Governor John Kitzhaber
STABLE, EQUAL, ADEQUATE:
THE KITZHABER EDUCATION INITIATIVES
September 9, 1999
We all recognize the importance of education to our state’s future --
to our economy and to our society. That is why, in 1991, we enacted
the Education Act for the 21st Century and established new higher academic
standards for our schools. We adopted these high standards for a
reason -- because that is what will be demanded of our children by the
real world and the real economy into which they will be graduating. This is a world that we created and we have the responsibility to ensure
that our children have the skills and the knowledge not just to succeed,
but to excel.
And we are making progress toward our goal as demonstrated by the test
scores released last week. But those scores also show how far we
still have to go -- and if we are truly committed to giving all
of Oregon’s children the quality education they need and deserve, then
we must also commit to providing stable funding for our schools that is
adequate to meet this challenge.
I am here today to discuss how, together, we can accomplish that. My effort is built around three proposed constitutional amendments to address
the adequacy, equity and stability of school funding.
First is the issue of adequacy.
As you know, the debate over long-term, stable funding for our schools
is not a new one. The solution has generally been sought through
various efforts to overhaul our tax system. And I have viewed the
solution in those terms myself in the past. But, contrary to conventional
wisdom, I have come to see that tax reform and adequate school funding
are not one and the same thing.
Over the past year I have convened two distinguished panels -- chaired
by John Mitchell and Ron Timpe -- to examine Oregon’s tax structure. They raised concerns over the stability of the system during a recession
and over how the tax burden is distributed. They raised questions
about the impact of the current tax structure on our economic, social and
environmental objectives. But they did not find anything wrong with
our system’s ability to produce revenue. In other words, there is
nothing inherently inadequate about the current tax system. Adequacy
is not a function of tax structure, but rather a function of political
will.
I come to you today on the heels of a legislative session that had within
its grasp the means to fully fund schools -- and chose not to. This
is a legislative failure -- a failure of legislative leadership -- not
a failure of our tax system.
So while there are many valid reasons to restructure Oregon’s tax system
-- and while many of these reasons should be pursued -- restructuring the
tax system will not, in itself, produce adequate funding for our schools. Adequate funding will come only when the people of Oregon, through their
elected representatives, are willing to back their stated commitment to
the goals of the Education Act with the financial resources to achieve
them.
That is not what the recently adjourned legislature did. Rather,
it engaged in a deeply political debate around large numbers with virtually
no thoughtful discussion about the relationship between the funding level
and the ability to meet the quality educational goals enacted in 1991. There was no accountability.
And while it could be argued that the
Legislature met its constitutional requirement to provide a “uniform, common
system of schools”-- that is not good enough in 1999.
So my first ballot initiative will seek to amend the Oregon Constitution
to require the Legislature to provide funding adequate to meet the quality
education goals established by law; or, if it fails to do so, to outline
the reasons for this failure and the consequences in terms of meeting the
goals.
This amendment will focus the budget debate on the adequacy of the K-12
appropriation to achieve the goals of the Education Act and will force
the Legislature to be accountable for its appropriation.
This is not a K-12 “schools first” amendment. Rather it is a constitutional
mandate that will create real accountability around the question of adequate
school funding. And since the amendment speaks to “educational goals
established by law,” it opens the door for the introduction next session
of a statutory definition of the goals of the other parts of our education
continuum: community colleges and higher education.
In preparation for the 2001 Legislative Session, I will create, by Executive
Order, The Commission on Quality Education which will continue work
on the Quality Education Model. Prior to the session, this
Commission will produce a refined model and the estimated cost needed to
achieve the goals of the Education Act. This will serve as the Quality
Education Benchmark for both the Governor’s Recommended Budget and for
the legislative appropriation for K-12. It is my intention to introduce
legislation to establish this commission by law for future biennia and
to expand its charge to deal with post-secondary education as well.
My second ballot initiative will address the issue of equity.
As you know, last week I signed into law an option for districts to
raise a limited amount of money locally for their schools. I did
so with two reservations. First, that a local option might be viewed
as relieving the Legislature of its responsibility for school funding. Nothing could be farther from the truth -- and I want to assure you that
I would not have signed the local option bill had I not been planning to
propose a constitutional amendment that clarified the legislative responsibility
for providing adequate school funding. And I fully expect that those
districts planning to exercise this new local option take a lead role in
making sure that this constitutional amendment is approved.
My second concern with the local option was that it is not, in reality,
an option for many property-poor districts which would have to tax themselves
at a very high rate to generate the same amount of money per student that
property-rich districts could raise at a much lower rate.
To address this problem of equity, I will propose a second constitutional
amendment that directs the state to equalize, within limits, the tax effort
of property-poor districts. In other words for given tax effort --
say 25 cents per $1,000 of assessed value -- the Myrtle Creek School District
could raise the same amount per pupil as could the Beaverton School District.
While the amount per pupil and Measure Five caps which are in existing
law will remain in place, I will propose that local option elections for
additional school finance can be passed by a majority of those voting.
My third ballot initiative deals with the problem of stability -- with
the fact that we have no cushion against the effect on our schools of a
cyclical economy.
It is clear that when this state experiences its next recession -- and
eventually it will -- we will have no choice but to raise taxes to keep
our schools running, or to make deep cuts in the educational budget. It is equally clear that the commitment to educate our children to world
class standards cannot be abandoned because of economic circumstances.
We cannot afford to compromise the success of a generation of Oregon
children during the next recession. A well-capitalized, tightly-restricted
reserve fund would ensure stability in our school funding. We have
the resources in this economy to create such a fund, my tax committee endorsed
the concept, and it would be irresponsible not to proceed.
I will propose that the stabilization fund be established as a sub-account
within the Common School Fund to maximize investment earning opportunities
-- and that it be initially capitalized from three sources of revenue. First, I propose that a portion of the investment earnings from the Common
School Fund be obligated to the stabilization fund. This could potentially
amount to as much as $50 million per biennium.
Second, I propose directing the revenue stream for the Education Endowment
Fund, established in 1995, into the stability fund. This would mean
that 15 percent of all lottery proceeds -- approximately $80 million per
biennium -- would go into the new fund. These two sources of revenue alone
will provide at least $130 million per biennium toward school stabilization.
Adding to this revenue stream, I will also propose directing a portion
of any future surplus income tax revenue into the stability fund. I am still considering options on how to structure this part of the proposal,
but, over the last three biennia, corporate and individual kicker revenues
have exceeded $1 billion. I firmly believe that if Oregon voters
are given a reasonable proposal to save some portion of future surplus
revenues to ensure quality schools, they will approve it.
This constitutional measure will also ensure that the fund can only
be used to respond to revenue losses from a downturn in the economy and
that it is capped at a percentage of the total state budget.
Adequacy, equity and stability. This proposal, if adopted, will
fundamentally change how we develop and fund Oregon’s education budget. First, it will clarify the Legislature’s responsibility to provide adequate
funding for schools. It will ensure that the budget is built around
an effort to achieve specific quality education goals and will require
the school system to justify the dollars being spent against those goals. It will force the Legislature to be accountable for the relationship between
its education appropriation and the ability of Oregon students to achieve
the standards we have set for them.
Second, this proposal reflects the fact that we rely primarily on state
income taxes for school funding, and thus, prudence demands that we create
a savings account to stabilize revenue during future downturns in the economy.
Finally, this proposal creates the opportunity for some additional revenue
for schools -- and will help reconnect citizens with their schools -- through
a limited local option. With state support for property-poor districts,
it ensures that all districts have an equal opportunity to exercise this
option, thus maintaining the equal funding that the law and common sense
demands.
Between now and the middle of October I will develop the specific language
for these proposals and present them as ballot measures to the Secretary
of State.
In closing, I want to emphasize -- what most Oregonians already recognize:
that we have good schools in Oregon. Teachers, administrators, parents
and students are making admirable educational progress in a less than perfect
environment. And, even though we have not reached the goals we have set
for the year 2000, our schools are better for having set out to meet those
goals ... and we are making steady progress toward them.
What I am proposing today will ensure that we continue to make progress
and do not leave anyone behind. What I am proposing is the
next step in the evolution that our school system has been undergoing for
the past decade. I will start today to make the case to Oregonians
that these are reasonable and prudent proposals that will make our system
of school finance more stable, preserve its equity, and create the conditions
for a school funding debate based on what it takes to achieve, for all
Oregon students, the high standards on which we have pinned our future.
Thank you.
