School funding is complicated, even for legislators. A hearing last week was a good example of why school board members need to be talking to their legislators, if only to help them understand schools’ challenges.
The Senate Finance and Revenue Committee must hear any bills that affect the school funding formula. On Tuesday, May 2, committee members received the “Funding Formula 101” course to prepare for votes.
Dae Baek, a senior economist for the Legislative Revenue Office, walked the legislators through some of the intricacies of the State School Fund formula. The legislators had plenty of questions.
Legislators who don’t regularly grapple with education issues, much less sit on a school board budget committee, sometimes are not fully aware of how the State School Fund translates into teachers, books and buses. Legislative Highlights is presenting a weekly article on the State School Fund process, “Funding Oregon’s Future,” that can help board members answer legislators’ questions.
Baek explained how total Oregon school funding is a combination of about two-thirds State School Fund and one-third local revenue, mostly from property taxes. Because Oregon has attempted to equalize school funding, the more property tax funding a district receives, the less money it receives from the state. Districts can pass additional local option taxes for school operations, but there are caps.
Distribution of state money is based on a formula that considers enrollment, known as average daily membership, as well as teacher experience. Enrollment numbers are weighted, known as ADMw, based on student demographics that increase education costs. Schools receive extra money for defined categories of students, such as English language learners and students in poverty. In a practice referred to as extended ADMw, the formula uses the larger of this year’s ADMw or the prior year’s ADMw to help smooth out funding for districts experiencing enrollment drops.
The formula is difficult to alter because any money given for one group of students ultimately impacts other groups, but the revenue committee saw two proposed minor changes Wednesday, May 3. Senate Bill 278 affects the calculation for a public charter school if its sponsoring district had a drop in ADMw the previous year. Senate Bill 1002 would repurpose the State School Fund’s $3 million facility grant for the Oregon Department of Education to use for school safety planning. ODE says the grant is no longer needed because changes in the law allow schools to use bonds to buy what the grant used to cover.
The State School Fund is also subject to mandatory spending in designated areas, known as “carve-outs.” Education advocates usually oppose carve-outs because they remove local decision-making on spending and decrease the money for general needs.
Baek noted that the formula has nothing to do with reimbursing schools for existing costs or offering stability or adequacy. It is simply a means of redistributing the money the Legislature allocates.
For the next couple of weeks, education advocates will be working hard to coax as much money into the formula as possible and to avoid new unfunded mandates. The Legislature, which must finish by June 25, is gearing up for its stretch run. Most of the spending bills — and the State School Fund is the biggest single spending bill — are waiting on the session’s final economic and revenue forecast on May 17.
Legislative leaders have proposed a belt-tightening budget, with $9.9 billion allocated for K-12 public schools. Education advocates say school districts need at least $10.3 billion or most districts will face budget shortfalls.
School leaders are hoping the revenue forecast goes up, giving the Legislature more money to spend. They will also be hoping for more local money, which can increase all districts’ funding share.
– Jake Arnold, OSBA
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The previous story: Budget committees build hopes for $10.3 billion State School Fund
