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HB 3498 will Provide Stability and Excellence for Oregon's Schools.

In my most recent post on this blog I put forth a brief critique of the Minnis K-12 school funding plan. In recent days, it's been encouraging to witness the increased scrutiny this funding scheme has received in lieu of the early coverage that was both superficial and deferential.

And while it's heartening to observe this flawed plan lost support in the house, we remain without a substantive K-12 education framework in place.

Despite media claims that the Minnis scheme is the only K-12 school funding proposal that's been offered, there have been a whole host of viable policy proposals offered this session by Oregon House Democrats. Unfortunately, the Republican-controlled House leadership decides which bills receive hearings and which won't. More than one viable school funding plan sits in the dark in Salem - never to see the light of day; at least not in this session.

HB 3498, a bill co-sponsored by 22 House Democrats, which currently sits in the House Revenue Committee, is illustrative of the Democratic school funding alternatives that have been crafted. What follows is a description of the bill and some of its rationale.

HB 3498 emerges from the premise that funding stability is a necessary but insufficient condition of sound education-funding policy. Stable inadequacy is neither sufficient nor desirable - a fundamental flaw of the Minnis scheme. In contrast, HB 3498 seeks stability, excellence, and predictability for Oregon's K-12 system of public schools.

HB 3498 adopts a new funding standard for K-12 education and establishes an Education Stability Program that sets both a floor and a ceiling for future school budgets. Under the program, the Superintendent of Public Instruction would calculate an amount that's not higher than the Quality Education Model standard - which the legislature enacted in 2001 - and not lower than 80% of that standard. Then, on or before January 15th of every legislative session, beginning in 2007, the Superintendent would submit that figure to the legislature, and the legislature would appropriate the specified amount of money to the State School's Fund for distribution to Oregon's school districts.

The Superintendent would base the calculation on the parameters of the 2004 Quality Education Model. Thus, rather than an arbitrary cap (that fails to take into account health care costs, a recession, and federal education mandates such as No Child Left Behind etc.), the bill creates a funding floor - thus providing for a full school year and reasonable class sizes for Oregon public schools. Finally, the bill's framework includes automatic structural adjustments to account for changes in school population and key cost drivers such as health care.

The plan avoids use of the volatile personal income tax as the structural underpinning for a "stability plan." It maintains the critical link between Oregon's corporations and public education, as enlightened corporate leaders in Oregon recognize the interdependence between business' support of public education and a thriving state economy. HB 3498, unlike the Minnis scheme, continues the use of corporate tax dollars to fund Oregon schools. Finally, the House Democratic approach to school investment focuses on performance standards - as opposed to an arbitrary percentage of the personal income tax in any given two-year period.

Regardless of which particular K-12 school funding policy one supports, Oregonians deserve a thorough examination and substantive debate that includes both the Minnis plan as well as the Democratic alternative. We're poised to chart a course for school funding that has enormous implications for the future of this state. We believe that it is our responsibility as legislators to have a deliberative discussion on the merits of competing policy proposals.

We sincerely hope that the Republican leadership will give legislators and Oregonians the opportunity to consider HB 3498 this session. Let's judge all viable plans on their respective merits.

To borrow a phrase from the Republican leadership at the federal level, "All we're asking for is an up-or-down vote."

June 23, 2005 by Larry Galizio
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Let's do it!

Posted by: Doug Wells | Jun 23, 2005 4:25:44 PM

Messaging is always key and I think too many people have heard "efficiency" - even the governor has been caught using this term.

1. We need to tell voters in easy terms how this money will benefit the quality of education. This does not mean how it will be used, but how it will directly relate to "smarter kids".

2. I think that's great to include the business community since they benefit the most. With so many different business forms, "business taxes"
have to replace the focus on corporate taxes.

3. Last but not least, I want to hear the word unfunded mandate at least 20 times a week. I don't care where that's coming from, but I don't hear people using it enough. The CIM/CAM is an expensive test and unless we can develop it properly, it will make a mess out of our educational system.

Posted by: Jenson | Jun 23, 2005 5:12:19 PM

Galizio, bloviating---zzzzz
Wells, 3 words, to the point.
Jenson, CIM/CAM---say good bye to a failure.

Brevity bids you adieu.

Posted by: brevityohyeah | Jun 23, 2005 9:41:57 PM

Okay - here's a question. Meth is important, I agree. But, it seems like all of the legislation and talk about meth is taking away from talk about schools. Let's keep talking about schools! We need to figure this out.

Posted by: Doug Wells | Jun 27, 2005 10:34:51 PM

What's to figure, Doug? The Bend-Lapine district and others are doing well on the projected allocation of $5.25 billion from the legislature. Portland and Multnomah county have been enabling unsustainable budgets in Portland School District 1J with local funds to settle various labor settlements since 1996. Why expect the legislature to
fund those budget rollups accumulated over all that time?

Posted by: gus | Jun 29, 2005 5:38:06 PM

Oh come on. Oregon is, what 28th in the nation for dollars spend per student? It is much more expensive to operate a large urban district than a small more rural one. Not better, but different and more expensive. For example, kids with special ed needs are drawn to Portland because of the availability of top quality hospitals and facilities. Portland special ed budget alone is $54M.

OR prides itself on being different and caring about education - 28th just doesn't cut it. Once we get up higher on that list, we can talk.

Posted by: Doug Wells | Jun 29, 2005 5:43:07 PM

While we wait to "get up higher on that list" wadda ya say we talk 'bout an obsenity called
PERS. Does PERS cut it for ya? Is PERS enough?
Come on.

Posted by: brevityohyeah | Jun 30, 2005 5:49:12 AM


I do find it interesting, as mentioned elsewhere on this blog, that people who are actually presenting valid ideas and possible solutions use their real names, while those simply on the attack use screen names. Might you have some brief responses to these questions:

1. Even with PERS, we are 31st in the nation in per student spending. Is 31st good enough for you?

2. Do you have a suggestion on PERS reform that hasn't been considered? Please don't offer the Lars Larson "fire them all and hire back only those who will come back with a 401k.

3. Do kids in Oregon have to wait until PERS meets your satisfaction before they get a decent education when there are clear steps we can take, such as Rep. Galizio's proposal, to start moving towards excellence in our schools?

Posted by: Rep. Peter Buckley | Jun 30, 2005 6:13:04 AM

PERS is bankrupting this state. You don't like Lars idea? What's yours? Drive taxpayers into oblivion?

Please don't use the nonsense that "kids" aren't receiving a good education. PERS is an enemy to education. Why else do 50 year olds retire? and then double dip? hmmmm

Posted by: brevityohyeah | Jun 30, 2005 7:59:01 AM

Oregon is 36th in the US in per-capita income and 28th in per-student spending. It seems that Oregon is already giving more than a fair share of taxpayer resources to public K-12.

Special Education students receive additional allocations to their districts from both the state and the feds. If the feds are not paying their promised share of mandated Special Ed costs, they, not the taxpayers of Oregon, should be getting pressure to ante up.

If Portland is the budgetary basket case it currently is because of Special Ed requirements, shouldn't that be discussed and funded with more specificity in Salem and the affected districts?

Posted by: gus | Jun 30, 2005 10:53:15 AM


I guess you didn't really want to answer any of my questions. Hard to have a dialogue that way. Rep. Galizio's plan actually offers a way to move forward. What besides attacking PERS do you have to offer?

And yep, you can find a good deal of unfariness in PERS. I didn't design the system, and the legislature in 2003, before I came here, made a sincere effort to address it. We have to continue to try to work out a bettery system, but proposals that are workable and legal are scarce. Again, I sure would like to hear yours, unless you are content to just snipe from the sidelines.

Gus--you bring up a GREAT point about special ed costs. The Feds promised to fund 40% of special ed costs and have never come close to it. If they did, it would go a long way towards addressing our K-16 budget problems. We need to keep bringing this up and putting pressure on Congress to do the right thing.

Posted by: Rep. Peter Buckley | Jun 30, 2005 1:59:28 PM

Why is disagreement on a tough issue like PERS considered as "sniping" or "attacking"?
1. yes (how much/what % is enough?)
2. declare bankruptcy (sorry if you can't swallow the thought)fire & rehire--thought of it long before Lars--private companies would have to do it!
3. question is absurd. Wait for what? 86% of school budgets are wages & benefits. Define "excellence" please.

Please don't waste space by telling us you didn't design PERS--that's childish---None of you 90 were around---you're excused on that!

This shouldn't be a feel good, milk & cookies forum. We don't have to walk lockstep with party leaders like you have to.

Posted by: brevityohyeah | Jun 30, 2005 3:14:41 PM

Rep. Buckley:

If Oregonians really want to have all kids get an excellent public education they are going to have to fully fund Head Start and other programs that enable the greatest number of kids to arrive at kindergarten ready to learn.

If Oregon wants better performing schools, fewer
delinquents, fewer addicts, fewer prostitutes, fewer criminals and fewer prisoners, Oregon needs to set and keep as many kids as possible on the path to education, empowerment and a productive way of life.

The preschool years are where kids get that affirmative start. Kids from at-risk families are most likely to be denied that start until programs for at-risk kids like Head Start are fully funded.

Posted by: gus | Jun 30, 2005 5:35:59 PM


Pretty thin skin you have there. Sorry if actually asking for reasonable proposals is so offensive to you.

What percentage or rating would be enough? I think Oregon should be in the top ten in per student spending. I believe that is an investment that will pay off for generations to come.

On the fire/rehire idea, even Kevin Mannix has stated that it is not only illegal, but misguided.

As to defining excellence--it's been done. It's called the Oregon Quality Education Model, designed by some of the best minds in education you can find. There was bipartisan support for the development of the model, but we have yet to find bipartisan support to provide the funding for it. Rep. Galizio's proposal (which, if you recall, is the subject of this thread) is a step in that direction--moving in a clear way towards the model of excellence that has been set out for our schools.

As far as being in lockstep, I believe you have the wrong House caucus on that one...

Posted by: Rep. Peter Buckley | Jun 30, 2005 5:39:53 PM

And Gus--

I absolutely agree. Most of my Democratic colleagues joined with me in voting against the budget for Head Start today--it only covers about 56% of the eligible kids, and that is totally unacceptable.

Posted by: Rep. Peter Buckley | Jun 30, 2005 5:41:37 PM

Thin skin--what the h are you talking about? I love the discourse. BTW, don't think I'm a partisan---to wit,

Mannix is a nutcase--but wasn't he, isn't he still a "D"? Wouldn't trust the little fella an inch. He can't, won't, ever win statewide.

OQEM--who wrote it? Educrats? (Wasn't that other "R" nutball, Lundquist in on that?)

Why are you so defensive about PERS. It's nonsustainable! The R's were told, last session, they were wasting our time with the reform. Told 'em so that the Supremes would gut the important stuff....

I'm still waiting for you to tell us HOW MUCH is enough for schools? 15K per kid?

Posted by: brevityohyeah | Jun 30, 2005 6:29:58 PM


Thanks for the comments back. Not sure how to focus on the QEM without bringing in people you think are nutballs. Lynn Lundquist was one of the proponents, I believe. I actually think Lynn is a worthwhile guy.

I actually agree that PERS is unsustainable as it is currently set up. We were given a break with a better than anticipated cash flow this year, but it remains a huge black cloud. I was serious when I asked for your proposal to address it--because I haven't come up with anything myself or heard any other proposal that seems workable. I don't think the reforms from last session were a waste at all--they were a small step forward that helps now and will help a bit more in the future, but doesn't solve the problem at all.

The changes from last session hold out long term hope--the next generation of public employees coming on board since then will have a different system that looks like it is sustainable, but that still leaves us with the current system to pay off for decades to come.

But again, our kids can't wait until we figure this out. We can fund good schools for them even with the PERS problem involved. As for how much we should spend? I think, looping back again, that Rep. Galizio's proposal is spot on--a minimum of 80% of the QEM projections. We could afford to do that with only a few changes--a revision of the corporate minimum tax rate, a review and elimination of tax expenditures (tax breaks) that no longer serve the best interests of Oregon.

Posted by: Rep. Peter Buckley | Jul 1, 2005 6:37:48 AM

Rep. Buckley:

Oregon is 36th in per-capita income. Yet you want K-12 funding at tenth in the nation and fully funded Head Start. Where do you raise taxes or cut programs to pay for that?

Who are those "best education minds" and where did they define or guarantee "education excellence" in the Quality Education Model? You get zero points for saying Lynn Lundquist as an educator or anything more than a liberal republican.

Posted by: gus | Jul 1, 2005 10:24:55 AM


Thanks for the words back. Working backwards--I didn't list Lynn as an educator, for goodness sakes. I mentioned him as one of the proponents of the legislation to create the QEM. The authors of the model can be tracked down if you like, but they were drawn from top educators from around the state. While the QEM doesn't guarantee excellence, I believe it actually does define what excellence would look like in our schools.

As to how to pay for it--Rep. Galizio's bill calls for a floor of 80% of the QEM. If we were to have that floor this year, it would require us to come up with about $300 million more than what we're forcasting the 05-07 for the K-12 budget to be. I would advocate, as mentioned above, for a revision of the corporate minimum tax to raise about $75 million, a tax amnesty program to bring in about $30 million, and a review and elimination of tax breaks that are not good policy for our state (I've identified nine worth $115 million in HB 3490). I know that still leaves us short of the goal, but the tax expenditures book is huge, and we need to go through it with an eye for the elimination of more breatks to help make up the rest.

As for our low per-capita income, I see it directly related to our low investment in education. We need to invest in education in a major way if we want to move that per-captia income towards the top ten as well.

Posted by: Rep. Peter Buckley | Jul 1, 2005 12:52:49 PM

Rep. Buckley:

You neglected to mention how much more it is going to cost to fully fund Head Start and where that money should come from?

You have said nothing that convinces me that the Quality Education Model was anything more than an exercise to add more spending to the current minor league public education infrastructure in Oregon. More spending is not going to provide any more excellent public schools than those the state now has in a few neighborhoods and communities.

If you sincerely want major league public education in Oregon you are going to have to build a major league public education infrastructure. I doubt if the legislature or the governor are capable of building that infrastructure as they are too dependent upon education special interests for political and financial support.

Posted by: gus | Jul 1, 2005 4:44:22 PM

Interesting observations. I don't know if this thread is still being read, but these are my comments. The high cost of individual K-12 compensation is the root of all of Oregon K-12 economic problems. Benefits aside, there is no state which has a wider divergence in K-12 teacher salaries and resident "per capita income", than does Oregon.

For whatever reasons, the State of Oregon has chosen a very highly compensated K-12 workforce, above a well compensated (in the top half of states) workforce. The "table has been run" for K-12 compensation. There are only 12 states which have higher K-12 "teacher salaries" than Oregon (NEA, 2005). In addition, Oregon has the #1 rated benefits package in the U.S. (Chalkboard, 2005), much of which is indexed to the high salaries. With salaries and benefits combined, Oregon K-12 employees are the 8th highest compensated in the U.S.(Chalkboard, 2005). This would not be considered as much of a problem if Oregon were an affluent state. The adverse effect is created from Oregon's 36th place ranking in "Per Capita Income" (http://www.bea.doc.gov/bea/ARTICLES/2005/04April/SPI.pdf , pg 78). This ranking has steadily deteriorated from the a 26th ranking in 1999. Simply, the very high "total individual compensation" per K-12 employee, has become a handicap for the expansion of K-12 education in Oregon. The significance can be quantified to $300 to $800 million per year additional costs, when compared to similar states ( Minnesota, Colorado, Wisconsin, Iowa, North and South Dakota, Maine, New Hampshire and others). All of these states compare very favorably to Oregon in K-12 academic achievement, including graduation rates and attendance rates. The $300-800 million difference per year, would translate into about 5,000 additional teachers, complete programs and school years.

The result is that Oregon has the 4th highest student/teacher ratio, very average academic results, curtailed programs, laid-off teachers at the expense of having among the highest compensated K-12 employees in the United States. Another negative by-product is an Oregon graduation rank of 32nd among states, even though we have among the easiest state graduation requirements.

Posted by: Bailie | Jan 2, 2006 8:34:39 AM

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