Federal pandemic supports have pushed personal incomes about 20 percent higher on average than a year ago, fueling an economic boom. That’s created a projected personal tax kicker of about $1.4 billion and corporate tax kicker of $664 million for K-12 schools.
School funding advocates have been holding their breath for weeks, in hopes that the economic report would break a logjam around the State School Fund. Legislators have proposed $9.3 billion, while school business officials and others, including OSBA, say $9.6 billion is needed just to keep pace with inflation.
“Oregon’s strong economic outlook highlights the need to adequately invest in our schools,” said Jim Green, OSBA’s executive director. “Our students are our most precious resource, and a $9.6 billion State School Fund is the investment our schools need to avoid painful cuts to staff or teaching time.”
The next few days will see how legislative leaders plan to divvy up the expected state income among competing interests.
The newest projections call for about $1 billion more in new revenue every biennium through 2025.
“That’s quite a remarkable turnaround from a few months ago,” said Mark McMullen, Oregon’s state economist. “I’ve never really seen such a strong outlook.”
The report’s executive summary says that “Personal and corporate tax collections are booming despite the job losses and business woes brought on by the COVID pandemic.”
On both sides of the political spectrum, legislators issued statements Wednesday. Some specifically called for higher school spending, while others were more general.
Senate President Peter Courtney (D-Salem) issued this statement: “This is unbelievable. In all my years at the Oregon Legislature, I have never seen a forecast like this. Oregon's economy is clearly one of the most stable in the country. We have what we need to deal with the damage caused by the great fire and the pandemic. If we join our hands and arms, we can really do something about the about the pain and suffering of Oregonians right now. If we don't, we have no one to blame but ourselves.”
House Republican Leader Christine Drazan (R-Canby) issued a statement with a direct appeal for higher school funding, while still keeping some funds in reserve.
“Oregon has the opportunity for one-time spending on wildfire relief and pandemic aid,” she said. “We should also fully fund schools next year when they need help most. Our kids’ education recovery is critical, and we must give families the choice to return to classrooms full-time. Our state cannot afford to underfund students.”