Kulongoski pushes to fix school funds.

Byline: David Steves The Register-Guard

SALEM - Democratic Gov. Ted Kulongoski laid out an 11th-hour proposal Wednesday to set minimum spending levels for education, from preschools to universities.

The proposal expanded on a similar idea by House Speaker Karen Minnis, R-Wood Village. Both purport to stabilize education funding by basing each biennial appropriation on a set percentage of state revenue, with education spending growth rates also set in law.

That contrasts with the status quo, in which legislators and the governor grapple every biennium over how much to allocate for education.

The two proposals try to create formulas that would determine how much money flows from state coffers to education in future years, starting in 2007.

What that would mean in actual dollar amounts remains unknown under either proposal until lawmakers and the Democratic governor decide on the much more immediate budget issue before them: how to apportion dollars for 2005-07.

Under both Minnis' and Kulongoski's proposals, those 2005-07 spending figures would provide a baseline for future education budgets.

With the current session headed into twilight, the politically split Legislature has agreed on an overall amount for the state budget, but has not agreed on how to allocate that amount to education and other major elements of state spending.

Kulongoski said it was important to dedicate a set portion of the general fund to education because Oregon must compete in an increasingly global economy that relies on highly trained and educated workers.

Minnis' proposal would affect only public schools. But Kulongoski said he wants to apply the same set-funding concept to all levels of education: pre-kindergarten, public schools, community colleges, universities and student aid.

"I share the speaker's commitment to creating stability in school funding, and her concepts put us on the right track to where Oregon needs to be in the future," he said. "But her plan also has limitations."

Those limitations, he said, are that it doesn't extend stability to all areas of education, and that it would set a ceiling instead of a floor for how much education funding could grow.

Kulongoski's proposal drew mostly reserved praise from most corners of the education establishment. However, its arrival on the Legislature's table so late in the session - most committees are shut down and leaders are trying to adjourn after six months in Salem - raised doubts about the likelihood that it would be enacted.

Minnis said she was heartened that Kulongoski wants stable education funding.

"However, I'm concerned that his proposal comes very late in the legislative session. It's July 6. If you want to up the ante, you need to have been at the table," she said.

Kulongoski's proposal would dedicate 61 percent of all general fund revenue to what he termed the state's "education enterprise" - from early education programs such as Head Start to the Oregon Health and Sciences University.

This portion of the budget would be considered a "floor," rather than a "ceiling," Kulongoski said, calling this a departure from Minnis' approach. The governor also wants to allow each educational area's appropriations to grow at a rate of at least 10 percent from one biennium to the next. If overall budget expansion allows for education spending growth beyond that 10 percent rate, the excess would go into two educational reserve accounts, with one-third going into an investment fund and two-thirds into a stability fund.

As proposed by Kulongoski, both the growth rate and the proportion of the general fund that would go to education would be based largely on historic trends, meaning that education spending wouldn't necessarily rise or fall from traditional levels, but would become more stable and predictable - one of the same selling points for the speaker's plan.

Minnis' proposal, besides just dealing with K-12 education, would dedicate to education 51 percent of personal income taxes - a subset of the overall general fund. Her proposal, which passed the House and has had one public hearing in the Senate, would set future education growth at 9 percent per biennium, with excess dollars going into a stability fund.

She questioned whether the governor was going too far, by locking up such a large portion of state spending for education.

"At first blush, I'm concerned about what his plan would mean for the funding of other important state programs such as combating the meth epidemic, providing a safety net of services for seniors and the disabled, and locking up dangerous felons to keep communities safe," she said.

Kulongoski said his proposed 61 percent for education is almost identical to the 60.4 percent that would go to education under the 2005-07 budget if the Legislature passed Kulongoski's proposed budget.

The governor said the competition for dollars among various programs "is nothing new" and is unlikely to be drastically altered by his proposal.

His plan also would:

Create a "Joint Boards of Education" to oversee policy and decide how to allocate dollars from the education investment fund.

Cap resident tuition increases at Oregon universities and community colleges at no more than the annual increase in the median family income.

Pool insurance for education workers throughout Oregon to save taxpayer dollars.

Consolidate education service districts in Oregon.

Allow Portland School District voters to decide whether to extend a temporary tax that's set to expire.