Hoping to head off the biannual brawl over how much money Oregon’s public schools will receive, Gov. Tina Kotek is proposing a trio of largely technical changes to the state’s education funding formula.
Her office estimates that the formula revisions will generate an additional $515 million or so for schools in the 2025-2027 biennium. That would represent an increase of perhaps 4% to 5% over what the current formula would deliver.
For years, school districts have forcefully contended that the state’s budget experts significantly underestimate how much they’ll need to continue offering their current level of programs and services, giving increased employee pay and benefits and other rising costs. The issue has taken on even more potency post-pandemic amid declining enrollment, heightened student needs and with the sunset of federal COVID relief.
“I am, frankly, a little tired of just always fighting over the state school fund number,” Kotek told The Oregonian/OregonLive during an interview on Monday. “I would like it to be more accurate, to have some agreement about it, figure out how to fund it and then focus on what that money is giving us. What are we doing at the local level to make sure that those resources produce the outcomes [that are in] the best interests of the children and their families?”
Tensions came to a head in 2023, when the state initially projected it should provide school districts enough funds to give employees cost of living raises of 2.5% per year, far below the rate of inflation. In Portland, teachers sought a 23% raise over three years; that mismatch helped fuel the first-ever teachers strike in the city’s history, which closed down schools in the state’s largest district for virtually all of November, sidelining 44,000 students.
In the end, the union accepted a compromise that included a 14.4% compounded raise over the three year life of the contract. District officials said that in order to afford raises of that magnitude, they’d have to make tens of millions of dollars in budget cuts including reduced staffing ratios that will be felt in virtually all of the district’s schools.
Districts from Newberg to Medford to Salem-Keizer have also made deep budget cuts for the coming school year, while others, including Beaverton, are in the middle of labor negotiations with teachers in which the two sides remain far apart.
It all adds pressure to what is inevitably one of the central tensions of Oregon legislative sessions: When the gavel falls, how much will have been set aside for public schools?
In the most recent session, that figure was $10.2 billion for the 2023-2025 biennium, after first the governor and then lawmakers added funds to the initial proposal set by budget writers. Exactly how much state budget analysts will propose spending for the 2025-2027 biennium in order to maintain current offerings is not yet clear, but over the last three cycles, the figure has topped out at 6.9% more than the most recent budget.
That suggests that the baseline number could be between about $10.4 and $10.9 billion. A more precise calculation is expected in August.
Now, Kotek has proposed three distinct formula changes that could nudge that figure to as much as $11.4 billion, using the first significant changes proposed to the formula in three decades.
Those changes include:
- Calculating the amount budget writers believe will be needed to maintain current services based on school districts receiving slightly more money in the second year of any given biennium — a 49/51 split. That should benefit school districts to the tune of around $217 million, Kotek told The Oregonian/OregonLive on Monday.
- Narrowing a budget model that currently incorporates 20 years of historical data to come up with projected percentages for compensation increases for school employees. This coming biennium, she’s directing budget writers to consider only the past 10 years, eliminating the dips from the 2008-2009 recession from consideration and giving more weight to recent negotiations like those in Portland. Kotek said that could add up to $240 million to the bottom line for schools.
- Using more up-to-date information to estimate how much local tax revenue will be available to districts, so that the state can more effectively estimate how much each local jurisdiction needs to receive in state dollars for every student to draw at least the same base amount. That change will kick in an additional $55 million or so, Kotek said.
To arrive at the recommendations, which will be formally presented at a legislative task force hearing on Wednesday, Kotek said her team spent months meeting with education advocates of all stripes.
State Sen. Michael Dembrow, who chairs the Senate Education Committee but plans to step down from his post in September ahead of his January retirement from the Legislature, said he welcomed the recommendations, predicting that they’d save time and allow for more focus on policy priorities during the legislative session. But he also reminded fellow task force members Wednesday that the state’s budget resources are finite and that putting more into education inevitably means less money elsewhere.
“Half a billion is not chopped liver,” Dembrow said. ‘It will be hard to find that.”
Morgan Allen, the deputy executive director of policy and advocacy for the Coalition of Oregon School Administrators, said he was grateful for the proposal. He called the recommendations “a significant step forward in the state budgeting process. These are meaningful updates.”
— Julia Silverman covers education policy and K-12 schools for The Oregonian/OregonLive. She can be reached via email at jsilverman@oregonian.com. Follow her on x.com at @jrlsilverman.
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