Oregon

STATE FUNDING FORMULA

Oregon's state school funding formula utilizes a vertical equity structure. It is divided into four grants: General Purpose, Transportation, High Cost Disability, and Facility. State revenue is distributed through the Formula, while local revenue (though counted as part of the formula) is retained by the district.

Grants Provisions

• • General Purpose Grants: These grants are based on a weighted student count and account for approximately 93% of the formula's revenue.

• • Transportation Grants: These grants are based on actual expenditures and are used to adjust for different costs per student. They account for up to 90% of approved transportation costs.

• • High Cost Disability Grant: This grant is provided to districts to help defray the cost of high-need special education students. The grant is provided for students who cost more than $30,000 per year.

• • Facility Grant: The grant is used to help districts provide for new classroom space. It covers up to 8% of total construction cost.¹

FUNDING PRIORITIES FOR P-12 AND/OR HIGHER EDUCATION²

In the State of the State address, Governor Brown asked for an increase in the state's budget for elementary and secondary education. The increased funds would be earmarked for improving issues related to school attendance and student trauma. She also wants to increase investments in technical and career training.³

CHANGES TO FUNDING FORMULA FOR P-12 AND/OR HIGHER EDUCATION

There were no significant changes in the funding formula from 2016.

PRESSING STATE ISSUES AFFECTING P-12 AND/OR HIGHER EDUCATION FUNDING

In 2016, voters were asked to decide on Measure 97, which would have established a 2.5% tax on gross sales on corporations that exceed $25 million in gross sales, potentially increasing revenues by an estimated $548 million within the first six months of 2017, eventually providing around $3 billion per year. This was the most expensive ballot initiative to date in Oregon. Both supporters and opponents raised over $46 million for advertisement, with opponents outspending supporters by almost $10 million.

In January 2017, the state's legislative budget writers released a projected budget of $20.6 billion, reflecting a $1.8 billion revenue shortfall. This projection would inevitably lead to cuts in education, and other states services.⁴ Since 2008, at the end of the Great Recession, Oregon's K-12 funding is still 8.9% lower than pre-recession levels.⁵ Also, combined state and local funding is 6.2% lower than pre-recession levels.⁶

Funding for higher education in Oregon has also failed to return to pre-recession levels. As of 2016, Oregon's percent change in spending per student was 21.7% below pre-recession levels. There has been a 16% increase in state spending for higher education between 2015 and 2016. During this same period, Oregon has raised its tuition at public, four-year institutions by 37.9%.⁷

One area of funding stress is the state's tax structure, which is still slightly regressive. Although it ranks 48^th on the Institute for Tax and Economic Policy's (ITEP) Tax Inequality Index, corporate taxes represent less than 0.2% of income for corporations making over $371,000 per year. By contrast, the bottom 20% of income earners (making less than $19,000) pay over 8.1% of their income in state taxes (after any Federal offset), while those at the top 1% of income (earning over $375,000 per year) pay only 6.5% of taxes from total income.⁸

EXCLUSIVE TO P-12: FORCES DIVERTING FUNDS FROM TRADITIONAL PUBLIC SCHOOL DISTRICTS AND/OR EXCLUSIVE TO HIGHER EDUCATION: TRENDS IN STATE FUNDING FOR PUBLIC INSTITUTIONS

Overall funding is low in Oregon compared to pre-recession levels. As of 2014, funding for Oregon is still 8.9% less than pre-recession levels. The loss of school funds has resulted in a loss of school staff resulting in more crowded classrooms, shorter school years, and lower graduation rates.⁹

The two highest state taxes, by percentage, are income and property taxes. Since 2006, the percent of revenue generated by income taxes has decreased, while revenue generated by property...