House-backed state school funding stalled by Senate walkout

A $10.2 billion state fund to support Oregon’s public schools for the next two years is headed to a vote by the full Oregon House.

The Legislature’s joint budget committee cleared the measure (House Bill 5015) with a minimum of discussion on Wednesday. It is $900 million more than the $9.3 billion in the two-year budget period that ends June 30, and $300 million more than originally proposed by Gov. Tina Kotek and the Legislature’s chief budget writers. Democratic legislative leaders announced the higher amount May 22, after the state’s latest economic and revenue forecast projected more money available for spending.

The measure is likely to go to a House vote early next week. What happens afterward is uncertain, given the continued Republican walkout that has stymied business in the Senate. It is the largest single item in the budget that is not connected with a state agency, but will not advance unless the Senate reconvenes.

The 2023 session is scheduled to end by June 25.

Counting local property taxes that go through the state distribution formula — excluding local-option levies and bond issues approved by voters in individual districts — the total available for school operations is $15.7 billion.

More than 550,000 students attend school in Oregon’s 197 districts. The measure also funds education service districts that provide specialized services.

School advocates had pressed for a state fund of $10.3 billion, most of which comes from the tax-supported general fund and Oregon Lottery proceeds.

Excluded from the total is a projected $1.8 billion in excess corporate income tax collections, which under a measure that voters approved in 2012 go into the state school fund rather than be rebated to businesses. However, that amount — the exact figure will be determined in the next revenue forecast scheduled Aug. 30 — is excluded from the base calculation for the next state budget cycle.

School funding burden shifts

Since Oregon voters imposed limits on local property taxes in the 1990s, the burden of school operating costs has shifted onto the state budget, which now supplies $2 for every dollar from property taxes. This excludes federal grants, which are earmarked for specific programs or are based on the number of students from low-income families within districts.

Portland Public Schools, which at an average daily attendance of 53,000 is Oregon’s largest district, will get a combined $581.9 million in the 2023-24 school year and $589.6 million in the following year, according to figures compiled by the Legislative Revenue Office. The amounts, which are rounded, combine state aid and local property taxes.

Attendance is one of the factors in Oregon’s school financing formula.

All the negative votes against the budget were cast by House Republicans: Jami Cate of Lebanon, Rick Lewis of Silverton, E. Werner Reschke of Klamath Falls, Greg Smith of Heppner. Senate Republican Leader Tim Knopp of Bend, who's also on the budget committee, said he wanted a higher amount.

But in similar circumstances two years ago, majority Democrats prevailed on a $9.3 billion state school fund over the objections of minority Republicans in both chambers.

State Sen. Sara Gelser Blouin, a Democrat from Corvallis, voted with the majority on the budget committee. But she said the fund falls short of guaranteeing a full school day to thousands of children with disabilities, who some districts have excluded.

A 2019 class-action lawsuit that Disability Rights Oregon filed on behalf of four children against the Oregon Department of Education is pending in U.S. District Court in Portland. Similar lawsuits are pending in other states, based on the 1975 federal law known as the Individuals with Disabilities Education Act.

Gelser Blouin said the number of excluded students with disabilities — such as autism, cerebral palsy and Down syndrome — exceeds the total of suspended or expelled students during the 2021-22 school year.

She said: “What is disappointing to me that it looks like that despite $15 billion in spending on public schools in Oregon, it appears for the second year in a row that we are going to tell students with disabilities that they still are not worthy enough to go to school all day… We will probably need to be allocating additional resources for training, compensatory education, psychological services and damages that are likely to be awarded. I hope that I am wrong.”