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Legislative Fiscal Office explains Fund for Student Success, CAT allocations, and K–12/higher ed spending
Summary
Legislative Fiscal Office staff told the committee how the corporate activity tax (CAT) funds the Fund for Student Success and its subaccounts (SIA, SEIA, ELA), detailed statutory allocation percentages and listed notable 2025–27 allocations; LFO also gave an overview of state school fund composition, enrollment trends and higher education support.
Legislative Fiscal Office staff gave the committee a detailed look at how recent tax and budget policy supports education programs and where pressures have emerged.
Amanda (Legislative Fiscal Office) opened with a statewide budget overview: the 2025–27 biennial total funds budget is $138.9 billion and the general fund and lottery (discretionary) budget is roughly $39.1 billion. Amanda reiterated the September forecast showed a projected deficit for the biennium of $372.7 million as of Sept. 25.
Mandy Gibson (Legislative Fiscal Office) explained the Fund for Student Success, established by the Student Success Act (House Bill 3429) and funded by the corporate activity tax (CAT). She said, "Those represent new programs, new grant programs that came into Oregon since the installation of this funding," and summarized statutory flows: at least 50% of available CAT revenue is transferred to the Student Investment Account (SIA) for direct school grants, no more than 30% may go to the Statewide Education Initiatives Account (SEIA) and at least 20% to the Early Learning Account (ELA). In 2025–27 the LFO allocated $1.1 billion to the SIA, $618 million to the SEIA and $575 million to the ELA; LFO staff noted an additional $3.8 billion in cumulative investments since CAT implementation.
LFO staff also explained the state school fund composition: about 87% of the SSF is general fund, 7% is the transfer from the Fund for Student Success and smaller shares come from lottery and other funds; LFO showed that while total funding outlays to schools have grown, average daily membership (enrollment) is decreasing and student acuity/weights are rising. LFO staff offered to provide a breakdown and a flow chart showing how CAT dollars have been distributed to programs and grant lines.
Kim To summarized higher education support: $4.4 billion total funds for state support of higher education in 2025–27 distributed through the Higher Education Coordinating Commission to public universities and community colleges, with key line items that include university operations, capital and debt service and the Oregon Opportunity Grant; LFO noted increasing spending alongside declining enrollments and a pending budget note directing universities to report spending details.
Next steps: LFO will provide slide decks, post materials to OLIS, and circulate a flow sheet illustrating CAT flows and grant programs at the committee’s request.
