Oregon’s education system is experiencing a significant financial crisis, with many school districts preparing for considerable budget deficits despite record funding levels. The State School Fund, which supports K-12 education, has increased by 50% over the past decade, even as student enrollment has risen by 30,000 students. A substantial boost from the 2019 corporate activity tax has added approximately $1.5 billion annually to public education. Nonetheless, districts such as Portland Public Schools and Salem-Keizer are bracing for deep financial shortfalls in the upcoming school year.
While Portland Public Schools, Reynolds, and Cottage Grove have already implemented cuts to manage their budgets, fourth graders are struggling with reading proficiency. This situation has sparked a debate among educators, legislators, and advocates about whether increased funding or greater accountability is the key to improving educational outcomes. A more pressing issue, however, is the need for greater transparency and honesty from the Oregon Legislature.
A critical concern is that public funds allocated for education are often spent on unfunded mandates imposed by lawmakers. These obligations divert resources away from the classroom, undermining efforts to enhance student learning. The failure to reinstate graduation requirements suspended in previous years has further eroded public confidence in the educational system. Legislators must recognize that no cash infusion can guarantee improved education if it is immediately siphoned off to cover unfunded mandates.
The financial burdens on school districts are compounded by the costs associated with pension obligations. Some districts are paying up to 28% of their payroll into pension funds to support benefits for retired employees. With potential increases in contributions expected by 2027, this issue remains a significant financial strain. Critics argue that the Legislature, predominantly controlled by Democrats, continues to prioritize financial support for unions over the immediate needs of schools.
A recent example of this is Senate Bill 489, which allows non-licensed educational workers to collect unemployment benefits over the summer. While this policy may benefit workers, it places additional financial pressure on schools, which must reimburse the unemployment fund without receiving additional funding to cover these costs. In 2025, Portland Public Schools paid $2.5 million in unemployment insurance—five times the amount from the previous year—contributing to a projected shortfall of $50 million for the 2026-2027 school year.
Legislators routinely pass mandates that lack adequate funding, including those requiring the addition of physical education and financial literacy classes. These mandates often come with significant financial implications, contrary to the claims made in their fiscal notes. As lawmakers prepare for the upcoming legislative session, they are expected to consider a bill that would require school districts to negotiate class sizes with teachers. Without the necessary resources to hire additional staff, this could lead to further difficulties.
To address these challenges, legislators could focus on creating a statewide salary schedule for teachers that adjusts according to location. This would provide districts with greater predictability regarding labor costs and clarify the funding needed to support education across the state. The recent teachers’ strike in Portland highlighted a disconnect between legislative funding and the actual financial needs of school districts.
In addition to improving salary structures, legislators must confront disparities in state funding for schools serving low-income students. An analysis by Julia Silverman from The Oregonian/OregonLive indicates that the state has underfunded higher-poverty districts by hundreds of millions of dollars. Addressing this issue may provoke resistance from wealthier districts, but it is crucial for achieving equity in education funding.
Lawmakers should also reevaluate the state’s funding cap for students with disabilities, which is currently limited to 11%. This cap fails to reflect the actual number of students requiring support, leaving many without the necessary resources. Finally, the “quality education model,” which estimates the funding needed to adequately prepare students for post-high school careers, needs an overhaul. Periodic updates have not aligned with the evolving needs of Oregon’s students, and the Joint Public Education Appropriations Committee’s proposal to engage an educational research group could provide valuable insights into the necessary funding levels.
While legislators are not solely to blame for the challenges facing Oregon’s education system, their decisions regarding funding and mandates significantly impact the effectiveness of schools. As they approach the 2026 legislative session, there is an opportunity to align educational funding with the actual needs of districts, thereby fostering an environment where both educators and students can thrive.
