September 30 Special Session a Watershed Event

Governor Kitzhaber has called the Oregon Legislature back into special session on Monday, September 30th. This day could well be an historic watershed event for education in Oregon. Depending on how this day goes, Oregon could be on the path toward fixing an inherently unstable school finance system, or it could remain stuck in the downward spiral it has experienced since passage of Measure 5 in 1990.

As I laid out in the opening post on this space on September 13th, the State of Oregon and Governor Kitzhaber have embarked on a process over three sessions of the Legislature that are some of the most significant policy changes in Oregon history. This began with the 2011 session which brought significant changes in governance, i.e., the creation of the Oregon Education Investment Board with the Governor as chair, creation of the position of Chief Education Officer, the Higher Education Coordinating Council, the Early Learning Council and the creation of the Deputy State Superintendent as an appointed position. The 2013 session just completed last summer saw significant reinvestment of $1 Billion additional education funding and the creation of $72 Million in "Strategic Initiatives" to reinvest in school improvement and professional development initiatives. The third stage, discussed by the Governor during the 2013 session, is looking to the 2015 session for the possibility of addressing tax reform issues in the state that could lead to stability and reliability of funding so much needed in Oregon. My superintendent and board member colleagues universally long for a state education finance system that offers stability and predictability year-to-year.

However, the 2013 session ended just short of the goal line of actually stopping the bleeding of school funding and creating a solid financial base for moving forward. The final package of proposed taxes, cuts in the Public Employee Retirement System and other steps proposed by the Governor did not reach final approval. It was a step forward, but not enough to head off additional educational cuts and reductions. The goal was to, at least, stop the ongoing decline in state funding and create a solid baseline.

So, Monday, September 30th, is a watershed day in Oregon. The Governor and leadership on both sides of the aisle appear to have reached agreement on a package that combines tax increases and tax restructuring; additional PERS cuts mainly in reductions to the cost of living adjustment formula, changes in the senior medical deduction and personal exemption, increase in the cigarette tax, and a corporate income tax restructuring which combines a tax break for partnerships, LLC’s and S-corporations with a tax increase on profits above $1.5 million. Rep. Bailey, D-Portland, called it a "sausage-making process." That may be true, but it may also offer a way forward to create stability now and prepare for the much needed deeper reforms in school finance that lie ahead. The bottom line is that the Republicans get additional reductions in PERS and the Democrats get increased funding for schools. Everybody gets some breathing room going into 2015. If successful, it is a welcome demonstration that political compromise may still work in Oregon after all.


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