by Craig Hawkins, Communications Director

Friday, April 3, 3:25 p.m.

The group discussed a potential statewide strategy and a statewide "number" ranging from $5.4 billion to $6.2 billion.  Districts have different situations and different approaches, but the group seemed to agree that we should advocate for a number in the higher end of the range.  Everyone agreed, though, that districts have a need for planning at various levels, as well as a a need for community processes and thorough communication about impacts of the various funding levels.

2:45 p.m.

Kent Hunsaker shared the document, "Best Investment for Main Street? It's K-12 Schools." 

2:15 p.m.

Attendees encouraged Sager to work with the governor to provide greater leadership on the budget issues confronting schools, including working with employee groups to participate in finding solutions that preserve as many school days, classrooms, programs, etc., as possible.

1:57 p.m.

Key points from Paul Warner:

- The national economy is still contracting at a rapid rate, so things are very uncertain and it’s a very difficult time to build a budget. 

- Information since March shows that state revenues are tracking below the trend shown by the March forecast.  State employment is much weaker than the estimate included in the March forecast.  We are anticipating a lower level of unemployment in the May forecast and throughout 2009.

- Preliminary income tax collections are down about $40 million for individual taxpayers.  Our real concern is on the corporate side, where payments have been roughly half of what was projected, and are down about $50 million.

- We think the May forecast will be down.  But we are starting to see some early indications that this economy is bottoming out, in terms of housing, consumer spending and financial markets. 

- In general, our overall scenario is that the recession will end late this year nationally.  Unemployment, though, probably won’t peak until later in 2010, with Oregon reaching 12%.

1:28 p.m.

Some of the key points framed by James Sager:

- When the governor released his budget Dec. 1, it included planning for $1 billion short of essential budget level.  Since that time the state has lost roughly another $2 billion in revenue, and unemployment continues to rise up to 1 percent per month.

- Our concern is a year from now.  After talking with variety of economists, we believe that the bottom is still out there a ways, and when you look at Oregon's history of being late getting in and late getting out (normally at least two quarters) of recessions, it may be early next year before hit bottom.  It's possible the bottom could last a couple of years, and it could be four-to-five years before state revenue reaches historical trends for growth.

- We believe that we could be down another $2 billion in revenue a year from now (the Ways & Means co-chairs estimate $1.4 billion).  We're concerned that the May 15 state revenue forecast may not capture the complete loss, so the legislature could, on paper, approve budgets at a higher rate than we will actually receive.  That will cause the legislature to come back into special sessions.  We're trying to avoid that.

- The additional $2 billion loss would leave schools with $5.422-$5.5 billion, after using all federal stimulus and reserves. That amount would include any SIF funding.

12:59 p.m.

It's standing room only for the meeting today, with superintendents and business managers packing-to-overflowing the 120-person meeting room.  First up will be governor's office representative James Sager.

Wednesday, April 1

To assist superintendents and business managers who are unable to attend, we'll be blogging live from the school funding meeting in Salem Friday.  COSA will be joined by James Sager and Paul Warner for discussion of the revenue forecast and district budgeting for 2009-10.  Here are the materials for the meeting, which begins at 1 p.m. at the Viticulture Center:

Overview of 2009-11 K-12 Funding

2009-10 School District Finance Distribution based on $6.2 and $6.0 billion

2009-10 School District Finance Distribution based on $5.0 and $5.8 billion  

2009-10 School District Finance Distribution based on $5.8 and $5.6 billion  

2009-10 School District Finance Distribution based on $5.6 and $5.4 billion  

2009-10 ESD Finance Distribution based on $6.2 and $6.0 billion

2009-10 ESD Finance Distribution based on $6.0 and $5.8 billion 

2009-10 ESD Finance Distribution based on $5.8 and $5.6 billion 

2009-10 ESD Finance Distribution based on $5.6 and $5.4 billion  

-- The Oregon Department of Education has launched an American Recovery and Reinvestment Act (ARRA) website to provide Oregon school districts with up-to-date, Oregon-specific ARRA information.  The site, which will be updated almost daily, provides funding timelines and information for Oregon districts, as well as guidance about use of IDEA, Title and other ARRA funds.

-- Questions and answers from Bruce Hunter's free Economic Stimulus Webinar are available at the AASA website: questions & answers.

-- NASSP reports that the U.S. Department of Education released guidance on the Title I, IDEA, and State Fiscal Stabilization Fund (SFSF) funding that was included in the American Recovery & Reinvestment Act.  Here is a summary of the guidance, but more detailed information can be found at this Recovery.Gov link. Please note that we are still waiting on further guidance related to the $3 billion allocated for school improvement grants, and the 40% provision for middle and high schools.

-- ODE's Rob Larson shares this report on Congressional intent and provisions in ARRA, with the best information to be found under the "P.L. 111-5 sections," he says.

-- The Oregon Department of Education has shared this nicely-organized summary of Oregon education funding and implementation information on the American Reinvestment and Recovery Act.

-- The U.S. Department of Education has created a specific ARRA web page, where information on the act will be posted as it becomes available.  Currently, it offers the press release, a more detailed fact sheet, and links to budget information, including state-by-state allocations for formula-based programs, as well as a brief "video statement" by Secretary Arne Duncan.

-- The Recovery.gov web site is now live.  The mission of this site is three-fold: education (explain the ARRA), transparency (show how, when, and where ARRA money is spent), and accountability (furnish data that will allow citizens to evaluate the act's progress and provide feedback).  There are already projections -- based on ARRA language -- of the effect on jobs state-by-state.

Questions or comments about ARRA or school funding in Oregon?  Post your question or comment below, and COSA staff will respond.

By Chuck Bennett, Director of Government Relations

“Don’t believe everything you think.” Not particularly philosophical but pretty good advice, especially when you’re figuring out how to respond to state and national economic news.

The most common question I am getting right now regarding the 2009-11 state budget and State School Fund is, “what’s the number.” Anyone new to Oregon should know that “the number” is a reference to the amount allocated by the legislature to the State School Fund for the next two years.

by Kent Hunsaker, Executive Director

Education advocates presented four hours of testimony at a Joint Ways and Means Committee hearing last night, imploring members to use the Education Stability Fund to fill the 2007-09 budget shortfall for Oregon's K-12 schools.

South Lane Superintendent Krista Parent and Beaverton Chief Financial Officer Claire Hertz described the financial challenges their districts face if the legislature doesn't tap the Education Stability Fund for the current biennium.  Their message was echoed by school board members, teachers, classified employees and parents from around the state.

Here is Krista's testimony and Claire's presentation.  My testimony is pasted below.  Each speaker was limited to three minutes, which was challenging, to say the least -- we all had a lot more to say than the alloted time allowed.

Testimony to the Joint Ways and Means Committee
February 11, 2009

"Co-Chair Carter, members of the committee. My name is Kent Hunsaker, Executive Director of COSA. I want to thank you for the opportunity to address the committee. I have provided you with a one-page handout entitled 'A Pathway for Funding Schools in 2007-09.'

You have indicated that you are seeking information on the impact of a proposed 5% BI-ENNIAL reduction in state funding. First of all, 5% sounds small, but when you consider it is a BI-ENNIAL reduction with only 4 months or 1/6 of the biennium remaining, it is equivalent to a 30% reduction in state funding.

It is important to note that schools already reduced $61.2 million in November. As a result of that reduction school districts have frozen spending, instituted hiring freezes, reduced reserves and already several districts have shortened the school year, including Ashland, Cottage Grove, Lincoln County, Reynolds and South Umpqua.

If the next wave of reductions is 4 or 5 times larger, then most, if not all school districts will face early closure of school.

Given the reality of imminent school closure, we urge you to fill the projected shortfall with the Education Stability Fund. The fund was established in September 2002 by a vote of the people, hence it is constitutional. The Oregon Constitution states that the fund is to be used “for the public purpose of financing public education in Oregon.” Previous Legislative Sessions have used the fund on 2 occasions, in a June 2002 special session and a 2003 regular session, transferring a total of $272 million to the state school fund.

The Education Stability Fund currently contains $393M. If the reduction to fill the shortfall turned out to be 5% of biennial revenue, you could fill the $205M gap and still have a substantial amount remaining.

Why Tap the ESF?

• It ensures a full school year for Oregon’s children.
• It ensures that Oregon’s grade 12 students will be able to graduate.
• It prevents cuts in services to Oregon’s neediest children, including breakfast and lunch programs for over 200,000 students.
• It impacts jobs and the local economy of every Oregon community, as you can see on the other side of our handout.
• It gives districts time to make the best possible choices for the future, rather be left with no choice but to cut days.

Thanks again for the opportunity to advocate for Oregon’s School Children and a full year of school for them."