Governor Tina Kotek has introduced a proposal to increase the State School Fund (SSF) by approximately $515 million above the originally projected Current Service Level (CSL) for the 2025-27 biennium.

The State School Fund is the main source of state financing for K-12 public education. The CSL represents the amount required to maintain existing programs in the upcoming biennium.

“Nationwide, school districts are grappling with budget shortfalls due to the end of federal pandemic relief, declining enrollment, inflation-related cost increases, and other challenges,” Kotek said. “In light of these issues affecting Oregon’s students, educators, and administrators, I have committed to reassessing and updating our methods for funding public schools.”

“Our goal is to be a more reliable and accurate supporter of K-12 education throughout Oregon. This initiative is part of my broader priority to enhance educational outcomes, including improving early literacy, preventing learning loss, and increasing graduation rates. Ultimately, it’s about more than just allocating resources—it’s about achieving specific, meaningful outcomes.”

Representatives from the Governor’s Office, the Oregon Department of Education (ODE), and the Chief Financial Office (CFO) presented these details on July 14 to the legislative Joint Task Force on Statewide Educator Salary Schedules. This estimate will be revised before the 2025 legislative session.

To boost funding, the Governor has outlined several key steps. One significant change is the adjustment of the budget distribution from a 50/50 split to a 49/51 split over the two-year period. This shift means that school districts will receive 51% of their funds in the second year, which improves the CSL calculation for that year. This adjustment will also help districts manage rising costs in the second year of the biennium.

Another key adjustment involves revising the method for estimating compensation costs. Currently, the state uses a 20-year historical model, but the Governor is directing a switch to a 10-year model. This change will provide a more accurate reflection of recent compensation trends, leading to a substantial increase in funding. The updated model will also be applied in future budget cycles.

Finally, the proposal addresses the need to account for local property tax revenue fluctuations. Historically, changes in local property tax revenue during the second year of the biennium were not considered, affecting the accuracy of funding projections. The Governor has directed state agencies to include annual projections of local revenue to improve the precision of funding calculations.