Governor proposes $9.9 billion for State School Fund
Tuesday, January 31, 2023
Gov. Tina Kotek has recommended $9.9 billion for the 2023 State School Fund. It’s more than a tentative budget proposed in December but $400 million less than education leaders say they need to avoid cuts at most schools.
Kotek called $9.9 billion a “strong base number” during a Tuesday news conference but said she expects robust conversations in the Legislature to get the number higher.
“It’s definitely a starting point for the session,” she said.
Every biennium, the governor presents a recommended budget that demonstrates policy goals, but the Legislature makes the final decisions on spending.
Kotek released her budgetTuesday. It focuses on three priority areas: housing and homelessness, mental health and addiction care, and education and child care.
Increasing the State School Fund from the $9.5 billion suggested by state analysts and fully funding the High School Success Fund (Measure 98) are the big ticket items in Kotek’s education plans. She also wants more than $300 million for targeted early learning and child care investments.
Education advocates watch the governor’s budget closely because it is usually an indicator of where the Legislature is headed.
OSBA Executive Director Jim Green said Kotek’s budget shows a strong commitment to education but schools need more money just to keep the staff and programs they have now.
“Education is too important to shortchange our students even one more year,” he said. “OSBA will continue to advocate for a higher number to meet the needs of our students.”
Schools have seen huge cost increases with the inflation that has gripped the nation, as they buy food for students, fuel for bus fleets and supplies for classrooms. Additionally, workforce shortages have driven up salary costs for everyone from bus drivers to classroom assistants to teachers.
The State School Fund needs to be at least $10.3 billion, according to the Oregon Association of School Business Officials, for most school districts to maintain into the next biennium their current programs and staff levels, known as “current service level.”
OASBO surveyed school districts serving nearly 80% of Oregon’s students about their current contracts and cost increases to develop its estimate. Education advocates including OSBA, the Coalition for Oregon School Administrators, the Oregon Education Association and the Oregon School Employees Association support OASBO’s conclusions.
Schools have propped up budgets and programs this biennium with federal pandemic emergency money, but that is running down while the education challenges remain. Testing results in the fall showed many students are behind in core classes, while teachers are also reporting increased numbers of students struggling socially and emotionally.
State analysts told legislators in December that schools needed only $9.5 billion, a 2.3% increase from this biennium, to continue their services. The report was based on past contracts and state-mandated formulas that education advocates say don’t take into account the inflationary realities of school costs going forward.
Legislators will have to make some hard funding choices as the state aims to deal with other issues, especially the homelessness and housing crisis and a predicted mild recession.
Legislative budget writers are expecting to be working with roughly $3 billion less in revenue than last biennium. The December report from the Department of Administrative Services and the Legislative Fiscal Office estimated the state would be about $560 million short of expected expenditures and current service level for all state agencies.
Kotek proposed to pay for her balanced budget without new taxes, but she would redirect $765 million in reserve fund payments to targeted investments. Oregon has roughly $2 billion in reserves, a record amount.
The Legislature will receive an economic report and forecast on Feb. 22, which will help clarify the budget talks. Sometime in the coming weeks, the Joint Ways and Means Committee will present a framework for state spending for 2023-25 and then the real haggling starts.
