The advocates working the Capitol halls keep a sharp eye out this time of year for any signs the session might end soon. A sure indication is the closing of Ways and Means subcommittees, which is expected to start as soon as next week.
Often as the session nears its end, the majority of subcommittees conclude their work, and all remaining bills move through the Ways and Means Capitol Construction Subcommittee. Once the other committees are closed, it’s a good indicator that only necessary or priority budget items remain. If you have a policy bill that requires funding sitting in one of those committees, your last hope is to have the funding included in the end of session final budget bill, often called the Christmas tree bill.
We don’t know for certain when the Ways and Means Education Subcommittee will close, but it still must move the Oregon Department of Education budget, which includes all grant-in-aid and the K-12 portions of the Student Success Act funding. That hearing was originally scheduled to happen Monday, but it’s now been pushed to Tuesday.
We are watching this budget closely. Based on the latest Oregon Economic and Revenue Forecast, corporate activity tax revenue is down, creating a $192 million shortfall from the Governor’s Recommended Budget. That budget already included $65 million worth of reductions to the Statewide Education Initiatives Account. The Legislature has $200 million in the Fund for Student Success reserves, but they won’t spend all that at once.
Without using up all the reserves, there is simply no way to avoid cuts to the Student Success Act programming. The Department of Early Learning and Care budget includes a $35.4 million reduction across programs funded through the Early Learning Account, which is part of the Fund for Student Success. That still leaves roughly $157 million in remaining funding gaps (192 – 35.4 = 156.6). That will have to be made up through some combination of spending reserves and making additional cuts to the Statewide Education Initiatives Account (which includes things like High School Success, early literacy, School Meals for All, and the various Student Success Act plans) and the Student Investment Account (which is the formula grants to districts).
We know that many districts have approved their 2025-26 budgets, and any unanticipated cuts from the state level will further impact those local budgets. We continue to share with legislators that any reductions to programs that directly impact students will have real and immediate consequences in districts, and we encourage readers to share the same.
Just for some additional budget context, I want to wrap up by sharing a bit of what we know at this point in the budgeting process.
- The State School Fund was fully funded at the current service level of $11.36 billion, an 11.4% increase over the 2023-25 budget.
- The Higher Education Coordinating Commission budget was set at $3.9 billion, 2.1% more than CSL and 3% more than the 2023-25 budget.
- Unfortunately, the budget included a $12 million reduction to Outdoor School funding (which comes through the OSU Extension Office), which was part of the Governor’s Recommended Budget.
- The Department of Early Learning and Care saw an overall budget reduction of 0.5% from the 2023-25 budget and a 3% reduction based on its CSL.
- The General Fund investment was increased by 24.8% from 2023-25 to mitigate cuts due to reductions in other fund categories, for a total of $741 million from the General Fund.
- The $35.4 million reduction due to decreasing CAT revenue includes an $8.7 million cut to Preschool Promise.
- The Teacher Standards and Practices Commission’s budget came in 9.6% over its CSL, although the total budget is lower than 2023-25 because of the phasing out of one-time investments in technology upgrades and some staffing shifts.
- $2 million has been cut from the Administrator Scholar Program because of loss of CAT revenue.
– Adrienne Anderson
OSBA Government Relations Counsel
