Oregon’s latest positive economic forecast offers a clear formula for education advocates: A share of additional state resources + the additional corporate kicker money = at least $10.3 billion.
“Students and schools need so many things, and we just need to start by getting the State School Fund to at least $10.3 billion,” said Lori Sattenspiel, OSBA Legislative Services director.
School business officials have calculated that Oregon needs a $10.3 billion State School Fund for most districts to avoid budget shortfalls.
For education advocates who have been anxiously awaiting the latest Oregon Economic and Revenue Forecast, the May 17 report offered exceptionally good news. The report showed another surging quarter of growth and predicted continued expansion and more state revenue for years to come.
With the final forecast of the session in hand, the Joint Ways and Means Committee can get down to deciding just where to spend that money. Legislative Highlights is presenting a weekly article on the State School Fund process, “Funding Oregon’s Future,” so school board members can be more informed advocates.
House Bill 5015 calls for a $9.9 billion State School Fund, but legislators have said they want to add to it if they can. The latest report clearly says more money is available.
“The bottom line is that we are having significantly more resources, both today and in future biennia,” state economist Mark McMullen told legislators.
This biennium’s boom means a big ending balance to carry over into 2023-25. Since legislative leaders wrote their budget framework, the net general fund and lottery revenue available for 2023-25 has increased $2.3 billion, according to the Legislative Revenue Office summary.
The framework posed a tight budget though, with agency cutbacks. Other bills and interests will be competing for that extra money now.
Within minutes of the forecast’s release, Gov. Tina Kotek put out a news release renewing her push for hundreds of millions to be spent on homelessness, health care and early literacy. She also called for nearly $300 million in new spending on water quality and infrastructure, wildfire protection, and public safety.
The extra money this biennium also translates into record kicker tax refunds projected for next year: $5.5 billion for the personal kicker and $1.8 billion for the corporate kicker.
The corporate kicker, which by law must go to public education, increased nearly $300 million from when legislators wrote the $9.9 billion State School Fund bill. Education advocates would like to see that full additional amount added to the State School Fund without any corresponding general fund money taken out.
The latest forecast calls for a slowing of economic growth next biennium but downplays recessionary fears. At the same time, the Oregon Rainy Day Fund and the Education Stability Fund are nearing their statutory caps. The forecast estimates the funds will have a record $2.1 billion at the end of this biennium. Kotek’s budget recommendation of diverting reserve fund payments to other needs is looking more fiscally safe.
OSBA is encouraging school board members to contact their legislators to simply push for $10.3 billion and not worry about the mechanism. Sattenspiel said the forecast obviously shows more money is available and K-12 public education should receive some of it.
“We don’t care where it comes from, just get us adequate funding for all our students’ needs,” she said.
Oregon education funding prospects are looking up in other ways.
Total statewide school funding is roughly two-thirds State School Fund and about one-third local funding, with most of that being property taxes. The more local support a district receives, the less state money it gets so that funding per student is roughly equal across the state. Local revenue appears to be growing as well, increasing the total funding for schools.
The latest forecast also showed a $176 million increase for 2023-25 in the corporate activity tax that supports the Student Success Act. The act is expected to generate $2.8 billion for education, although some of that gets diverted to the general fund.
The ongoing Senate Republican walkout, though, could upend the entire process. As long as the Republicans deny the Senate quorum, no more bills can pass through that chamber. If Senate President Rob Wagner, D-Lake Oswego, declares the session over without the Senate resuming, all the bills awaiting action would be dead. That would include bills potentially placing new and expensive mandates on schools as well as bills offering support for things such as early literacy or workforce development.
If the session ends without a balanced budget, Kotek would have to call a special session that would likely consider only budget bills.
– Jake Arnold, OSBA
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The previous story: $9.9 billion State School Fund bill sent to decision-makers
