On Tuesday, December 1st Governor Kate Brown released her proposed budget for the 2021- 23 biennium.
The Governor recommends balancing the $25.6 Billion general and lottery fund budget through a combination of one time funds, $310 million in new revenue, and makes some modest assumptions about continuation of federal Medicaid assistance programs. The budget recommends using $215 million of the Education Stability Fund, and raises $310 million in new revenue through eliminating some tax expenditures (pass through), disconnecting from portions of the federal tax code included in the CARES act, limiting the home interest mortgage deduction to first homes, increasing tax surcharges on distilled spirits, and increasing rural hospital assessment rates. Additionally, the budget also proposes the closure of three prisons and makes some targeted cuts to the Oregon Health Plan.
The budget largely protects higher education from cuts in state funding, here are the highlights for OSU.
Public University Support Fund: $836.9 million General Fund, unchanged from the 2019-21 Legislatively Allocated Budget (LAB), but a net $6.9 million increase with the movement of two OSU programs out of the PUSF (see Statewides and State Programs sections below).
Capital Construction: Cordley Hall ($86 million) and the OSU-Cascades Student Success Center ($13.8 million) were recommended for funding alongside projects at PSU, UO and EOU. An additional $80 million for capital improvement and renewal (CIR) was recommended for the public universities. OSU typically received about a third of CIR funds. The document lists the OSU-Cascades Phase 2 Land Remediation as being recommended, but it was later clarified by the Governor’s office that they intended to recommend the Student Success Center and will make the fix. XI-F bond projects were not included in the recommendation for any of the universities.
OSU Statewide Public Service Programs: $193.0 total funds. The Statewide Public Services Programs, including Outdoor School, are funded at 2019-21 LAB levels. Additional funding comes from moving funding for building maintenance of statewide public services facilities support ($4.1 million General Fund) from the Public University Support Fund to this program.
Public University State Programs: $44.7 million total General Fund. The regular Public University State Programs (including for OSU: OCCRI, Fermentation Science, Marine Research Vessel, Institute for Natural Resources, TallWood, ATAMI, and Engineering Technology Sustaining Funds) are funded at the 2019-21 Legislatively Approved Budget level. The Governor’s Budget moved $2.8 million General Fund for the Veterinary Diagnostic Lab out of the Public University Support Fund and into this program area.
Financial Aid Programs:
- Funding for Sports Action Lottery scholarships was increased slightly to a total of $15.1M. OSU and UO each receive $1,030,000 of these funds for scholarships for student athletes and graduate students.
- The Governor recommended increasing funding for the Oregon Opportunity Grant by $4.7 million (CSL), bringing the total amount to $114.2 million.
- The Governor recommended increasing funding for the Oregon Promise by $1.26 million (CSL), bringing total funding for the program to $42.2 million.
The Governor’s budget is based on the December 2020 revenue forecast, which continued to predict modest revenue growth and shows that state collections had largely recovered from the COVID-19 associated shutdowns that occurred during the spring of 2020. The forecast however did not capture lost revenue associated with current COVID-19 restrictions.
The Legislature will convene on January 19, 2021 and are constitutionally required to adopt a balanced budget no later than June 28, 2021.The state economists will deliver two revenue forecasts before the legislature must conclude their work this summer.
While uncertainty around the logistics and timing of the 2021 session remain, OSU is actively working with the other public universities, faculty, staff, students, and alumni to make the case that lawmakers must increase funding above the levels included in the Governor’s budget. This will be essential to help the institution maintain financial stability. For now, we are grateful that cuts in our state appropriation that we feared over the summer months are not reflected in the Governor’s budget, and are hopeful that we can increase funding by working with legislative leaders over the next 6 months.
The Governor received a question about higher education funding in her press conference this afternoon. When asked, she stated: “I did not have the resources I wanted when building this budget…. My goal is to work with the legislature to find more resources for our universities and community colleges…..universities literally open up the world for our students and we need to work to increase funding.”
The Governor was also asked a question about OSU-Cascades during the press conference. She commented: “What I have heard from the [OSU-Cascades] community is that the Student Success Center is really important. In my visits to the university I heard from students who said that ‘honestly, I wouldn’t be able to attend higher education without the presence of this campus in Central Oregon’. I know it is a life-changer for many Oregon students and I look forward to working with the Legislature to fund this particular project.”
Governor Brown releases 2021-23 proposed budget
On Dec.1 Oregon Gov. Kate Brown released her recommended budget for the 2021-23 biennium.
The Governor’s budget is based on the November 2020 revenue forecast, which continued to predict modest revenue growth and shows that state collections had largely recovered from the Covid-19 associated shutdowns that occurred during the spring of 2020. The November forecast however did not capture lost revenue associated with current Covid-19 restrictions.
The proposed budget may impact the University of Oregon in the following ways:
Public University Support Fund
The fund that provides operating funds to Oregon’s seven public universities was held flat at $836,898,583. Because of the way the state splits biennial funding (49% in the first year, and 51% in the second) flat funding constitutes an estimated $3 million cut to UO for FY 22.
The Governor maintained current funding levels for University State Programs. At the UO these programs include Engineering Technology Sustaining Funds (ETSF), the Tall Wood Design Institute, the Oregon Office of Community Dispute Resolution (OOCDR), Signature Research Centers, the Labor Education Research Center (LERC), and Clinical Legal Education.
The Governor recommends $309.4 million in funding for university capital construction projects, including $80 million for a Capital Improvement and Renewal (CI&R) a fund that is distributed to campuses by formula. The Governor also included $58.5 million for UO’s Heritage project, a renovation of University of Villard Halls that will provide critical seismic, fire, and life safety upgrades and make the facilities accessible and compatible with modern technology and classroom learning while preserving the architectural and historic significance of the site.
Funding for Sports lottery scholarships was increased slightly to a total of $15.1M. UO receives $1,030,000 of these funds for scholarships for student athletes and graduate students.
The Governor recommended increasing funding for the Oregon Opportunity Grant, Oregon’s largest state-funded, need-based grant program for college students, by $4.7 million, bringing the total amount to $114.2 million.
The Governor recommended increasing funding for the Oregon Promise, which covers tuition costs at Oregon community colleges for recent high school and GED test graduates, by $1.26 million, bringing total funding for the program to $42.2 million.
The Legislature will convene on January 19, 2021 and are constitutionally required to adopt a balanced budget no later than June 28, 2021.The state economists will deliver three revenue forecasts before the legislature must conclude their work this summer.
Gov. Kate Brown and top lawmakers have found common ground on increasing money for K-12 schools in Oregon, after a pronounced disagreement came to light earlier in the week.
In a statement Friday, Brown’s office said the governor now agrees with House Speaker Tina Kotek, D-Portland, and Senate President Peter Courtney, D-Salem, that the state should budget $9.3 billion into the state’s main school fund over the next two years.
That amount is less than the $9.6 billion that school officials and Republican lawmakers have pushed for this year. But it’s roughly $300 million more than budget staffers say would be necessary to fully fund schools at current service levels. It’s also $200 million more than Brown’s own proposed budget for K-12 instruction.
That difference has led to notable tension between three of the state’s top Democrats. On Monday, Brown sent a blistering letter to Kotek and Courtney suggesting their plan to pull $200 million from a state reserve fund in order to reach their budget was unconstitutional and risked leaving disadvantaged students behind.
“You may be willing to wait another two years to make equitable reforms — to yet again promise to communities of color that we’ll get it right ‘next time,’” Brown wrote. “I am not.”
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Now, four days later, Brown’s office says an accord has been reached.
“The Governor appreciates that she, the Speaker, and the President are able to have open, honest, and sometimes contentious discussions, even when they do not all immediately agree…” Charles Boyle, the governor’s deputy communications director, said in a statement.. “Today’s announcement reflects the consensus on public school funding.”
About all that’s clear from Brown’s announcement is the dollar amount. Still unknown is whether legislators will seek to pull that money from reserves -- which Brown has said would be illegal, but lawmakers believe is fair game -- or whether a new revenue forecast scheduled to be unveiled next week will turn up the extra $200 million. While the particulars of that forecast are unclear, officials have suggested lottery and income tax receipts might be higher than anticipated.
Also uncertain is how lawmakers might spend the additional money to address disparities and the impacts of COVID-19 on underserved student populations, as Brown demanded in her letter. “In the coming days, the Governor’s Office and legislators will work with education leaders and leaders from communities of color to identify concrete actions to be undertaken in partnership with school districts to further these urgent goals,”
The announcement came hours after the Legislature’s Ways and Means Committee passed a schools budget that contains the full $9.3 billion out to the full Senate. In the same meeting, the committee punted on one piece of that proposal: a bill that would have authorized lawmakers to pull $200 million from the state’s Education Stability Fund, the reserve pool of cash that’s supposed to be tapped during recessions to avoid budget cuts.
Republican lawmakers once again Friday sought to send $9.6 billion toward the state’s school fund.
Oregon schools “have struggled to get out of the bottom,” House Minority Leader Christine Drazan, R-Canby, said in that meeting. “I’ve worried this whole year: What does COVID do to that? I don’t understand why we wouldn’t do everything we can.”
State Sen. Elizabeth Steiner Hayward, a Portland Democrat and budget co-chair, said that funding from a new business tax, federal aid and other priorities actually reflected roughly $12 billion in spending on students.
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Governor's Recommended Budget Released - K-12 Funding Prioritized
Today, Governor Kate Brown released the Governor’s Recommended Budget (GRB) for the 2019-21 biennium. By law, the budget must be balanced and includes spending and investment priorities from all major revenue sources such as the General Fund, Lottery Funds, Federal Funds and Other Funds (fees, assessments, earnings, marijuana taxes, etc.). It also includes funding for capital projects through bond sales or other debt financing. The GRB is our first opportunity to review the spending and investment priorities of Governor Brown prior to the start of the 2019 Legislative Session.
The GRB includes a base, balanced budget using available revenues and an investment budget based on passage of a significant revenue package. In summary, the GRB prioritizes K-12 education expenditures in the base, balanced budget and proposes significant K-12, early learning, and higher education investments tied to new revenue.
Key expenditures in the base balanced budget include:
- An $8.97 billion State School Fund, plus $100 million to help pay down the K-12 PERS liability, for a total allocation of $9.07 billion. This is $300 million above the State’s K-12 current service level (CSL) calculation of $8.77 billion.
- $170 million for Measure 98;
- $100 million for Seismic Rehabilitation Grants;
- $100 million for the Oregon School Capital Improvement Matching program (OSCIM);
- $16 million for scholarships and educator pathway programs (grow your own) developed in partnership with school districts, ESDs, and higher education to diversify the K-12 workforce and help address workforce shortages;
- $6.3 million to implement the recommendations of the Safe and Effective Schools for All Task Force; and
- $10.8 million in additional funding for the African American/Black Student Success State Plan and the American Indian/Alaska Native State Plan
Key investments tied to the revenue package include:
- Creation of a $793 million K-12 school improvement fund to provide for QEM recommended class sizes in grades K-3 and a full school year (180 days) for every district;
- An additional $133 million to fully fund Measure 98 ($303 million total)
- $585 million for higher education;
- $285 million for expanding early learning opportunities for 10,000 low income children during the 19-21 biennium; and a
- $45.6 million EI/ECSE funding increase;
Combined, the base balanced budget and the investment package for K-12 totals more than $10.15 billion.
Here are some links to today’s GRB release and materials for more information:
Governor's Budget Message and Executive Summary
Governor's Recommended Budget (full document)
Today’s budget is a very encouraging step toward providing K-12 schools the funding necessary to serve the needs of all students. Investments in K-12 are clearly prioritized and it gives our advocacy efforts credibility and momentum heading into the 2019 Session.
As the hard work of the Session looms, it is important to know that 2019 will be a real opportunity to fundamentally change the trajectory for Oregon and its children. The Governor’s budget and the work of the Joint Committee on Student Success are overwhelmingly positive and aligned with COSA’s priorities. And revenue reform feels very tangible – The Oregonian has reported that Senate President Peter Courtney has said the Legislature should consider a multibillion dollar tax increase in 2019 to boost K-12 education spending.
Please contact Morgan Allen at [email protected]@k12.or.us if you have any questions or need additional information.
Governor budget oregon
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