Published: June 20, 2023

The Senate Republicans reached a deal with Democrats and went back to work Thursday, June 15.

Hundreds of bills that likely would have been left for dead in a special session now have a chance to be heard, making for a wild scramble before the session must close Sunday, June 25. Bills that could affect schools through special education rules, workforce requirements and the Student Success Act are suddenly back in play.

Legislators made a deal on bills related to abortion, transgender health care and gun rights to allow bills to be heard again. The negotiations don’t appear to directly affect education funding, which has broad bipartisan agreement.

House Bill 5015, setting the State School Fund for 2023-25 at $10.2 billion, is one of many important budget bills that are anticipated to be passed out of the Joint Committee on Ways and Means this week.

It isn’t as much as education advocates sought, but it’s notably higher than where the Legislature started.

“We have mixed feelings,” said OSBA Legislative Services Director Lori Sattenspiel. “Given the economic climate at the start of the session, schools will be receiving significant funding. But some districts will still fall short of what they need to serve all their students adequately.”

Legislative Highlights has closely followed the trials and tribulations of education funding through its weekly “Funding Oregon’s Future” series. Education advocates have lobbied hard this session to get school district funding to levels that meet current needs.

In December, legislative analysts said schools would need a mere $200 million increase to $9.5 billion for 2023-25 to meet the inflationary costs of maintaining current staffing and programs. Education advocates countered that it would take at least $10.3 billion for most school districts to avoid painful shortfalls.

The Oregon Association of School Business Officials surveyed districts serving nearly 80% of Oregon’s students about their current contracts and expenses. Some districts needed a school fund higher than $10.3 billion to stay even and some required less. Education advocates settled on $10.3 billion as getting most districts to even or at least close enough that they could shore their budgets up with reserves or federal emergency funds.

The Legislature’s proposed budget in March proclaimed tightening state economic conditions with a planned $9.9 billion for the State School Fund. After a strong economic and revenue report in May, the Legislature bumped it up to $10.2 billion.

Increases in local revenue, mostly property taxes, will also help schools. The State School Fund is roughly two-thirds of schools’ general funds. Local revenue, the remaining third, has increased more than $100 million since OASBO made its estimate.

More than $4 billion in additional education funding for specialized purposes flows through HB 5014, the Oregon Department of Education’s budget bill. HB 5014 passed the House earlier this month. Like HB 5015, it will likely be worked in Ways and Means this week.

HB 5014 contains allocations for the Student Success Act and the High School Success Fund, known as Measure 98, that will receive a modest investment from the 2021-23 biennium. HB 5014 offers $325 million for Measure 98 grants and $1.087 billion for the act’s Student Investment Account that goes directly to districts.

HB 3198, Gov. Tina Kotek’s early learning bill, had aimed to siphon off some of the SIA money, though. After objections from education advocates, the bill was amended last week to change its reliance on funding from the Student Success Act.

Rather than counting on the Student Investment Account portion of the SSA accounts, the bill will be funded from Statewide Education Initiative Account reserve funds. The SEIA will also receive an infusion of about $90 million, for a total investment of $557.3 million, which should help cover district costs related to the bill.

School districts have mostly finished their budget processes, with contingency plans for different possible funding levels. The Legislature wrapping up business before the start of the new fiscal year gives them certainty as they make plans this summer for the next school year.  

The Legislature isn’t completely done, though.

Sattenspiel says the Legislature always has what is known as “the Christmas tree bill” as one of its final actions. The Legislature moves a bill to square up all its budgets. It can sometimes add funding but it can also be used to slip in policies or shift around funding sources. In a session with so much work occurring in the final week, education advocates will be watching keenly, Sattenspiel said.

“There’s a lot of fuzzy math going on,” she said.

– Jake Arnold, OSBA
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