Legislature’s State School Fund proposal falls short of governor’s budget
The Legislature is starting the State School Fund debate at $8.87 billion, $100 million less than Gov. Kate Brown proposed in November.
“This number represents a significant step backwards,” said Jim Green, OSBA’s executive director. “At a time when we are on the verge of a historic reinvestment in Oregon’s public schools, we are starting the conversation with a number that is $100 million short of the governor’s proposed budget and doesn’t recognize voters’ wishes by fully funding Measure 98. It’s like building a house on a false foundation.”
The Joint Ways and Means Committee co-chairs released their budget framework Thursday afternoon. The $23.2 billion framework provides the basis for all 2019-21 state spending decisions.
Co-Chairs Sen. Betsy Johnson, Sen. Elizabeth Steiner Hayward and Rep. Dan Rayfield stressed during a news conference that they were constrained by the state’s current revenues and structural deficits dating back to the 1990s.
The co-chairs’ total 2019-21 General Fund/Lottery Fund budget falls $769 million short of the estimated current service level needs for all state programs.
The State School Fund was the only area that they were investing above what the state estimates as current service level, according to Rayfield, D-Corvallis.
In November, the Legislative Fiscal Office estimated that school districts needed an $8.77 billion State School Fund to maintain current service levels. The Oregon Association of School Business Officials says that estimate was built on flawed methodology, though, and Brown’s budget also assumes a higher starting number than the framework does.
The LFO calculated the next biennium using a 50-50 split of the fund in this biennium as a starting point. In reality, schools have to divide their allotment roughly 49-51 (first year 49, second year 51) to account for automatic yearly cost increases, raising the starting point for calculations by about $168 million.
OASBO, which also uses current collective bargaining agreements for its expense calculations, estimated that the State School Fund needs to be $9.13 billion to hold most districts harmless.
Brown’s budget based on current revenues would allocate $8.97 billion for the State School Fund as well as $100 million for Public Employees Retirement System side accounts to reduce districts’ rates and $170 million to partially fund the High School Success Fund (Measure 98). Brown proposed additional investments in early learning through higher education if the state increased its revenue.
Oregon’s leading education advocacy groups, including OSBA, are calling for the governor’s proposed budget as well as full Measure 98 funding of $303 million and an additional $1 billion School Improvement Fund to give districts resources to make local decisions to improve student achievement.
The Joint Committee on Student Success identified more than $3.5 billion in potential education investments to improve Oregon’s schools.
“The Joint Committee on Student Success has prepared the way for us to create an educational system that our young people need to succeed,” Green said. “We have to stay on that path. Our kids deserve it, and our school boards need a realistic starting number to begin budgeting for the next two years, instead of planning for layoff notices. I hope our legislative leaders reconsider, and quickly.”
Steiner Hayward, D-Beaverton, said the framework does not include any money for the Student Success Committee’s priorities.
“Anything they want to pay for, they have to find the revenue for,” she said.
Steiner Hayward said the co-chairs recognized that an $8.87 billion State School Fund would lead to cuts at many districts.
“We don’t like it, and yet we are constrained to the resources we have available,” she said.
The framework would maintain current service levels for the Community College Support Fund and renew the Measure 98 fund at 2017-19 levels. The 2017 Legislature funded Measure 98 at $170 million, slightly more than half the amount voters approved.
The budget also includes a 2 percent of General Fund ending balance to cushion against future revenue declines. The co-chairs said that money could also potentially be used to pay down the PERS unfunded liability.
Johnson said legislators would be working this session to find more money for Oregon’s needs.
“This is a starting point, not an ending point, for the Ways and Means process,” said Johnson, D-Scappoose.
The Joint Ways and Means Committee will be traveling the state to take public testimony on the state budget, with the first hearing Saturday in Coos Bay. The complete list of times and locations is on the website of Oregonians for Student Success, an OSBA advocacy campaign for stable and adequate school funding. The campaign’s event calendar also contains lobby days where education supporters can talk to legislators face to face.
- Jake Arnold, OSBA
jarnold@osba.org