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Legislative budget framework cuts K-12 spending

The co-chairs of the Joint Ways and Means Committee outlined their education funding plans Jan. 19 by proposing to spend $200 million less on K-12 schools than that outlined in late November by Gov. Kate Brown.

Sen. Richard Devlin (D-Tualatin) and Rep. Nancy Nathanson (D-Eugene) presented a legislative budget framework that allocates $7.8 billion for K-12 education in the 2017-19 biennium. Though more than the $7.45 billion approved in the last biennium, it bodes significant cuts for schools because of inflation and drastically higher public pension costs.

Oregon school business officials estimate the State School Fund needs at least $8.4 billion to maintain current service levels – roughly $600 million more than proposed. That’s just to stand still, but Oregonians want to move forward with smaller classes sizes and more programs and electives, according to a 2016 survey by Oregon Rising.

Jim Green, OSBA’s executive director, said, “We should be spending significantly more than $8.4 billion so our students can keep pace with the rest of the country. Oregon students deserve better than this.”

Oregon’s per-student investment ranks 39th in the nation, and class sizes are the third largest in the country. To reach the educational goals Oregonians identified last year through the Oregon Rising campaign, the state would have to spend even more: roughly $8.9 billion.

Devlin repeatedly pointed out during the press conference Thursday at the Capitol that the working state budget of $20.3 billion is $1.8 billion short of being able to continue services at current levels. Expected revenue is 8 percent less than expected costs. The size of the gap demands cuts, the co-chairs said.

“That’s just simple mathematics,” Devlin said.

The co-chairs said Brown’s proposal, which offered $8.0 billion for K-12 education, was based on a budget that supposed about $800 million more in revenue the next biennium.

The budget has a shortfall even though the state is not in recession. Because of statutory requirements, the budget not only does not dip into the reserve fund to blunt that shortfall but also adds to the reserve fund for an inevitable recession.

The co-chairs pointed to the state’s heavy reliance on income taxes as contributing to the budget problems. Measures in the 1990s shifted the bulk of the cost for schools from local property levies to the state general fund.

Devlin and Nathanson both raised the question of whether current service levels are the standard that Oregonians expect of their state.

“This existing resources budget framework provides a glimpse at one path forward – one we believe Oregonians will reject. We hope it can be a starting point for a new series of choices to put us on a sustainable path into the future,” the pair said in a statement.

In the coming months, the Legislature will debate how Oregonians want to spend their tax money and whether there is a need for revenue reform.

Green said OSBA will actively address the revenue reform question this session as its chief legislative priority.

“We recognize that the co-chairs are facing a tough spot,” he said. “But the budget proposals we are seeing signal a terrible cycle of future cuts for our schools.

“What we heard today once again signals the need for revenue reform to pay for public services and cost containment in areas such as the Public Employees Retirement System. Our students need leadership on these two issues from the governor and our legislative leaders.”

For questions, contact Jake Arnold, OSBA communications and news specialist, at jarnold@osba.org.