ODE outlines State School Fund forecast, equalization and adjustments to current‑service calculations

The Oregon Department of Education presented an overview of the State School Fund and the department’s current-service-level (CSL) calculations to the Education Subcommittee on March 11 as the panel opened informational hearings on Senate Bill 5515 and Senate Bill 5516.

Mike Wilfong, administrator for school finance and facilities, said the State School Fund was created after Measure 5 and related property-tax changes in the early 1990s and now accounts for roughly 92 percent of the discretionary revenues in school districts’ general funds. “If we account for all funding, including federal funds, the State School Fund represents about 80 percent of total operations for school districts,” Wilfong said.

Wilfong and Vanessa Clark, State School Fund program manager, explained ODE’s approach to the CSL forecast. The department reported the 2023–25 legislatively adopted budget included about $10.2 billion for the State School Fund and that the CSL forecast for 2025–27 is approximately $11,360,000,000. ODE said most of the difference is in the general fund forecast and noted the forecast represents about a 10.2 percent increase over the adopted amount.

Staff described three technical adjustments that affected the CSL: using the second year of the biennium as the base distribution (about a 51/49 split), shortening the staffing trend look-back from 20 years to 10 years and incorporating a more current local revenue forecast. Wilfong said those changes narrowed prior gaps between ODE’s estimate and stakeholder expectations.

The presentation also covered statutory transfers and targeted grants that reduce the fund available for equalization, including high-cost disability, educator advancement, school facilities and transportation grants. Wilfong said transfers and carve-outs amounted to just over $113,000,000 per year in recent calculations; after transfers and local revenue adjustments ODE estimated there would be roughly $16,400,000,000 in the equalization calculation to allocate to districts (state and local combined) under the CSL assumptions.

Committee members asked district‑level questions. Senator Weber asked whether small coastal districts were included; Wilfong said they are included in the formula and that some districts receive no state allocation because local revenue exceeds the district’s formula need. Members also discussed historical context; Vanessa Clark noted that while the current equalization formula has been largely unchanged since the early 1990s, state–local shares have flipped since the pre‑Measure 5 era and that local revenue now behaves differently because of property‑tax caps.

No formal action was taken; ODE said it will return to continue discussion of the State School Fund as hearings on Senate Bill 5515 and Senate Bill 5516 proceed.