Several Oregon school district leaders have come together to make a call to the community about the dire state of school funding and issues with the current school funding formula.
“If we don’t make up ground by the 2025-27 biennium, this funding gap will only get worse,” Steve Cook, Superintendent of Bend-La Pine Schools said.
The video began with each district leader laying out upcoming budget cuts their district will encounter this year and next.
“We are preparing for painful cuts in our district,” Cook said.
Three percent for the upcoming year and another 7% decrease the year after that. That’s a loss of almost 200 positions.”
Cook went on describing how the 10% staff reductions will increase class sizes by an average of four students per class.
“Next year for our budget we are cutting $7.5 million which is 32.5 positions or 2.5% of our workforce,” Brett Champion, Superintendent of the Medford School District said.
Champions continued noting how these reductions will create less staff positions in high need elementary schools as well as one of the district high schools.
Salem-Keizer Public Schools (SKPS) will cut $70 million for the budget this year or around 400 full-time positions.
District leaders continued stating how these cuts are coming on top of already difficult times for schools post-pandemic when many schools are still facing issues such as student achievement gaps, lowered rates of school attendance in some districts as well as issues surrounding student mental health.
Superintendent Andrea Castañeda noted how this is not a time to levy blame but rather ask for help. She continued saying how Oregon schools “urgently need support and attention,” in particular to the state’s school funding formula.
“Let’s work together to reconsider our investment in public education and give the school district a chance to preserve and strengthen how we are serving kids all over the state,” Cook said.
Oregon’s school finance system combines state, local, and federal revenue to support 197 school districts and 19 education service districts (ESD), according to a 2023 report from the Legislative Policy and Research office.
Funding is provided to schools in a few ways: the school funding formula that allocates money appropriated to the fund such as the General Fund, primarily income taxes; lottery receipts and the Fund for Student Success, with revenue from the Corporate Activities Tax “and local revenues (e.g., property taxes) through a statutory equalization formula.”
The second consequential source of funding is the different grant-in-aid programs such as nutrition, special education, and professional development via state and federal resources.
Every two years, the Oregon legislature sets the amount of state dollars schools receive. For the 2023-25 biennium, $10.2 billion was allocated for Oregon schools, or about 66.5% of the total amount of money given.
The other 33.5% comes from local revenue sources for schools or permanent property taxes.
This funding formula is the result of two property tax measures, Measures 5 (1990) and 50 (1997).
These two ballot measures capped local property taxes and placed the responsibility on the state to replace the lost revenue.
Before 1990, Oregon taxation was the product of almost all levies, with each district asserting what it needed to draw from citizens.
Measure 5 worked to reduce the amount individual properties could be taxed to $5 per every $1,000 for school taxes and $10 per $1,000 real market value for general government taxes or operating taxes.
Several years later, the Oregon legislature adopted Measure 50, a revision of Measure 47, making the tax rollbacks more concrete as well as providing language on how properties in Oregon are assessed.
Keizer provides an example of these measures in action and the resulting financial pool.
For example, a three bedroom, two bathroom house in Keizer originally valued at $490,000. With a .50% change property ration added this will bring the new assessed value to $249,263.
With assessed value rates equaling $2.08 out of every $1,000 in assessed value, one of the lowest rates in the state, means this property would only net a little more than $500 a year.
In Oregon, new housing is not added to property tax rolls at its construction or real market value but instead reduced to an assessed value via the change property ratio, a method of determining how a property should be monetarily assessed based on the combined assessed rates of surrounding properties.
Combined these funding schemes create a situation where schools are not supported enough by local areas and come to rely predominantly on state and federal funding as was the case in recent years from pandemic funding provided by the federal government.
This issue was highlighted in the SKPS district report as the third issue with funding that the district acknowledged: the difference between what schools require vs what citizens think they require.
According to the report, this issue was most recently exemplified through errors the state made with recent forecasted labor costs. Where the state previously forecasted an increase of 5.45% in the 2023-25 biennium, the actual increase for labor was actually around 14%.
In addition to the importance of how funding is acquired is how it is distributed amongst Oregon schools.
The Oregon Department of Education (ODE) allocates money to each school district using the school funding equalization formula, which adjusts state aid based on local funding.
Three methods are used to adjust for cost differences in school districts including: teacher experience, transportation grants as well as a weighted student count.
Teacher experience deals with more experienced teaching staff requiring higher salaries, transportation grants which help reimburse districts for student transportation costs and range from 70-90% grants determined by the cost per student transportation amount with districts with higher costs receiving larger grants (90%).
Finally, the weighted student count accounts for the total number of students but recognizes that some students require more resources to aid, such as students in poverty, pregnant students as well as special education or English language learners.
This is where the district highlighted another issue in terms of what the state reports as the true cost of special education services and how the capping of funding for special education students is a particularly large hindrance.
According to SKPS representative Aaron Harada, the arbitrary rules the state uses to determine these costs understate what they are.
“For the 2024-25 budget, SKPS will spend around $100 million in general fund dollars on special education services,” Harada said.
He noted that each year the price tag for special education grows as does the complexity of need for special education students and that the cap on funding that exists to shield the state from rising costs that are then placed onto the school districts.
“If the state removed the special education cap and funded the full cost of special education weights, Salem-Keizer would be eligible for an estimated additional $20 million per biennium,” Harada finished.
Contact Quinn Stoddard
[emailprotected] or 503-390-1051
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