Department of Education K-12 School Funding 2003-05 Governor’s Budget Department of Education K-12 School Funding Linda Ames Department of Administrative Services Budget and Management Division March 25, 2003

2003-05 Governor’s Budget State School Fund Budget Comparison Technical SSF Budget: no Federal Funds no accrued resources

2003-05 Governor’s Budget General Fund & Lottery Fund Expenditures ($11,404 million)

2003-05 Governor’s Budget Department of Education General Fund and Lottery Funds Grant-in-Aid is also funding that goes out to schools, ESD’s and other local providers, but for specific programs or targeted populations.

2003-05 Governor’s Budget State School Fund Total State Resources: $5,051.4 Million

2003-05 Governor’s Budget K-12 School Funding State and Local Resources: $7,319.4 Million Federal Funds – total GIA is $718 million.

2003-05 Governor’s Budget K-12 School Funding State and Local Resources: $7,319.4 Million

2003-05 Governor’s Budget School Funding as Percent of State Resources Measure 5 and 50 K-12 at 44% of state resources – up slightly from last two biennia: Within a limited budget, Governor did give priority to K-12. Note: “State Resources” include education lottery bonds, MUPL, Education Stability Fund, as well as General Fund and Lottery Funds.

2003-05 Governor’s Budget State School Fund by Fund Type Use of one-time funds in 2001-03 was significant. GF is substituted for all these in the 2003-05 budget. Total funding for 03-05 is up 3% from Sixth SS level (including accrual), but GF is up 18%. Includes $211 accrued resources as General Fund in 2001-03 through the Sixth Special Session.

2003-05 Governor’s Budget State School Fund Reductions in 2001-03 $112 million – Eliminate School Improvement Fund. 2002-03 School Year. $20 million – 2002-03 School Year. $95 million – As a result of Ballot Measure 28 failing. $46 million – Implemented January 2003 by Administrative Rule. $8 million – Estimated SSF portion of MUPL Shortfall. Total Reductions of $282 million. -5.4% of biennial state funding. -10.6% of state funding for 2002-03 school year. Note: Does not include a $17.7 million reduction that was offset with additional Common School Fund resources.

2003-05 Governor’s Budget State School Fund Changes to 2001-03 Funding

2003-05 Governor’s Budget State School Fund Continues all reductions through the Fifth Special Session. All cuts are in 2002-03, so are doubled in 2003-05. Reduction of about $500 million. Eliminates all salary increases [Cost-of-living adjustments (COLAs), steps], increases in health benefits, and inflation on Services and Supplies. Reduction of about $550 million. Funds student growth and PERS increase. Adds back $100 million. Priority of restoring school days/programs. Within limited resources, supports education as high priority. Funds current local option equalization grants ($550,000). Student Growth ADMw: 1.4% and 1.1% ADMr: 0.7% and 0.6% PERS increases from 12.73% to 16.71% - a 31% increase Local option equalization grant program was established by HB 2300 during the 2001 leg session. Provides some state matching funds for school districts who pass local options levies and have lower property wealth. Current districts receiving grants – Pendleton, Colton, Oakland Beginning next year – add Seaside Budget includes $470,000 for existing districts, and $80,000 for local options that may pass in May elections.

2003-05 Governor’s Budget Budget Process for 2003-05 School Revenue Forecast Committee Executive Order 99-15. Second biennium this process has been used. Data-based process to estimate resources needed for current program level. Provides forecast information to school districts for planning purposes. Membership includes technical staff as well as education stakeholders.

2003-05 Governor’s Budget Budget Process for 2003-05 School Revenue Forecast Committee Develop forecasts: Student Growth. Property taxes and other local revenues. Growth in Personal Service costs, including COLA’s, steps, turnover, increases in health benefits and PERS. Major improvement this biennium: Department of Education developed model for Personal Services costs. Model incorporates actual teacher salary data, current benefit costs, and retirement data. “Current program” costs with no cuts: $6.0 billion state funds. “Current program” costs with cuts through the Fifth Special Session: $5.5 billion state funds.

2003-05 Governor’s Budget Biennial General Operating Revenue (Dollars in Millions) Components of $119.1 million increase: $135 student growth $150 PERS - $110 turnover - $ 55 base adjustment

2003-05 Governor’s Budget State School Fund State Funding by Year Note: Chart does not include 2001-02 School Improvement Fund of $108 million.