Oregon School District Funding Conversation
January 12 and 13, 2026
Hosted by the Oregon Educational Collaborative
State School Fund Basics��Ballot Measure 5 (1990) and Ballot Measure 50 (1997) capped local property taxes and placed the responsibility on the state to replace the lost revenue. ��
������State School Fund Basics��The legislature enacted the equalization formula in 1991 with the passage of Senate Bill 814. The new formula accounted for the needs of each district’s student population by assigning weights to students based on need, and then distributing funding based on each district’s weighted� population.���
State School Fund – Local Property Taxes
Will not be available until November from the County Tax Collector
Only collected funds are available
The State School Fund Grant will be adjusted depending upon funds above or below projected amounts
������Common School Fund��Established in Oregon’s constitution: � (a) The proceeds from the sales of the 16th and 36th sections of every township or of any lands selected in lieu thereof;�(b) All the moneys and clear proceeds of all property that may accrue to the state by escheat or forfeiture;�����
������Common School Fund��Fund Value (February 2025) - $2.38 billion��Annual Distribution - 3.5 percent��2025 Distribution - $76.8 million statewide�������
�������State Managed Timber��The Oregon Department of Forestry manages approximately 745,000 acres of forestlands across Oregon, on five large state forests and some other scattered lands.��These state forestlands are actively managed under forest management plans to provide economic, environmental, and social benefits to Oregonians.��Money generated from logging on these lands goes to county governments and schools in the state, based on the specific type of state land. ����������
�������Payments in lieu of Property Taxes��Fees paid by nonprofit organizations ��Agreed upon fees paid by entities within enterprise zones in support of local school districts�����������
�������State School Fund Distribution��The State School Fund (SSF) appropriation, along with formula local revenue, is split between school districts and ESDs, with school districts receiving 95.5 percent and ESDs receiving the remaining 4.5 percent. ������������
�������State School Fund Distribution��The Oregon Department of Education (ODE) then allocates money to each school district using the school funding equalization formula. To achieve equitable per-student funding, the current formula adjusts state aid based on local funding. �����������
�������State School Fund Distribution��The formula uses three methods to adjust for cost differences among school districts: teacher experience adjustment; transportation grant; and weighted student count.�����������
�������State School Fund Distribution��Enrollment Projections are based on October 1 District Enrollment Reports (which usually appear on the ODE Website in November/December). These reports are used as the basis for the March State School Fund estimate.�����������
�������State School Fund Distribution��Teacher Experience Adjustment –��School districts’ pay schedules are based in part on teacher experience. As teacher experience increases, so do salaries. An adjustment factor is added to the base per-student funding. This factor increases or decreases each district’s base funding per student.� ����������
�������State School Fund Distribution��Transportation – ��The transportation grant is a 70 to 90 percent reimbursement of approved student transportation costs, primarily consisting of school bus costs for transport between home and school, as well as class field trips. � ����������
�������State School Fund Distribution��Transportation –�Districts are ranked by cost per student. Districts ranked in the top 10 percent receive grants for 90 percent reimbursement of transportation costs. Districts ranked in the next lower 10 percent receive 80 percent grants, and the remaining 80 percent of districts receive 70 percent grants. To encourage efficiency, districts must fund remaining transportation costs from their general-purpose grants. �� ����������
�������SSF – Weighted Student Count��The distribution formula allocates funds to districts on a per-student basis. However, the formula recognizes that not all students cost the same to educate. Districts receive additional funding based on the educational needs of their student populations as defined in ORS 327.013 (2021). �� ����������
�������SSF – Weighted Student Count��Student Weight Calculations:�Standard student/standard school 1.00 �Additional Weights:� Special Education 1.00 � English language learner .50 � Pregnant and parenting 1.00 � Students in poverty .25 � Neglected and delinquent .25 � Students in foster care .25 � Remote Elementary Correction � Small High School Correction ��� ����������
�������Weighted Student Count- Special Education���Special Education 1.00 - Limited to 11 percent of a districts ADM���� ����������
��������������Weighted Student Count- Special Education��A High-Cost Disabilities Account is established within the State School Fund. Each fiscal year, the Department of Education shall distribute moneys from the account to school districts as high- cost disabilities grants. A school district may receive moneys from the account if the school district has a resident pupil with a disability for whom the approved costs to the school district of providing special education and related services exceed $30,000.����� ����������
��������������Weighted Student Count- Students in Poverty��Poverty Weight Calculation (ORS 327.013)��0.25 times the sum of the number of students who are in average daily membership and who are also in poverty families, as determined by the Department of Education based on rules adopted by the State Board of Education that incorporate poverty data published by the United States Census Bureau, student data provided by school districts and other data identified by the board����� ����������
��������������Weighted Student Count- Students in Poverty��The number of students qualifying for free/reduced meals may be a more accurate and timelier indicator of poverty that US Census data��Senate Bill 401 introduced in the 2025 Legislative Session would have increased the poverty weighting to .50������� ����������
��������������Remote Elementary Correction-ORS 327.077�A school may qualify as a remote small elementary school if the average daily membership in kindergarten through grade eight for an elementary school teaching:� (A) Nine grades is below 252.� (B) Eight grades is below 224.� (C) Seven grades is below 196.� (D) Six grades is below 168.� (E) Five grades is below 140.� (F) Four grades is below 112.� (G) Three grades is below 84.� (H) Two grades is below 56.� (I) One grade is below 28.�������� ����������
��������������Remote Elementary Correction-ORS 327.077��An elementary school does not qualify as a remote small elementary school under subsection (2) of this section if it is within eight miles by the nearest traveled road from another elementary school in the same school district unless there are physiographic conditions that make transportation to another school not feasible.�������� ����������
��������������Small High School Correction-ORS 327.077��A school may qualify as a small high school if:� (a) The school is in a school district that has an ADMw of less than 9,500; and� (b) The average daily membership in grades 9 through 12 for a high school teaching:� (A) Four grades is below 350.� (B) Three grades is below 267.�������� ����������
���������������Small High School Correction-ORS 327.077��A school may qualify as a small high school under this section only if:� (A) The location of the school has not changed since January 1, 1995;� (B) The school qualified as a small high school on July 23, 2009; and� (C) On or after October 23, 1999, and prior to July 23, 2009, the school was not part of a high school that divided or otherwise reorganized into two or more high schools in the same city.�������� ����������
���������������District Budget Considerations��What are the costs to budget and track most closely? ��Examples - PERS, PACE, CBA agreements, health insurance, transportation, maintenance and facilities, technology, board priorities, loans/outstanding indebtedness ����������� ����������
������������������������District Budget Considerations – Ending Fund Balance��Modified “Burn rate” - the rate at which the budget is being expended; �Usually expressed as a percent of the total budget (100 percent); �“Modified” for school districts as the expenditures are weighted in the first half of the fiscal year.��������������� ����������
�������������������������District Budget Considerations – Contingency Funds��Contingency funds are set aside for unexpected and unforeseen situations or emergencies. �A Board resolution is necessary to move funds from contingency into the appropriate budget category. �Expenditures may not exceed the amount of budgeted contingency. ����������������� ����������
�������������������������District Budget Considerations – Reserve Funds��Reserve funds are the unappropriated fund balances from prior budget years. �“Unappropriated fund” balances may not be used in the year they are budget.�Generally, reserve funds are 3-10 percent of an annual budget. �Unappropriated fund balances are useful in balancing a budget when revenue is declining in an upcoming year.��������������������� ����������
�������������������������State School Funding Issues��What is the 49/51 split and what is its impact?��The 49/51 split is how Oregon distributes State School Fund (SSF) dollars across the two years of each biennium: instead of giving districts 50% in Year 1 and 50% in Year 2, the state now gives 49% in the first year and 51% in the second year.��������������������� ����������
�������������������������State School Funding Issues – 49/51 Split��The current service level (CSL) is based on Year 2 funding so increasing Year 2’s share automatically raises the CSL for the next biennium. ��Governor Kotek’s office estimated that the shift adds about $217 million to the cost of the CSL for 2025-27��HB 2140 (2025) requires a 49/51 split in school funding each biennium (Passed the House 50-1; Passed the Senate 30-0)��������������������� ����������
�������������������������State School Funding Issues – Charter Schools (ORS 338.155)��The level of charter school funding depends upon the agreement with the sponsoring school district. ��Generally, charter schools have fewer funds for facilities, staffing and student supports. ��������������������� ����������
�������������������������State School Funding Issues – Charter Schools�� A school district shall contractually establish, with any public charter school that is sponsored by the board of the school district, payment for provision of educational services to the public charter school’s students. The payment shall equal an amount per weighted average daily membership (ADMw) of the public charter school that is at least equal to:� ��������������������� ����������
�������������������������State School Funding Issues – Charter Schools�� (a) Eighty percent of the amount of the school district’s General Purpose Grant per ADMw as calculated under ORS 327.013 for students who are enrolled in kindergarten through grade eight; and� (b) Ninety-five percent of the amount of the school district’s General Purpose Grant per ADMw as calculated under ORS 327.013 for students who are enrolled in grades 9 through 12.���������������������� ����������
State School Funding Issues - QEC
What is/was the Quality Education Commission (QEC)?
State School Funding Issues – Quality Education Model (QEM)
The American Institutes for Research (AIR) conducted a rigorous and thorough examination of Oregon’s K-12 funding system to estimate the cost of providing equal opportunity to receive an adequate education in all districts in Oregon. We estimate that Oregon would have needed to spend $22,210 per student from state and local sources, equivalent to an approximate $5,000 per-pupil or a total of $2.8 billion overall in additional spending, to achieve an adequate education in the 2022-23 school year. This would provide all districts with the resources predicted to be necessary for raising statewide education outcomes substantially.
State School Funding Issues - QEM
In the 2025-2027 biennium, lawmakers approved a 11% boost in public school funding, for a total of $11.3 billion. The model that underpins the Quality Education Commission’s annual report said they should have ponied up $2 billion more to achieve the high graduation rate that all key constituencies, from parents to teachers to the governor, want for the state’s 545,000 students.
Oregon Live, October 28, 2025
State School Funding Issues - QEM
But in a recent report, the Legislature’s financial analysts said schools are ultimately receiving the full $13.5 billion because they get another $2.2 billion from the corporate activities tax set up in 2019 to support public education. That money is targeted for initiatives aimed at improving both student academic outcomes and emotional health.
Oregon Live, November 13, 2025
Oregon Educational Collaborative��oregoneducationalcollaborative.com��oregoneducationalcollaborative@gmail.com���