Legislature OKs $9.3 billion for schools after partisan debate
A two-year, $9.3 billion budget for state aid to public schools is on its way to Gov. Kate Brown after a partisan fight in the Oregon House.
The House passed the budget Thursday, June 3, on a 36-20 vote, majority Democrats for and minority Republicans against, after Republicans failed to send it back to the Legislature's joint budget committee to add $300 million for the two years starting July 1.
The extra money, and more, is likely to materialize anyway in a couple of months. The state's latest economic and revenue forecast, presented May 19, projects $664 million in excess corporate income tax collections — which under a 2012 ballot measure go into the state school fund. The third-quarter forecast, scheduled for Sept. 22, will yield the actual number.
The Senate approved the budget, 23-6, on May 25.
The excess collections, known as the "kicker," were not mentioned during the House debate.
The $9.3 billion in state funds will be combined with a projected $4.6 billion in local property taxes for 197 school districts. The ratio is the reverse of what it was before Oregon voters approved a series of statewide property tax limits in the 1990s and shifted the burden of school operating costs from property taxpayers to state income taxes, which account for more than 90% of the state general fund. (The school fund also gets Oregon Lottery proceeds and marijuana sales taxes. Some money from Oregon's new corporate activity tax, which lawmakers passed in 2019 and started in 2020, also is included.)
Only the budgets of the Oregon Health Authority and the Department of Human Services, both of which get federal grants, are larger. The school aid budget does not reflect federal grants to individual districts.
GOP: More money needed
Brown originally proposed $9.1 billion in her 2021-23 budget, which she unveiled Dec. 1, a slight increase from $9 billion in the current two-year cycle that ends June 30. She proposed to tap $200 million from the state's education reserve, which lawmakers had already withdrawn $400 million from last year to balance the budget during the coronavirus pandemic.
But since then, the overall budget picture has improved because of increased projections of tax collections from two subsequent economic and revenue forecasts, some savings from budget cuts, and $2.6 billion in federal aid from President Joe Biden's pandemic recovery plan. (Half of that aid will be paid next year.)
Seven Republican representatives, including Minority Leader Christine Drazan of Canby, said the aid budget should reflect the $9.6 billion advocated by the Oregon School Boards Association.
"As we ask our schools to bring kids back to have full in-person learning five days a week, they are going to be bombarded with unknowns," Drazan said. "The need for them to have the resources necessary to create an environment where these kids can be successful cannot be overstated."
Rep. Greg Smith, a Republican from Heppner who sits on the budget committee, said boosting the amount would be a true bipartisan gesture in an often-fractured House.
"Your vote today is not a vote against leadership," he said. "But we have just come out of a pandemic. The notice of having a good budget isn't good enough this time. Our kids need that boost."
The May 14 vote of the full budget committee was 21-1. Sen. Chuck Thomsen, R-Hood River, was the lone dissenter, and also opposed it May 25 when it came up in the full Senate. One Republican was excused from the committee vote.
The motion to send the budget back to committee failed with two Democrats — Mark Meek of Oregon City and Marty Wilde of Eugene — joining 20 Republicans.
Earlier in the day, Republicans attempted but failed on a procedural motion to put to a vote a separate bill committing Oregon's 197 school districts to reopen fully for the 2021-22 academic year that starts in a few months.
Democrats defend amount
Rep. Susan McLain, D-Forest Grove, said overall education spending in the new budget cycle is projected at 51% of the tax-supported general fund and lottery proceeds, and the state school fund accounts for 32.4%.
"We are creating record investments in public schools this year," McLain, co-leader of the education budget subcommittee, said.
Rep. Dan Rayfield, a Democrat from Corvallis and co-leader of the Legislature's joint budget panel, said about $6 billion of a projected $28 billion in general fund and lottery spending for the next two years is one-time money.
He said he and McLain worked for four months to come up with the right figure for school aid.
"It is our job as a legislature to find out what is the Goldilocks porridge in our budget that meets the needs of our children, but also at the same time, is a sustainable budget that we can continue to operate on," Rayfield said.
Rep. Andrea Valderrama, D-Portland, leads the David Douglas School Board and is the newest member of the Legislature, having taken her District 47 seat on April 1 after her predecessor resigned under pressure.
"As a school board chair, I will be doing everything that I can to hold our district accountable to equitable spending and meaningful engagement of communities of color," Valderrama, one of nine House members of color and 31 women, said.
Rep. Paul Evans, D-Monmouth, voted for the bill. But he said lawmakers should be working toward paying for public schools at the level recommended by the Quality Education Model, which takes into account the staffing and services that students should get. The process was initiated more than two decades ago by then-Gov. John Kitzhaber, who also won voter approval of a 2000 constitutional amendment that requires lawmakers to specify why Oregon does not meet that goal. (Lawmakers never have met it.)
Evans said if the state budget were to pay fully for that model, lawmakers should be approving $10 billion for the next two years.
"We will continue to fight every year over nickels and dimes to get the state school fund a little better," Evans said. "But it is the wrong fight. The fight is for the Quality Education Model."
EDITOR'S NOTE: Adds May 14 vote by the Legislature's joint budget committee; only one Republican voted against the budget. Adds quote by Rep. Greg Smith.
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