Why Oregon Ranks 36th for School Funding

Tuesday, May 12, 2015

Rebecca Randall, GoLocalPDX Contributor

Oregon Legislature has promised schools $7.225 billion in funding—a nine percent increase over the 2015-2017 biennium, yet school districts all agree: it isn’t enough. Betsy Miller-Jones, executive director of the Oregon School Board Association (OSBA), said the number school districts were hoping for was $7.5 billion.

While critics will say that education advocates will always ask for more, the reality is that Oregon lags toward the bottom half of state rankings in terms of funding per pupil. In its 2015 Quality Counts report, Education Week ranked Oregon 36 out of 49 (Hawaii is excluded since its education system doesn’t compare well with other states) for the amount spent per student from state, local and national funds. The ranking includes calculations for equality across student populations.

Sen. Richard Devlin (D-Tualatin), the co-chair for the Senate committee that determines budget policy, is aware of the low rankings Oregon often receives. “We don’t actually think (funding) is adequate… The underlying problem is that we just don’t have enough resources to get that much higher or to where we think we should be.”

For starters, it’s important to understand that school budgets inevitably increase every year. Between 85-90 percent of school budgets are staff, most of which are covered by union labor agreements that set step increases and cost of living increases each year. “Just to provide the same services every year, it requires a good chunk more,” said Miller-Jones.

Additionally, school districts calculate the costs of adding new programming, which is often mandated by the state. This year, the state is requiring school districts to offer full-day kindergarten at no cost. Without more funding many districts will likely have to shift staffing to pay for the new programming. It could be larger class sizes in other grades or adjusted time spent in school. It will be different across districts.

“School districts are sandwiched between costs increasing that they don’t have control over and revenue that they don’t have control over,” said Miller-Jones.

Why is Oregon faring so poorly?

There are a number of explanations for this, yet the one that sticks out to Miller-Jones is that the state has been steadily decreasing the portion of the pot it allocates for schools. In 2003-2005 biennium, the K-12 schools received 44.8 percent of the general fund and lottery dollars. In 2013-2015, K-12 schools only received 39.7 percent.

“That’s the one that really raises questions. There’s no solid reason why the percentage should go down,” said Miller-Jones. “That’s a shift in priorities from the state and a shift in priorities from public education.”

Devlin agreed that the number should be higher, but suggested the percentage should consistently remain in the low 40s for K-12 education.

If the state had kept the percentage of allocation at the 44.8 percent level, it would have meant an extra $850 million in the 2013-2015 school year.

Yet Miller-Jones said that doesn’t even get Oregon’s education to be competitive with what is offered nationally. In addition to the $7.5 billion requested by schools this biennium, it would take another $450 million to provide instructional time equivalent with national averages and $1.2 billion to lower class sizes to be on par with the nation.

According to the National Education Association, in 2012, Oregon ranked second worst for its 21.8 student-to-teacher ratio behind California (This isn’t the same thing as class size, which in K-3 could be as much as 9 or 10 students more than the ratio).

Compared to kids who attend Washington schools K-12, Oregon students spend one full year less in school by the time they graduate, said Miller Jones. That figure considers the number of standard days (not school hours).

Furthermore, Oregon’s high school graduation rate is second to last; at 68 percent it was only ahead of Nevada in 2012, according to the U.S. Department of Education.

The Quality Education Commission, set up in 1999 under Gov. John Kitzhaber, came up with a financial need of $9.1 billion in the 2015-2017 biennium to reach the state’s education goals—pretty close to the OSBA number. The state’s banner goal is the 40-40-20 goal, which aims to have 40 percent of Oregonian earn a bachelor’s degree, 40 percent a community college degree and 20 percent at least a high school diploma by 2025.

And while Miller-Jones’ concern that education is less of a priority in the state due to the decreasing piece of the pie given to schools, the reality according to Devlin is that there just isn’t enough revenue in Oregon to meet quality measurements.

“People somehow think that are revenue system was designed to meet needs,” he said. But the revenue system was structured around the initiative process, which gives voters input on funding.

Up until the early 90s, school districts did not face strict limits on how much they could tax local property. But since wealthier districts have higher property values, the state’s lower income districts hadn’t been collecting as much. In some cases, funding varied as much as 40 percent between districts. Measures 5 and 50 changed that. There are now limits on local property taxes, and while communities are still able to take local option levies to the voters, the reality is that not all district are able to pass a levy.

“It was an attempt to create equity in funding,” said Miller-Jones. The law helped to an extent, she said, though not all districts gained from the change.

Oregon doesn’t compare well to other states in this way, said Devlin, as many better funded state education systems have a lot more local funding. In Oregon, about 67 percent of public school funding comes from the state, he said.

While property taxes are one source of revenue that is allocated to schools, education funding is tied primarily to income tax—a source that is instable during a bad economy.

One way to change the volatility of funding would be to balance the sources of tax revenue in Oregon—which could be done by adding a sales tax. States with property tax, income tax and sales tax are generally more stable. “In general, it is considered the three-legged stool,” said Miller-Jones. “The more diversified your sources of revenue are… the more stable your source of funding will be.”

Related Slideshow: Top 100 Oregon High Schools

GoLocalPDX has ranked high schools across the state based on a method developed at Babson College, Mass. See below for the top 100 schools in the Beaver State.

Why Oregon Ranks 36th for School Funding

Related Slideshow: Top 100 Oregon High Schools

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