BY LINDA BAKER
The move to reform Oregon’s K-12 and higher education system got another boost during the 2012 legislative session, with the passage of bills giving the Early Learning Council oversight over early childhood services, creating school district achievement compacts and establishing a special committee to investigate university governance. But as the hard work of actually restructuring the system moves forward, a couple of broader questions loom large: How much can education reform accomplish without a simultaneous boost in financing? And in the absence of revenue reform, a subject much lamented but yet to be acted upon, where will that financing come from?
For a few answers, I turned to the Oregon Business Council and Associated Oregon Industries, two groups that were instrumental in rallying businesses to help pass education reforms in the past year. Their brief responses point to a business community determined to press forward with outcomes and efficiency-based reforms while also moving in closer alignment with educator calls to grow public funding.
“On revenue for education, the best source is a strong, healthy economy,” said Duncan Wyse, president of the Oregon Business Council. “And as the economy grows, we can expect more revenue in next biennium. So as we look ahead, how we allocate those additional resources will be critically important.”
Wyse noted that a key part of Gov. John Kitzhaber’s education strategy is to reprioritize state government by taking “bold action to stem health care and correction costs,” then funneling a portion of those savings into education. As for broader revenue reforms such as kicker reform, “business groups are supportive of more fundamental change,” Wyse said. “It’s really a question of finding a path politically at the ballot. That’s the hard part.”
Ideally, revenue reform would support education reform, Wyse said. “But I don’t think work on education needs to be fundamentally dependent on revenue reform.” The achievement compacts and other school reform initiatives focus on wringing “the highest education value from public dollars,” Wyse said. “We've got to move forward on education regardless.”
J.L. Wilson, AOI’s vice president of government affairs, said the group “recognizes the seriousness of funding education reforms.”
“But you can get [funding] two ways,” Wilson said. “You can increase the tax allocation drivers and also address the cost drivers on the education side, such as addressing PERS. The business community would want to see efficiencies and freed up capital, and then we would be open to the revenue side too.”
Wilson noted that AOI “was fully on board” with SJR 202, a kicker reform effort that would have stabilized funding to schools when “the economy goes south.” The proposal, which died this session, was supported by the business community and the teachers union, Wilson said. “Business and labor agreeing this is the right way to go. You haven’t traditionally seen that type of agreement.”
That’s the business take on funding for education reform. Next I turned to the governor’s office, where Ben Cannon, Kitzhaber’s education adviser, was blunt about the challenges of meeting the state’s lofty education goals. Signed into law last summer, Oregon’s 40-40-20 plan requires 40 percent of all adults to have a college degree, 40 percent to earn an associate’s degree and 20 percent to have a high school diploma—all by 2025.
“There’s not enough money in the system to fund 40-40-20,” Cannon says.
Fulfilling that mandate would require sending about 650,000 more Oregonians back to school, about one third of the adult population. In 2010, a report from the Quality Education Commission noted that the current level of school funding provided only about 70 percent of the needed investment for 90 percent of Oregon students to reach state standards. And that was before state standards included a mandatory high school graduation rate of 100 percent by 2025 — another goal of the Kitzhaber administration. The average graduation rate today is about 65 percent.
Echoing Wyse — and the dictates of the Oregon Business Plan — Cannon said the governor’s strategy is to align existing resources with clear educational outcomes, then “bend the cost curve” to rein in health care and corrections spending. That reprioritization is already under way, said Cannon, noting that a projected $100 million in savings generated by health care transformation made it possible to maintain the school funding allocation for the current biennium.
As for more ambitious revenue reform, that may be the next step. "School board members are very sensitive to the concerns of voters that public entities always ask for more money and that taxpayers are tired of hearing of that," said Lonn Hoklin, a spokesperson for the Oregon School Boards Association. "We have interpreted that to mean when we get structural reforms in place and have the means to show achievement is improving and plans to educate children to take the jobs of the new century. When that is apparent to everyone, then there can be more serious and productive conversation about revenue."
The first part of that compact with the public — instituting structural reforms — is well under way. As the economy shows signs of improving, perhaps now is the time to fulfill the next part of the agreement and get funding for education back on the table.
Linda Baker is managing editor of Oregon Business.