The Oregon Legislature is expected to debate K-12 education funding during the 2025 session. In anticipation, Gov. Kotek recently unveiled a proposal that would, through a few technical adjustments, raise the current service level for public schools during the 2025-27 budget-setting process.
Finding an extra $500 million in the state budget won’t be easy, but funding isn’t the only challenge legislators and taxpayers will encounter next year. Simply understanding how Oregon’s public schools are funded is difficult, too. Budgeting for state schools is notoriously complex. As a result, it can be difficult for taxpayers, and even legislators, to understand debates that involve the use of billions of dollars of public funds.
To address that information gap in anticipation of an eventful legislative session, the OBI Research and Education Foundation has released an education-funding primer created by Jim Scherzinger, who served as both director of the Legislative Revenue Office and superintendent of Portland Public Schools during his distinguished public service career.
The report describes the evolution of public-school funding in Oregon and addresses many sources of confusion, including the following:
- How much money is there? Most discussions about and coverage of public-school funding focus on a single source of funding, often the State School Fund. This report accounts for operational funding from all sources.
- What are the sources of revenue? School funding discussions typically dwell on discretionary funds distributed by the Legislature. But revenue from several sources supports public schools, including local property taxes and federal funds.
- How is the revenue distributed? Money finds its way to school districts from many sources according to varying rules. The report explains them.
- What is “the formula?” You can’t listen to a school-funding discussion without hearing this term, which describes the state’s method of distributing funds per student according to various factors. Now learn what it actually means.
- Why is school funding so complicated? Two reasons: history and policy choices. The report features a quick recap of major milestones and the reasons behind them.
- How does the CAT work? Adopted by the Legislature in 2019, the corporate activity tax (CAT) generates about 40% more revenue than it was expected to. The report explains how the revenue is collected and distributed.
Go here to read or download this report.
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