will not give our students what they need to be successful,” John Larson, Oregon Education Association president, said in a statement.

 

The governor, the Legislature and education advocates have higher hopes for the 2019 session than just another status-quo education budget. The legislative Joint Interim Committee on Student Success has been exploring how to increase Oregon’s education investment, and OSBA is pushing for revenue reform and cost containment in the next session.

 

“Clearly Governor Brown wants to make a substantial investment in education,” said OSBA Executive Director Jim Green.

 

Brown said Wednesday that Oregon has failed to deliver on a promise of a world-class education for Oregon children and an opportunity to achieve their dreams.

 

Brown’s investment budget adds $359 million for early care and education programs for low-income children, $794 million for reducing class sizes in kindergarten through third grade and ensuring all districts provide a 180-school year, and $133 million to fully fund Measure 98.

 

The governor’s balanced budget designates $170 million for the High School Graduation and College and Career Readiness Fund, known as Measure 98. Her investment budget would add money for the voter-approved measure that provides grants for career and technical education, college readiness and dropout prevention programs.

 

“We support the governor’s efforts to increase revenues, but it’s important for lawmakers to recognize that Measure 98 is urgently needed, regardless of new revenues,” Toya Fick, Stand for Children Oregon executive director, said in a statement.

 

Brown’s budget also notes that the Chief Education Office sunsets statutorily in 2019, and Brown’s budget proposes letting it fade away. The agency’s coordination functions would be picked up by the governor’s office and the Oregon Department of Education.

 

As is typical of governor’s budgets, Brown’s budget does not include revenue proposals. Brown is looking toward the Joint Interim Committee on Student Success, which will file a report in December, and the Oregon Business Plan, an economic development forum, to push the revenue conversation forward.

 

The Oregon Constitution requires a three-fifths vote, a supermajority, in each legislative chamber to raise taxes. Even with Democratic supermajorities in both chambers, tax increases would be a tough vote, according to Sen. Mark Hass, chair of the Senate Interim Committee on Finance and Revenue.

 

Votes to raise taxes tend to be unpopular, and Oregon’s initiative process allows voters to challenge new laws through ballot measures. Polling by OSBA in 2017, however, showed voter willingness to increase taxes to pay for education.

 

- Jake Arnold, OSBA
jarnold@OSBA.org