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Panel backs bill to codify State School Fund distribution method used to prepare budgets
Summary
The subcommittee moved House Bill 2,140 to the full Ways and Means Committee with a due-pass recommendation. The measure codifies the distribution methodology used to calculate the tentative biannual budget for the State School Fund and clarifies how future cost projections should be calculated.
The Education Subcommittee advanced House Bill 2,140 to the full Ways and Means Committee with a due-pass recommendation after a work session that described technical changes to the State School Fund budgeting methodology.
Committee staff described HB 2140 as a measure that codifies the method the Department of Administrative Services (DAS) and the Legislative Fiscal Office (LFO) have used in practice to prepare the tentative biannual current-service-level budget for the State School Fund. The bill would formalize the distribution percentage used between the first and second year of the biennium and require that DAS and LFO project future cost calculations based on the amount distributed in the higher-funded year and by considering annual local revenue estimates. Committee materials identified the equalization formula in ORS 327.008 as the statutory framework that governs allocation of formula resources to school districts and ESDs.
Representative McLean, speaking in support, said the bill "gives stability and predictability to our schools" and acknowledged it as a technical but important step for budgeting. LFO staff told the committee that HB 2140 has no immediate fiscal impact on the 2025–27 State School Fund budget because DAS and LFO already used the described methodology when preparing the tentative budget, but it may affect future current-service-level calculations.
Committee action: Cochair O'Berese moved HB 2140 to the full committee with a due-pass recommendation. The roll-call vote on the motion recorded aye votes from Representative McLean, Representative Hudson, Representative Wright, Representative Youngker, Co Chair Ruiz, Senator Frederick, Senator Weber and Co Chair Solman. Motion carried.
Next steps: HB 2140 will be considered by the full Ways and Means Committee. If enacted, the change would codify the existing practice for distributing State School Fund resources across the biennium and for projecting future costs used in tentative budget calculations.
