Does the state pick up 70 percent of the K-12 tab?

A few weeks back, Oregon Gov. John Kitzhaber offered his thoughts on several subjects during an address to the Oregon School Boards Association -- everything from PERS and No Child Left Behind to third-grade reading levels and his upcoming budget.

Before wrapping up his speech, he said he wanted to touch on one more item: The "disconnect" between "what is bargained for at the local level and the actual fiscal condition of the state."

The state, he said, has 197 school districts but nearly 350 local bargaining units and contracts. "These one- to three-year contracts that are bargained at the local level in many cases are disconnected from the revenue that's available in the state's school fund -- yet the state is required to come in on the back end and pick up 70 percent of the cost."

There’s a fair point to be made there -- the state picks up part of the tab for spending that it doesn't have any hand in negotiating. Yet, the assertion that the state picks up 70 percent of what school districts spend caught us off guard.

We did a quick check of the math from 2009-10 (that’s the most recent year that we have data available from the federal government) and found that total spending by K-12 school districts and education service districts was about $5.5 billion. The total state contribution to K-12 education that year was $2.95 billion. With a little division, you find that the state really only covered 53.4 percent of the bill -- not the 70 percent Kitzhaber referenced.

That’s a ways off, so we got in touch with Amy Wojcicki, the governor’s spokeswoman, to see what was up. The governor, she said in an e-mail, was referring to "funding for schools that comes through the State School Fund. This includes local revenues (primarily property taxes) and state funding. The state funding equals about two-thirds of the State School Fund."  

If you go back to the 2009-10 figures, you can tease apart three pots of money in the total $5.5 billion going to K-12 education. About $4.4 billion comes from Oregon -- $2.95 billion from the state and $1.5 billion from local property taxes and whatnot. Another $1 billion or so comes from the federal government in various forms. To get that 70 percent figure, the governor looked at just the money originating in Oregon: $2.95 billion is about 66 percent of $4.4 billion. (He then rounded up.)

But looking at the numbers that way didn’t make much sense to us. Why pretend that $1 billion doesn’t exist?

Ben Cannon, the governor’s education adviser, laid out their reasoning for us. Basically, he said, the federal funding doesn’t take into account any of the local bargaining -- so it makes sense to look at just the funding that’s coming in at the state or local level.

Even that explanation felt a little thin to us, though, because here’s the thing: The state and local funding levels aren’t connected to local bargaining either.

Let’s say, for instance, that Portland Public Schools suddenly decided all teachers should receive $1 million a year in pay and benefits. Well, that doesn’t mean the state has to adjust funding to meet that additional cost or, for that matter, that property taxes would go up. Portland Public might put up a fight for it -- but ultimately the state can say "no."

While that’s true, Cannon said, when school budgets grow, most of the pressure gets put on the state to step up. The reason for that, he said, is that the local taxes and the federal contributions are fairly fixed, so when the budgets are built, there’s essentially a gap between what schools need and what they’re getting through those first two sources. "The state's budget is built to fill that extra gap," Cannon said. "Do we have to fill it? No. But the expectation is the state will.

The governor has said, on at least two occasions, "the state is required to come in on the back end and pick up 70 percent of the cost" of K-12 schools in Oregon. That’s really only the case if you don’t include federal funds in the entire K-12 budget. Moreover, the state isn’t "required" to fund to any level. Historically, the state has stepped up to fill that "gap," as Cannon describes it, but there’s no commitment that it must.

This statement contains an element of truth but ignores some critical facts. We rate it Mostly False.

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