Minnis Budget Plan

Yesterday, House Speaker Karen Minnis unveiled a plan to dedicate one-half of all future income tax receipts to fund schools, claiming it would stablize school funding.

Initial reviews from Democrats are poor. From the AFL-CIO:

Surprisingly, Minnis’ plan shifts all of the burden of funding the state’s share of schools to individual taxpayers, ignoring corporate tax receipts that, though much diminished, are expected to total $472 million in the next biennium.

Under Minnis’ plan, the legislature could continue its tax-cutting giveaways to corporate taxpayers without worrying about the argument that such giveaways will hurt schools. Also, by excluding corporate income taxes, she’s leaving $282 million out of her formula for funding schools that would otherwise be available if she applied her 50% proposal to corporate income taxes in the 2007-09 budget period.

House Democrats also rapped the Speaker’s plan as inadequate to meet the needs of schools in the upcoming budget period, since it would not take effect until 2007-09. “It does nothing about the immediate crisis in education funding,” said House Minority Leader Jeff Merkley.

Meanwhile, Governor Kulongoski proposed boosting school spending to $5.25 billion - up by $250 million over his initial budget proposal.

Discuss.

  • MinnisHater (unverified)
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    How inane. Budgeting based on a percentage of income, not on needs. Who knows how demographics will change, or costs will change, or other needs, such as "terrorism" or other infrastructure, will change.

    Government budgeting dumbed-down for a soundbite isn't going to have the right results. Ugh.

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    I'm no fan of Minnis, certainly--but the hard issue is one of stable, reliable funding. The key missing element for me is what half of individual income tax revenue has represented over the years, and what % is being currently budgeted.

    Maybe this idea is ultimately craven--I wouldn't put it past her--but at this stage I'm willing to listen to any creative idea that puts education funding on a reasonably knowable plane.

  • David Wright (unverified)
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    Interesting... did anybody else notice the "guaranteed 8% return" portion of this plan? Where have we heard that before.... and how well has that worked out...

    If we really want "stability" for school funding, we should find a more stable source for that funding than income taxes, which are inherently unstable. Setting aside 50% of an unstable revenue source is still going to be unstable.

    Meanwhile, isn't the state budget a large part of what we send legislators to Salem for in the first place? Time was, we used to expect our elected officials to actually make decisions on our behalf. These days, rather than actually doing their jobs they pass too much along to the electorate in the form of ballot measures, or try to come up with these trite shortcuts like fixed-percentage budgeting, so that they don't have to think or do the hard work.

  • Aaron (unverified)
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    Tax compliance on what laws are on the books would be a great starting point for stablizing the funding. It would help alot with the huge tax expenditures that are give away each session.

    The House Republicans version is a nicely watered down version of the House Democrats Strong Schools Plan with this plan comes this additional plan Examination of tax breaks and giveaways.

    This is what we get when the legislators and the Governor have two different visions(budget plans, call what you want too) with the number 1 and 2 issues in Oregon: Education and stable funding for all services provided by the state.

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    To put this plan in perspective for folks, here is what 50% of personal income taxes (keep in mind this plan excludes corporate taxes) would mean for the budget currently being constructed by the Joint Ways and Means Committee. 50% of personal income taxes, as stated by Minnis in her press conference yesterday, is $5.012 billion. Her plan caps education spending increases to 8%, which means this budget would top out at approximately $5.29 billion. The entire education community agrees - including COSA and OSBA who decided for some unknown rational to stand behind Minnis at yesterday's press conference and endorse her plan - a "no cuts" school budget for 05-07 would be $5.4 billion. In other words this plan guarantees an even shorter school year and even larger class sizes. In fact, the only thing this plan guarantees long term is mediocre schools forever.

  • ron ledbury (unverified)
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    We look more and more like a populist regime from Argentina each and every day. Why don't we just create Oregon's own currency rather than beating around the bush with bonds and rainy day funds and such, at least that way the market could determine the currency's worth rather than having a small group of bond rating thugs declare what that value is.

    (More whining from the Wild_Economist is here.)

  • LT (unverified)
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    Some basic information: There is as yet no bill # for the Speaker's proposal, and some legislators/ staff say it is not a serious proposal until there is a bill #.

    Since this is regular session rather than the interim when they tried to push thru the bucket plan, there would be public hearings (Education? Ways and Means?) before it hit the House floor. Yes I know there is a House Republican majority. I also know there are 55 GOP US Senators, but Gordon Smith and 6 moderates defeated the planned Medicaid cuts because they understood that it takes majority votes on EACH bill, not just "we're in charge therefore all our stuff goes through".

    Sen. A. Bates had a great quote in the Oregonian about debating budgets, "It doesn't give an opportunity for us to have the debate," said Sen. Alan Bates, D-Ashland. "Right now it is painful and difficult, but that debate has to happen. Otherwise, we may as well go home."

    None of the Republican staffers I talked with were willing to say that their state rep. was an avid supporter of this proposal. So is there more support for this proposal than the folks on the stage with Minnis yesterday?

    Sooner or later, this would have to come to an up or down vote. If the members who won close elections heard from lots of people on this issue (esp. parents of school aged kids and those young folks who just voted for the first time in the last election or are maybe 17 now but will turn 18 in time to vote in 2006 ) does anyone really know they would support Minnis on this issue? Minnis won re-election by a little over 1500 votes, and the GOP lost seats in the last election. Has she yet come to terms with not being as powerful as she was in the last session?

    Not to mention that it obligates future legislatures but doesn't say anything about the 2005 budget. And does the presence of the OSBA and COSA lobbyists on the stage with Minnis yesterday mean that if administrators or school board members (or people who are going to be on the ballot and may be elected school board members in a few months)were contacted randomly, they would all say they are willing to support it?

    If the price of bus fuel remains high, are districts supposed to fire staff to pay fuel bills, or ask parents to drive their kids to school?

    It will be interesting to see if Minnis is serious enough about this to have a bill # in the near future (in the past she hasn't wanted to put her views in print for the public to read outside of press releases)and how many members come out publicly saying they strongly support the Speaker's plan.

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    I've had some questions via e-mail regarding who OSBA and COSA are.

    OSBA = Oregon School Boards Association COSA = Confederation of Oregon School Administrators

    If you are now asking yourself, "you mean advocates for the school boards and school administrators publicly endorsed the Minnis plan that locks in mediocrity for our schools?" The answer to your question is simply "yes".

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    OSBA and COSA, the school "advocate" geniuses who support Republican leg candidates running on "No New Tax" platforms, and then are surprised when schools aren't adequately funded.

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    BTW: Love seeing LT and Jon Isaacs on the same page. So, maybe OSBA and COSA have at least achieved something.

  • Rorovitz (unverified)
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    On COSA and OSBA, they are totally willing to make any deals necessary to keep the teachers and other school employees out of a purchasing pool for health care.

    Right now OSBA and COSA make a fortune on being the go-between's on providing health insurance to school districts. A purchasing pool would cut a huge amount of revenue for them.

    Any one ever notice OSBA lobbyist John Marshall driving a Mercedes SUV?

    Let's be honest about their motivations. I don't think they really advocate for education.

  • COSA_BLOSA (unverified)
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    On COSA and OSBA, they are totally willing to make any deals necessary to keep the teachers and other school employees out of a purchasing pool for health care.

    To recap, students, teachers, and parents stand with House and Senate Democrats. Bureaucrats opposed to saving money schools stand with the Minnis and the Republicans.

    And we're the party of gov. waste??

  • COSA_BLOSA (unverified)
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    On COSA and OSBA, they are totally willing to make any deals necessary to keep the teachers and other school employees out of a purchasing pool for health care.

    To recap, students, teachers, and parents stand with House and Senate Democrats. Bureaucrats opposed to saving money schools stand with the Minnis and the Republicans.

    And we're the party of gov. waste??

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    Jon said:

    The entire education community agrees... a "no cuts" school budget for 05-07 would be $5.4 Billion."

    It's important to remember what $5.4 Billion actually means - no cut from the state's pitifully inadequate funding from the last biennium. For Portland, which is facing the loss of its local school property tax levy as well as the County income tax - it would take more than $6 Billion to have no cuts.

  • David Wynde (unverified)
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    I'm not sure what the basis was for "OSBA support" for the Minnis plan. In recent months we have seen several examples of OSBA staff taking positions on issues that are not supported, in my opinion, by the majority of school boards on Oregon, and certainly not by the Portland School Board.

    Examples include endorsement of several R candidates in November, more recent statement that less than $5.4 billion was OK, now this apparent support for a plan to permanently fail to fund education properly.

    Locking in inadequacy is madness.

  • LT (unverified)
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    People who are concerned by the OSBA and COSA endorsements should contact local board members, esp. those up for re-election. And if there is a chance to ask local administrators if they support the COSA stand, so much the better. A friend of mine and her husband once owned a small business. That didn't mean that NFIB spoke for them on all issues. Members should make it clear when their organizational leaders/ public statements don't speak for them.

    I recall in the mid-1980s when the State Democratic Central Committee ( by a close vote) passed a resolution claiming to put on record "what all Democrats believe". Except that Sen. Pres. Kitzhaber was on the opposite side of it. At the next meeting, the Douglas County Democrats passed a resolution breaking with the State Cent. Comm. resolution and sticking up for their guy Kitzhaber. The world didn't end with that independent statement, and it sure didn't hurt Kitzhaber's political career!

    As I understand the origins of the terms progressive and populist, they meant a system open to the ordinary person and against big anything: big business, big unions, and a great story from history where Granges in the NW battled powerful Grange officials from the Midwest.

    OEA doesn't speak for all teachers (and is sometimes skittish about explaining some of their endorsements).

    My guess is that no lobbying group polls the entire membership. They might poll a board of directors or have a roomful of people at a representative assembly vote on something. But poll the statewide membership? I doubt it.

    So this is something people can do locally--ask "Do you support the Minnis school budget plan before even seeing it in bill form?".

    Seems to me a school board candidate afraid to answer that question might be a school board candidate not deserving election, whatever other good points they have.

  • Marcello (unverified)
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    LT,

    I am a school board candidate, and if the people at the OSBA are supporting a cap in the future increases in education funding below 4% per year when: 1) PERS and health care costs are most likely going to increase in double digits per year, and 2) there is a 40% gap to bridge between the current funding for K-12 and the quality education model (which the OSBA claims to support), they are flunking math big time. There are many worthy proposals being considered in Salem this session, but this is not one of them.

  • eric carlson (unverified)
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    I am all for the constant stream of funding that Minnis is proposing, however, if this amount is going to be less than it has been on average in the last 10 years, what is the point. I even think that the 5.2 billion that is being proposed is too little, too late. If Oregon wants to be proud of their schools, they have to take action. A bump from 5 billion to 5.2 billion is crap, why not 6 billion. This is our future we are funding, what kind of people do you want to take care of you when you are older? Under-educated, under-privileged kids, yeah right. We want quality, and that can only come with quality spending, if this really is a priority, we have to make it one.

    -eric Revolutionary

  • Ruth Adkins (unverified)
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    Don't forget the Legislature's own Quality Education Model puts the pricetag of a good education for all Oregon kids at $7.1 billion. This is the investment it will take to give every kid the opportunity for success in the future.

    Why do the Republicans hate Oregon?

  • William Neuhauser (unverified)
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    While flawed in the specifics, the Minnis school funding proposal has the potential for a big openning in the funding debate. If we look at the core principles behind what she offered, we may be able to forge a better solution that would match the principles and thus offer the opportunity for bipartisanship.

    Specifically, I view the key principles in her proposal as:

    • get funding out of the hands of the legislature, which is unable to do it
    • make it highly (if not completely) predicitable
    • fix the amount based on economics of the state

    The Minnis proposal doesn't move it far enough out of the hands of the legislature and ties the amount to the wrong economic indicator.

    We need to separate the funding mechanism from the amount of funding.

    We should establish a funding mechanism in the Oregon constitution, maybe somthing like this:

    (1) Fix the spending as a % of state GSP (Gross State Product) -- see below. 

    (2) Make the % based on a two- or three-year trailing average of GSP and/or establish a reserve fund.  This is because the amount shouldn't go up and down wildly based on economic conditions independent of the number of students -- their educational needs are the same.  Also because that makes it predictiable for all involved. 

    (3) Set the date of when the next year's budget is determined such that we have the GDP for the previous year and are far enough in advance of the next school year for budgeting.

    (4) Subtract any federal dollars to determine the Oregon tax amount needed to achieve full funding.

    (5) If the legislature fails to provide adequate funding (from whatever mix of income, property, sales, etc. taxes), then an automatic surtax is applied to income tax.

    With this funding mechanism agreed, then we can go on to the hard state dialogue: Determine the amount of funding required to achieve our desired goals. Presumably we should just tie the amount to the Quality Education Model already in the constution and move on. But given the resistance to funding at that level already, perhaps we have to start a new dialogue: Oregonians consistently say that they want an education system among the very best in the nation - so look not at US average spending but at the spending of top state systems. And work out what the amount should be. Then we can have a real dialogue about whether we really do want a top system or an average system or a below-average sysetm. (Obviously this is the hard part -- but appropriately part of the political arena.)

    But lets separate mechanism from amount so we can focus on the true issue: what kind of educational system are we willing to pay for.

  • Tom Civiletti (unverified)
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    No single tax or mix of taxes can guarantee consistent government revenue. Property tax comes closest, but we have seen what over reliance on such a wealth tax generates [Measures 5 and 47].

    To have a firm source of funding for schools, Oregon either must be able to do deficit spending, or there must be a surplus maintained. Neither can be done without constitutional change.

    Of course, sufficient funding will take more. It will take the public will to set tax rates that will collect enough to fund good education. I don't see us being close to that. The voters turn down tax proposals and elect legislators who believe that "government must live within its means," which translates to "I will not support any tax increases."

    What would it take to change this? Enough people in leadership roles [business, elected officials, news media, celebrities] talking forthrightly about the importance of quality education and our current spending's inability to provide it.

  • ron ledbury (unverified)
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    Hey folks -- we already have our rainy day fund and alternative funding mechanism . . . it is called Pension Obligation Bonds . . and it is spent quite outside of the normal parameters for appropriations, it is thus sufficiently outside the control of the legislature to be fully arbitrary and capriciously used as certain folks find politically convenient.

    I hope ya'll haven't been stuck in some cave somewhere for the last twenty years.

  • Gullyborg (unverified)
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    <h2>This is why we need to implement HJR 9 and require the legislature to spend the money for every mandate they hand down to Oregon's schools. But no one is talking about HJR 9 because the Minnis plan is dominating the discussion.</h2>
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