Salem, OR — In a significant move to address K-12 education funding in Oregon, Governor Tina Kotek announced a proposal today to increase the State School Fund (SSF) by an estimated $515 million above the current service level (CSL) for the 2025-27 biennium. This proposal aims to tackle budget shortages exacerbated by the expiration of federal pandemic relief funds, declining enrollment, and rising costs due to inflation.
The SSF is the primary source of state funding for K-12 public education in Oregon. The current service level refers to the amount of money needed to maintain existing authorized programs in the upcoming biennium. Governor Kotek emphasized the necessity of reviewing and updating funding methods to ensure stability and predictability in K-12 education funding.
“School districts across the country are grappling with budget shortages due to multiple factors,” Governor Kotek stated. “In response, we are committed to refining how the state funds public schools to support Oregon students, educators, and administrators better.”
Governor Kotek’s proposal outlines three crucial steps to increase the SSF. The first step involves changing the budget distribution from the traditional 50/50 split over two years to a 49/51 split. This adjustment will increase the second year’s funding, boosting the CSL calculation for the next biennium. This change aims to help districts manage rising costs in the second year, with a preliminary estimate of a $217 million increase in the CSL for the 2025-27 biennium.
The second step focuses on compensation costs. Currently, the state uses a model based on 20 years of historical data to account for these costs. Governor Kotek proposes narrowing this to 10 years to provide more accurate and recent data. This adjustment is expected to reflect a more precise compensation projection and will continue into future budget cycles. The preliminary estimate for this increase is $240 million.
The third step addresses local property tax revenue. The state’s traditional approach doesn’t account for fluctuations in local property tax revenue in the second year of the biennium. By directing state agencies to consider annual projected local revenue information, the state aims to improve funding accuracy. This change is estimated to increase the CSL by $55 million for the 2025-27 biennium.
Representatives from the Governor’s Office, the Oregon Department of Education (ODE), and the Chief Financial Office (CFO) presented these updates to the legislative Joint Task Force on Statewide Educator Salary Schedules. A recording of this presentation is available for public viewing.
Governor Kotek underscored that the goal is not just about increasing resources but achieving specific outcomes. “We aim to improve education outcomes for our students, from early literacy rates to graduation rates. It’s about ensuring we have a stronger, more accurate, and predictable funding model for K-12 public education across Oregon,” she said.
For further information or to get involved, contact Elisabeth Shepard, Public Affairs and Communications Director, at Elisabeth.Shepard@Oregon.Gov. The state encourages educators, parents, and community members to stay informed and engaged as these funding changes progress.
Governor Kotek’s proposal represents a proactive step towards stabilizing and enhancing education funding in Oregon, reflecting a commitment to addressing current challenges and improving future educational outcomes for all students.
