MD 103 990

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EA 006 914

A Report of the Committee on Equal EducationalOpport unity.Oregon State Legislature, Salem. Committee on EqualEducational Opportunity.Dec 7430p.Committee on Equal Educational Opportunity, Room 221,Public Service Building, Salem, Oregon 97310

NF -$0.76 HC-$1.95 PLUS POSTAGE*Educational Finance; Educational Legislation;Elementary Secondary Education; *Equalization Aid;*Finance Reform; School Support; *State Aid; *StateLegislation; State School District Relationship;Tables (Data); Tax Allocation; Tax EffortCommittee on Equal Educational Opportunity; LocalGuaranteed Yield Program; *Oregon

This report examines the current school financesystem in Ctegon and recommends changes to make the system moreequitable and less subject to variations in local property wealth.After briefly describing the inequities of the present system, mostof the report discusses the committee's legislative recommendationsand their probable impact. The committee urged adoption of a packageof 20 recommendations, containing three main proposals. These threeproposals were adoption of a new state school aid distribution systemcalled the Local Guaranteed Yield Program, estabiishment of threeschool finance districts to provide equalization on a regional basis,and provision of state grants to school districts for children withspecial learning problems. Included in the report are several tablesthat summarize the predicted financial impact of the committee's planon each of 38 Oregon school districts for the 1973-74 and 1975-76school years. (JG)

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4. Introduction

6. Oregon's CurrentSchool Finance System

9. A New Proposal

14. Impact

17. Committee Recommendations

21. Appendix

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Co Chair menSon leon HoeRep Richard Eyrharm

Legislative MembersRep Earl BhittleniilletSeri Wallace CarsonRep Howard CherrySeri Vern CookSect Edward FadeleyRep Staffwd Hansel,Rep Robert MarxRep Larry PerryRep Mary RiekeSen Jack RipperRep. Paul Walden

Public MembersJames Anderson

Associated Oregon IndustriesWilliam Bade:Chuck Clemons

Portland School DistrictJames O. Brooks

AFL CIOAI Flow!

Association of OregonCounties

Jerry FullerNational Advisory Councilon Equal EducationalOpportunity

Steve KenneyOregon EducationAssociation

Annabel KitzhaberLeague of Women Voters

John LobdellDepartment of Revenue

Tom PaytantE,,gene School District

Robert WhittakerOregon School BoarlsA,,sociation

Executive DirectorKen Johnson

State of OregonE ecu t lye Department

Study CoordinatorL.avvrence Pierce

ConsultantsW.iner

Go!htneKact

Committee Clerk

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Clearly one of the mostdifficult challenges facingOregon legislators in the 1975legislative session is to reformthe way public schools arefinanced.

In a state dedicated to thedemocratic principles ofopenness and equality ofopportunity, it is ironic thateducational services aredistributed in greater quantityand quality to pupils who livein high- property -valuecommunities, than to childrenin lowproperty-value schooldistricts, and to those in ouroldest, deteriorating centralcities.

Most Oregonians take pride inthe progressive legislationpassed to protect the oceanbeaches and our environment,and to plan for the orderlydevelopment of our cities andopen spaces. However, neitherthe legislature nor the voters ofOregon have found a way toprovide a "uniform andgeneral" system of education asrequired by the state'sconstitution.After years of pursuing a statego 0 of "equalization" infinancing public schools, schooldistricts rich in property wealthcharacteristically tax themselvesat low rates, yet, they canprovide expensive programs.Districts poor in propertywealth usually tax themselvesmuch harder, yet they raise lessmoney per pupil.And in a state where publicelementary and secondaryeducation is such a majorgovernmental activity, it isperplexing that so few peopleunderstand how schools arefinanced.

Recent attempts to find anequitable way of financingOregon's public schools havefloundered. In part, this isbecause it has been difficult forpeople to agree on what equitymeans. Some have focused onthe fairness of how money israised for schools. Others havelooked at the way that moneyis distributed. Still others have

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Disagreement over the goals ofequal opportunity islegitimate concern of allcitizens Unfortunately. thesephoosophical (14ferences havehad less to do with the failureto rind .t tor way of financingschools than with the rliirrOWoilceritS of v4friOUS specialinterests

Fonwtten by those demandingspecial treatment have been theparents at children inproperty Poor SetiO01 drStriCtSwho must bear disnrobottronally high school tax burdensand be satisfied with inferioreducational programs.Forgotten also have been thechildren with learninghandicaps who have notreceived the special programsneeded to provide them equaleducational opportunities. Thetime ti.es come or Oregon to setaside these local interests, andstress forenrost an equalfiticerfronal opportunity forevt;cy in the state. Wemost diivelop a workable andunderstandable system offinancing public schools. It''lust elithinate the advantagesor local wealth while takinginto account the special.41111%10(mi1 needs of somehotpt) mid the preference ofsome coi.irriumtle.s tor superior,'dui ationso prorii,rens

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etfucation, and career educalion. At the same time thecommittee staff developed acomputer simulation which willpermit legislators and educatorsto quickly analyze the effectsof proposals on every one ofOregon's 339 school districts.During the fall, the committeeconsidered a variety of schoolfinance plans designed toprovide all Oregon childrenwith an equal educationalopportunity. After long andcareful deliberation thecommittee has prepared anumber of proposals forconsideration by the 1975legislature. The purpose of thisreport is to explain theserecommendations and theirimpact on Oregon schooldistricts.The proposals presented hererequire only a few changes fromthe current system. Yet, theyequalize the ability of schooldistricts to finance theirschools. At the same timedistricts are allowed to choosethe amount of money theywant to spend to educate theirchildren, and the proposalsprovide additional funds forchildren with special learningneeds.

The recommendations do notrequire a substantial increase ineither state or local funds. Theyare designed to create a fair,understandable, and durablescnool finance program whichwill guarantee an equaleducational opportunity forevery child in Oregon.To meet these objectives theCommittee on Equz..1Educational Opourtunityrecommends that thelegislature'1. Adopt a new sate school aiddistribution systc.111 called theLocal Guaranteed YieldProgram.2 Establish three schoolfinance districts to provideeqkj.liration on regionaltract:.:s. Prrtvide state grants toschool distric ts for childrenwith special lear ninq problems.

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the irlited States, publicprimary and wcondarytiducation is the responsthilttyof the staws Most statr!including Oregon, delegatemuch of the operation'financing of schools to locllschool districts. The role ofstates in public educJtion hasbeen to set programretiu;rement5 for schools and

ide funds to insure thatdistricts offer adequate

educational programs.

The school finance system inOregon has come under attackbecause the state has notendowed local school districtswith an equal ability to raiserevenues. Since most localschool revenues are raised byproperty taxes, the propertywealth of a school districtdetermines its ability to financeeducational programs. In197174 McKenzie No. 68, aproperty rich district, raisedfrom all sources $1,973.46 perweighted pupil at a $14.95school tax rate, while HermistonNo. 8, a property-poor district,raised only $1,167.14 at a$16.56 school tax rate. So, adistrict with high propertyvalue requires a lower tax ratethan a propertypoor district toraise the same amount ofmoney. The effect is to denychildren living in property-poordistricts an equal educationalopportunity.This would not be an insolubleproblem if the state usedits resources to reduce thewealth discrepancies betweenlocal school districts. However,under the current state schoolfinance formula, thesedisparities are noteliminated, and in somecases they are increased.

Basic School Support FundIn 1973.74 the state provided24.4% of the revenue sources ofpublic elementary andsecondary schools in Oregon.This percentage of state supportof schools is among the lowestin the nation. Ninety fourpercent of this state school aidwas distributed to school

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distf q.ts through the BasicS( hoof Support Flint! (BSSFthe remaining 6"5 wasdisti ted throtiO small,

isceIlarwous accounts.

According to Oregon statutes,the purpose of the BSSF is to"equalize educationalopportunities ,ind conserve and

irove the standard of publicelementary and Secondaryeducation."' However, the fundes,sentialIv distributes most ofthe' money to all school districtson a pet MOM basis withoutrecord to wealth. (This isknown as a flat grant program.)Only mcdest provisions existfor eutralitation.In actual practice, the BSSF isdistributed to school districtsfrrr ne'r pupil hat grants,transportation. equalization,and changes in enrollment. Theamoiints distributed for eachpurpose and the relationshipsamong them are shown in thefollowing

The Basic SchoolSupport Fund 197374

%Ilion% Percentia Unities of Total

A I tallq,ltilCI' ants

Account(20 times A Hi

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The leocedure for determiningmuch rnOttny a district

receives frrlin the state isextremely complicated InSi r ple ter mc thi' Stdtti first..st at)! ishos how much should be

on hit(f'S CIC/Caf Ion.Iitc basic program or the

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Next the legislatureappropriates an amount of statemoney for primary andsecondary schools. From thistotal amount the StateDepartment of Educationdeducts the amount required topartially reimburse schooldistricts for their transportationcosts. Twenty percent is thenset aside for equalization (themL. ney that is given to low-property wealth districts tohelp them support their publicschools). The remainder, about75% of the total, is distributedto districts on an equal perpupil basis (as flat grants).The small amount available forequalization is used to bringevery district up to the statefoundation level, which was$682.23 per student in197374. The followingillustrates how the stateequalization grant to eachdistrict is determined:A district's equalization grantequalsThe basic program times thenumber of studentsminusAmount received in flat grantsminusReouired tax rate times value ofdistrict's propertyminusOther miscellaneous receipts.Though the purpose of theBSSF is to equalize educationalopportunity, less than 20% ofthe BSSF is now available toequalize up to the foundationlevel of $682.23. The fact thatthis foundation level is less thanis spent in the lowest spendingdistrict in the state ($825). andconsiderably below the stateaverage ($1058), unveils afundamental shortcoming ofthe foundation program.Because there is no equalizationabove the foundation level, itdoes not provide that alldistricts can have the sameoffering if they have the sametax effort. In fact, rich districtscan generate more money tospend per pupil than pooratstricts at every tax rite abovethe minimum required level.

Intermediate EducationDistrictsIn addition to th' equalitationaucount of the BSSF, someequallidtion of local schooldistrict revenues occurs throughthe Iritermediate E (locationDistrict levy The state iscllvrele'(1 into 29 IntermediateEducation Districts Thesedistr fasically follow countyImes, and exist in thosecounties lacking county wide.;chool districts IE D's May aSktheir voters to approve anqualitation levy If approved,the receipts are' distributed toschool districts within each IEDoil tier student bassThus, an IED equalitation levyta%es all the property in the!Er and distributes thefi'vcilut'S Where the ChildtPti art'.This levy provides a significantproportion of the budget foronly feW diStrictS, Who& areornerally small and poor. I1% thiswdy .t Ileitis f eW districtsprovde more adequateeducational programs. 1EDeqahlatio tails to insure thestate goal of equalization Itt atleast three vyays. however First,only a small portion of thefunds raised y 1E D's isredistributed fromproperty rich districts toproperty poor districts. Second,even though wealth variessubstantially between I ED'S,the system does not permitredistribution among lED's.Consequently, under the stateformula for equalization, somedistricts that receive stateequalization money are, at thesame time, contributingdistricts under the IEDequalization formula. Theopposite also holds true. Third,the amount of equalization thatcan be accomplished within anIED depends on the size of theIED levy. Because of thedifferences in total tax basesanti voter acceptanc the levycan be both important in someI E D's and trivial in others.

In summary, the burden forSiatntort Mt) public elementaryand secondary schools in

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Oregon falls most heavily ortthe focal property owner Thestate contributes less thanthirty percent of the costs ofpublic education, anddistributes most of that money00 a per pupil basis. The smallamount remaining for stateequalization, along with theIED equalization levy, does noteliminate the great variation inlocal school districts' abilities tosupport schools, The result isthat under the current system,taxpayers in property richdistricts can tax themselves atbelow average tax rates andhave expensive educationalprograms, while taxpayers inproperty poor districts must taxthemselves at above averagerates for inferior educationalprograms. Obviously, the stategoal of equal educationalopportunity is not met underthe current system of financingschools in Oregon.

In developing proposals for amew wimol 'mance system, thecomittee agreed that the planqiciiifo meet several goals. First,

new system should insure thatevery child in the state receivesan adequate and equaleducational opportunity, andthat the quality of education isnot determined by the wealthof local school districts butonly the wealth of the state as awholeSecond, control overeducational decisions shouldremain at the local level. Localcontrol is important to mostOregonians. We believe thatdistricts should be free tochoose how much they want tospend on education and how tospend that money. Under thepresent system only thewealthy districts truly havelocal control, because only theycan afford to choose among avariety of options, Poordistricts have to tax themselvesto the limit simply to meetminimum state standards. Byeliminating the advantages ofwealth, every district wouldhave the same ability to chooseits school program.

Third, a new school financesystem should provide fundsbased on educational need aswell as fiscal ability. Distrttswith concentrations ofhandicapped or disadvantagedchildren who require moreexpensive programs shouldreceive additional state schoolsupportFinally, the committee believesa nevi school finance planshould be simple to understand.Because of the diversity ofOregon school districts, a fairand reasonable school financeplan will have somecomplications. But, theprogram rt*cornmenqed by thecommittee is built upon severalconcepts that can beunderstood by almost everyone.To accomplish these four goals,th'' Committee on EqualEducational Opportunity hasdeveloped a paCkage of 20recommendations, The three

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PrOP(PulIS tont,tiried rrtrf Item. ;recommendations should

ytt*V1it'ff as a simile plan forreforming Oregon's system ofeichooi finance Elimination ofany of these' could make theproeirJ tithe' fItIqUitable orunacceptable to some schooldistricts,

The three main proposalsInd Mie a local guaranteedyield plan, the establishment of!regional school financeequalization districts; and stategrants to school districts forspecial education,compensatory education,occupational education,transportation, and necessarysmall schools, We believe thecombination of recommen,ihstions and proposals outlinedin this report will provide anequitable! and financially soundsystem of school finance inOregon

A Local Guaranteed YieldProgramThe' kr.% element in this packageof refo,(n proposals is a newmt:-thod for distributing stateequalization aid to schooldistricts The local guaranteede fetid program we are feCOM,(7011dIflq would IfISUre thatdistricts exerting the same taxeffort would have aporoxi

atelv the same number ofdollars to spend per child, Sucha program would reduceeencliture inequities resultingfrom variations in the wealth ofschool districts It wouldInCtf,aftts local control bypermitt ing all districts tochoose their own level of SC11001expenditures and correspondingtax rate'

From the point of view of theloc al school district, this schoolfinance program is very simple.The local guaranteed yield planqtJaratitet'S for every tax rate acorresponding level of revenue.So, a school districi selects howmuch it wants to spend perstudent and the tax rate thatgoes with that level ofspendable dollars If the districtdoes not have enough taxableotopertv wealth to raise the

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gtiafartttleti MM./tlt from itsschool tax fate, the' state makesup the dif ference.

To institute this plan rcquiresseveral decisions by state policymakers. A local guaranteedyield schedule must beestablished which insures thatthe children of the state receivea "uniform and general"education, and at the same timedoes not require more statemoney than is available forpublic elementary andsecondary education. To insurethat every child gets anadequate education, the statemay want to require aminimum tax effort in order fora district to be eligible toparticipate-in the program.The state may want to set amaximum tax rate beyondwhich there is no state guaran-tee to protect the state treasuryand discourage districts fromover education tothe neglect of other localservices. Finally, the state maywant to encourage lowspendingdistricts to spend more perstudent, by increasing the levelof guarantee at lower tax levels.To illustrate how the localguaranteed yield programwould operate, the committeestaff has designed a program for1975.76 and simulated itsresults for Oregon's 339 schooldistricts. The plan assumes thatthe state will provide about30% of the costs of educationin 1975.76, and that thereshould be a minimumexpenditure level of $980 perstudent required for a districtto participate in the program. Italso. provides that districtstaxing below $16 per 51000true cash value WO areguaranteed more per dollar oflocal school tax levied thanthose taxing above that rate,

More specifically, to participatein the program, a unified distract must levy a school tax of atleast $10 per $1000 of localtaxable property. At this SWrate the state guarantees receipts

-of $980 for each elementarystudent and S1274 for each

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the regional tquithzdtton taxand the local school tax. Forexample., a local district with aschool tax rate of $10 and aregional equalization tax of $5would he guaranteed expend,tures for a local tax rate of $15.There are several reasons forhaving the regional schoolfinance equalization districts.First, the regional districtswould raise a substantialamount of equalization money,thus reducing pressures on thestate for additional equalizationaid. Second. the state moneycould then be distributed to alarger number of schooldistricts in the state. Third, itwould permit the state toeliminate the intermediateEducation District equalizationlevy, which is generallymisunderstood.

Categorical GrantsA third essential part of thecornrriittee. package ofpro )osals is state categorical

rants to districts havingchildren with special educational needs. Specifically, grantsare provided for specialeducation, compensatoryeducation, transportation,occupational education andnecessary small schools.

a. Special education. There areapproximately 50,000 school.ayes children in Oregonwith physical and mentaldisorders requiring specialeducational services. Only 64%of these children are presentlyreceiving services. Currently thestate provides only aboutone third of the costs for thosechildren being served. The 1971legislature enacted a lawrequiring districts to provideeducational services to allhandicapped children in theirdistricts. However, thelegislature did not provideenough funds to enable districtsto meet this mandate.The committee recommendsthat the legislature direct the

)epartment of Educationto -0!'itict a study on the costsor providing enticationalprograms for dicapped

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children. The legislature shouldprovide funds for the study andit should enact a new law forfunding special education thatrelates state reimbursement tothe particular educational needsof each handicapped child.

b. Compensatory education.Just as physically andemotionally handicappedchildren need special educationservices, we believe childrenfrom socially and economicallydisadvantaged families needspecial programs to preparethem for participation in theregular school program. Sincethe educational level of theirparents is often very low, thesechildren frequently need morelanguage and mathematicsinstwetion than students frommiddle income backgrounds.

Some children also needassistance in basic learning skillsso they can participateeffectively in the classroomsituation. This can frequentlybe provided by teacher aideswho are also parents of childrenin school. Additionally,children from poor familiesmay need special health servicesas well as breakfast and lunchprograms. In short, thesedisadvantaged children needmore money spent on them toprovide them an equaleducational opportunity. Forthese reasons, the committeebelieves special categoricalgrants should be provided todistricts with concentrations ofeconomically and sociallydisadvantaged children.

There are several criteria thatcan be used to identify studentsfrom disadvantaged families:test scores, income, andchildren from families receivingwelfare payments. Test scoresare not available in Oregon, andfigures on low income familiesare out of date. Current welfarefigurers show that there areabout 40,000 school agechildren in Oregon fromfamilies receiving welfarepayments. The committeerecommends that the stateprovide funds for compensatory

education grants scaled Zo theconcentration of children fromfamilies receiving welfare.

C. Tr;.nsportestion. Sincetransportation costs are notrelated to educational programsand place an unfair burden onsome districts. !he committeerecommends that the state pickup 75t of the previous year'sapproved costs. Currently thestate' reimburses school districtsfor beqween 50% 55% of theirzrAnsportation expenditures.

d. Occupational education.Oregon has made great stridesin bringing occupational andcareer education concepts intoits educational program. Butmost of the current programsare supported with eitherfederal or local funds. Thecommittee supports theemphasis placed on occupa-tional education, but wouldencourage additional statesupport of these programs atthe local level.

Currently, the State Depart-ment of Education collectsinformation on occupationaleducation programs funded bythe federal government, Thereis very little information on theoccupational programs providedby local school districts, or byother educational institutionswhich make their programsavailable to public schoolstudents. Therefore, thecommittee recommends thatbefore any large state fundingprogram for occupationaleducation is begun, informationon current programs becollected. While this is beingaccomplished, the state shouldprovide seed money for newoccupational educationprograms at the local level.e. Necessary small schools.Grants should continue to beprovided for necessary smallschools.

I.

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The three proposals we havepresented make up a single planfor reforming Oregon's schoolfinance system. Therefore. it isimportant to see how all of theproposals, when consideredtogether, affect the distributionof funds to local schooldistricts. There are manypossibilities for changingspecific parts of the new schoolfinance plan. Whenever achange is contemplated,though, it must be consideredalong with the other compo-nents in order to get anaccurate measurement of itsimpact.

To help the reader understandhow this new package of schoolfinance proposals would affectschool districts, information isprovided here for five of them:Portland, Reedsport, Beaverton,Eugene, and Hermiston. For thereader wanting more informa-tion, additional data for a largernumber of districts arepresented in Tables AD in theAppendix. Results for everyschool district are availableupon request from thecommittee staff.Effects in 1973-74The effects of the new financeproposals are shown for1973-74 as if the new programhad been used that year todistribute state school aid. Bycomparing the results under thenew plan with the presentdistribution system, the readercan see the kinds of changes thenew program would produce.As mentioned before, thepackage consists of three majorpartsthe local guaranteedyield program, regionalequalization districts, andcategorical grants for specialeducation, compensatoryeducation and transportationprograms. The simulated197374 results are based upona local guaranteed yieldprogram in which a districtwould have been guaranteed aminimum of $780 at a $10local school tax rate, $1080 at a$16 local tax rate, and amy' ximum of $1290 at a $22

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Inca' tax 'Muttion, there would have

It4441 Uitorm regional taxtev,ed to ptOthICe5300 perstudent in each region. Districtswould have received categoricalgrants ut 5200. $400. or S600for compensatory educationstudents, depending on thenumber ut such studentsin each district. Specialeducation grants would havebeen the SarTIC! (IS under thepresent system, while statereimbursement for transporta Zion costs would haveincreased to 7:3% of theprevious year's approved costs.Grants for necessary smallschools would remain the sameas at present. Such a programwould have cost the stateS203.4 million in 1973 74(551.7 million more than wasactually spent). This wouldhave increased state support toapproximately 32%.As you can see from Table 1,the new plan distributes morestate money to low propertywealth districts than tohigh property wealth districts.In comparing the distributionof state money under the localguaranteed yield program withthat provided in 1973 74 underthe current Basic SchoolSupport Fund in Table 2,considerably more state moneywould have been sent torelatively poor districts underthe new proposals than underthe old system.

Effects in 1975.76The effects of the new financeproposals for 1975 76. the firstyear of the next biennium, areshown in Table 3. By usingprotections of both propertyvalues in school districts andenrollment in those districts,and by making the assumptionthat educational costs willincrease on a per capita basis atan average rate of ten percent ayear between 1973 74 and1975 76. it is possible toillustrate what would happen toa diStrICVS taxes and statereceipts Limier the newprogram

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In the 1975 76 simulation aschool district would beguaranteed a minimum of $980per student at a S10 localschool tax rate. It would beguaranteed an additional$57.50 per student for eachadditional dollar up to a localtax of $16 and an additionalS36 per student for eachadditional tax dollar between516 and $22. As before, therewould be no equalization above522.

The regional equalizationdistrict grant would beincreased by 10 percent a year,to 5363 per child. Grants forspecial education, compen.satory education, andtransportation reimbursementwould likewise be increased tokeep up with the increasingcosts of education.In summary, the new programaccomplishes the goals of thecommittee. State money isdistributed in such a way as tosubstantially reduce the effectsof local wealth on a child'seducation. State support isincreased to meet the needs ofchildren requiring extraeducation services. And finally,the new program is designedaround a very simple idea, thatdistricts which exert the sametax effort for schools should beable to spend approximatelythe same amount of money perstudent.

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1. RESULTS OF THE NEW PROGRAM IN 1973.74Number of

Students(Weighted)

PropertyValue per

Student

Portland 70.291 67,790Reedsport 1,692 67,998Beaverton 21.897 47.376E u gene 22,260 44,446Hermiston 2.791 26,480

Total State Local TaxReceipts Rate Needed

Per Student To MaintainExpenditures

332.92 13.65247.70 13.82374.53 15.84443.74 15.32508.81 15.08

2. CHANGES UNDER THE NEW PROGRAM IN 1973-74

PortlandPeedsportBeavertonEugeneHermiston'This is the change in local1973 74 spendable receipts.

ChangeIn State

Receipts67.2413.88

135.93203.56

72.06tax rate required

Changein School

Tax Rate*0.0

+1.33-3.10-3.87-1.48

to maintain actual

3. RESUL iS OF THE NEW PROGRAM in 1975-76*Ntimber of Property Total State Local Tax

Students Value per Receipts Rate Needed(Weighted) Student Per Student to Maintain

Expenditures68,470 85,670 355.08 13.74

1,688 77,624 312.64 14.1722,037 60,450 416.11 16.0621.164 56,505 515.47 15.52

2,571 35,652 610.72 14.82predicoons of tcv and enrollment in 1975-76 and thethat school costs per student will increase 10% a year

1974.

PortlandReedsportBeavertonEugeneHermiston'Based onassumptionfrom 1973

16.

II The legislature shouldprovide state school aid to localschool districts through a localguaranteed yield program.A district would be guaranteeda level of revenue correspondingto its locally selected tax rate.State school support to adistrict would be the differencebetween the guarat;teed amountand the amount the districtreceives from its local property!esi plus some federal receipts.A guaranteed yield schedulewhich would achieve 32%support in 1975 76, forinstance, might guarantee eachdistrict $980 per student at a$ IO local school tax rate,$57 50 for each additionaldollar of tax up to $16, and$36 for each additionaldollar of tax up to amaximum of $22. Districtswould be free to taxthemselves above the $22rate but no equalizationwould be provided.

2,The legislature should makea commitment to support atleast 30% of the operating costsof elementary and secondaryeducation in the state.To do this, the committeerecommends that the legislationestablishing a local guaranteedyield program be written insuch a manner that it wouldtake positive legislative actionto reduce the proportion ofstate support below the 30%level.

aThe legislature shouldprovide that the local guaran-teed yield schedule be adjustedannually to maintain at least30% state support.

4hThe legislature shouldlimit the amount of unrestrictedstate money a district receivesper student in any one year.This expenditure limitation isincluded to produce an orderlyincrease in the amount ofmoney spent by districts which

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IS

receive !imp! increases Linder anew state school financeprogram.

The legislature shouldenable districts to receive equal.oration aid adjusted for enroll-ment fluctuations, such thatthey would receive credit for100% of enrollment increases,or gradual reductions in statefunds due to enrollmentdecline.When a district suffers a declinein student enrollment, many ofthe costs a-tiros/dingeclucatigpal services are difficultto reduce immediately.Buildings have to be heated andmaintained. Teachers cannot bereleased without notice.

&The legislature shouldestablish three school financeequalization districts to assistthe state in equalizing theability of districts to supporttheir educational programs.The proposed districts would beas follows:

I. Eastern DistrictAll school districts east ofthe Cascades.

II. Western DistrictAll districts west of theCascades except those inDistrict III.

III. Metropolitan DistrictAll districts in Clackamas,Columbia, Multnomah,and Washington Counties.

A uniform tax would be leviedthroughout each region. Thereceipts generated from this taxwould be distributed to schooldistricts in that region on aper student basis.

7 The legislature shouldestablish an amount to be raisedby a uniform tax in eachregional school finance district.The district wide tax rate wouldbe added to the local school taxrate in determining a district'sguarantee under the localguaranteed yield program. Aflat grant (of say $363) wouldbe an offset in the state

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BEST COPY Amamiequalization formula, that issubtracted from the amount adistrict would receive from thestate.

13The amount raised by theregional equalization districtsshould be increased annually ata rate equal to the averageincrease in school expendituresin the state.

aThe legislature shouldrequire the development of acomprehensive plan to financespecial education.The plan should include costanalyses of different ways ofproviding educational servicesfor the handicapped.

10. The legislature shouldprovide adequate funds to payfor the excess costs of specialeducation services for allhandicapped children in thestate.Excess costs for reimbursinglocal school districts should bebased on the cost estimatesproduced in the comprehensiveplan. It is estimated that $5.9million would be required innew federal, state and lotdollars to meet the needs of allhandicapped children in thestate. If the state were toassume all of these costs, plusthe present local share, the costto the state would be approxi-mately $16.1 million.

11. The legislature shouldprovide funds for compensatoryeducation grants scaled to theconcentration of eligibledisadvantaged students in eachdistrict.The total number of disadvan-taged students served in eachschool district with these fundsshould be based on the numberof school age children fromfamilies receiving welfarepayments.

4 el.206.7

12. The legislature shouldincrease transportation rein'bursement to 75% of theprevious year's approved costs.

13. The legislature shouldamend the current transporta-tion formula to eliminate anydollar limitation on thedepreciation of buses.

141 The legislature shoulddirect the State Department ofEducation to collect informa-tion on occupational educationprograms currently beingoffered in public schools, lED's,community colleges andproprietary schools and developa comprehensive plan foroccupational education inOregon.

15. The legislature shouldprovide state categorical moneyas seed money for newoccupational educationprograms at the local level.

16. The legislature shouldcontinue to provide grants fornecessary small schools.Due to the sparsity ofpopulation in some areas of thestate, it is impossible toassemble enough pupils in asingle building to have normalsize classes. In these situationsthe per pupil costs of providingadequate education servicestend to be hir her than normal.When small schools arenecessary, the committeebelieves the state should assistthe district in meeting the extracosts of keeping them open.

17 The legislature shouldrequest the Department ofEducation to develop 3comprehensive plan (.4n schoolfacilities.Undid the current schoolfinance system in Oregon, localschool districts are responsiblefor the construction and

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maintendnce of their schoolTh,s means that

wealthy districts are able toafford better facilities thanpoor districts. The committeebelieves the quality ofeducational facilities affects thelearning opportunities ofch;ldron just as the level ofeducational expenditure does.A district'c ability to finance itsschool buildings should,therefore, be equalized alongwith its ability to raiseoperating expenditures. Theplan should take into accountthe projected growth or declineof student enrollments and theadequacy or obsolescence ofexisting facilities

18. The legislature shouldenact legislation permitting localschool districts to utilize thestate's excellent credit ratingfor local school bond issues.

19. The legislature shouldconsider a lease-purchase planfor school construction andremodeling.Buildings would be constructedor remodeled for local districtsand then leased back to thosedistricts. At the end of aspecified period, ownership ofthe building would revert to theschool district.

20. The State Departmentof Education should establish aschool finance policy unit toutilize the Oregon SchoolFinance Simulation and advisethe Superintendent of PublicInstruction on matters relatedto school finance.

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TABLE A. LOCAL GUARANTEED YIELD PROGRAM WITHREGIONAL EQUALIZATION/BASIC DATA, 1973.7401*.

SCHOOL DISTRICT NAMEPlush No. 18Olex No 11McKenzie No 68Sherman UH No. 1Central Linn No. 552Harper No 66Portland No. 1JReedsport No. 105Bend No. 1Parkros No. 3kliEnath Falls No. 1Beaverton No 48JCorvallis No. 509JEugene No 4JLake Oswego No. 7JSalem No 24JHood River No. 1

Burns UH No. 2Medforri No. 549Oregon City No. 62Pendleton No. 16RCoos Flay No. 9Springfield No. 19Astoria No. 1Ashland No. 5Falls City No. 57Baker No. 5JNorth Bend No 13Redmond No. 2JGresham No. 4Ninety One No. 91Creswell No. 40Hermiston No. 8Selo No. 95CReedville No. 79South Umpqua No. 19Oak Grove No. 4Cascade UH No. 5

TOTAL OR MEAN

This table shows what theeffects of the local guaranteedyield program recommended bythe Committee on EqualEducational Opportunity wouldhave' been in 1973 74. In thisprogram each district isguaranteed a minimum of 5780per pupil at a S10 school taxrate The guarantee increases byS50 for each additional dollarof tax up to $16. and $36 foreach additional dollar of taxbetween $16 and $22 Districtsare free to tax themselves aboveS22 but there IS no equalization

Present YearAdj TCV

Per ADMW

Weighted ADMSimulated

482994.41 8.05183985.90 39.22171386.42 481.05108781.04 231.4092260.55 1085.5069795.57 110.5067790.33 70290.5667098.49 1691.9051026.99 6052.0050635.40 5745.7747821.37 2125.0047375.79 21896.5945176.89 8098.0944446.17 22260.2943765.06 7066.5943066.86 24494.1942828.28 3465.0742114.67 653.9041992.99 10882.5941538.87 6538.5041392.41 4006.9240373.96 6584.4039700.19 10889.6439190.44 2220.0038423.11 3235.0038109.75 218.0037152.90 3086.3036728.62 3751.3036175.75 3380.6035476.60 3400.0032226.50 400.0030679.12 1092.4026479.96 2790.8025369.02 923.1024810.24 875.0024564.82 2554.0023904.33 200.0023627.67 1330.0047621.84 516233.45

provided beyond that point.The program also calls for a$300 regional equalizationdistrict grant. Compensatoryeducation grants of $200 areprovided for students from lowincome families whichconstitute 5% or less of thedistrict's enrollment. Grants of$400 are provided for thoseconstituting from 5% to 10%;and $600 for those over 10.Transportation costs arereimbursed on the basis of 75%pf the previous year's approvedcosts. And districts would

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T of ()per TaxRaw Sint

ape, TaxRate Diff

Total StateRcpt Sim

Per ADMW

Tot ReceiptsSimulated

Per ADMW9 (36 4.64 86.96 2825.84

14 36 2.72 253.99 1839.6414.98 0.03 173.46 1973.467 67 2.44 120.91 1833.63

16.57 2.48 91.32 1418.0811.26 0.35 173.64 1274.1713.65 0.0 332.93 1318.5313.8? 1.33 247.70 1244.1013.10 -1.92 362.04 1200.2713.71 -1.21 371.62 1160.806.87 -1.72 372.27 1250.04

15.84 -3.10 374.53 1273.4918 48 -2.14 456.59 1531.2915 32 3.87 443.73 1270.3613.78 -3.42 377.35 1368.6012.88 -4.04 422.00 1232.4714.70 -3.47 379.i! 1416.46

7 47 0.57 374.15 1359.7312.35 - 2.91 392.64 1017.9811 35 2.83 396.63 1026.5814 22 -4.23 389.10 1103.4814 76 -4.46 489.17 1207.0314 72 3.74 461.97 1232.3314 09 1.13 435.06 1438.4313.14 3.29 428.18 1138.1411 27 -2.86 537.90 1380.8610 94 0.17 369.38 1104.3514 31 3.91 501.13 1226.7613 93 3.99 459.23 1246.639 48 1.72 501.30 1283.7"6 43 0.35 427.27 1093.46

12.91 1.81 495.38 1170.8115 08 -1.48 508.81 1167.1410.71 0.92 457.45 1005.125 20 -2.58 445.24 1029.89

10 74 2.16 427.83 1149.086 88 2.27 474.51 1082.868 02 1.27 580.28 1255.75

3799.84 -99.98 393.84 1247.44

receive the' same sneCitilethical ion grants ai Under theorecent formula

Present Year Adi TCV PerADMW is the amount ofaccessed iit000t tv value for eachweighted cturle>nt in the district.Weighted ADM Simulated isthe hiner of Weighted pupils.Pr m,tty tittidentS count (6 1 andhigh school students count as13Tot Oper Tax Rate Sim Is thetax rate required under thisotopam to maintain the %One ..

it op

23.

level of spendable receipts asunder the current state schoolfinant e formula.Oper Tax Rate Diff is thedifference in school tax ratethan under the current system.Total State Rcpt Sim PerADMW is the amount of statemoney a district receives perweighted student.Tot Receipts Simulated PerADMW is the total amount ofspendable dollars from allsources that a district has tospend per weighted student.

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TABLE B. LOCAL GUARANTEED YIELD PROGRAM WITHREGIONAL EQUALIZATION/RECEIPTS, 1973-74

SCHOOL DISTRICT NAMEPlush No. 18Olex Nu. 11McKenzie No. 68Sherman 1.JH No. 1Central Linn No. 552Harper No. 66Portland No. 1JReedsport No. 105Bend No. 1Parkrose No. 3Klamath Falls No. 1Beaverton No. 48JCorvallis No. 509JEugene No. 4JLake Oswego No. 7JSalem No. 24JHood River No. 1Burns UH No. 2Medford No. 549Oregon City No. 62Perdleton No. 16RCoos Bay No. 9Springfield No. 19Astoria No. 1Ashland No. 5Falls City No. 57Baker No. 5JNorth Bend No. 13Redmond No. 2JGresham No. 4Ninety One No. 91Creswell No. 40Hermiston No. 8Scio No. 95CReedville No. 29South Umpqua No. 19Oak Grove No. 4Cascade UH No. 5

TOTAL OR MEAN

State LGYEqualiz SimPer ADMW

0.00.00.00.00.0

99.80190.56205.44316.62332.53268.94336.18380.66389.34337.91363.35309.17331.44351.16350.70336.56407.40402.61383.53375.01401.14316.68443.43412.37454.46374.36403.83463.83375.20410.40367.00443.67509.66320.99

Instr CategRcpt Sim

Per ADMW0.00.0

63.549.36

24.220.0

121.4210.1012.1016.3583.5810.2439.0939.5213.8734.3318.414.62

18.9315.7213.0843.0432.5021.2035.60

101.3125.2726.1512.9912.78

2.2756.7012.1231.40

6.2127.10

1.0924.8239.45

This table provides additionalinformation on district receiptsfor the same program in Table A.State LGY Equaliz Sim PerADMW is the amount ofequalization money a districtreceives per pupil under thelocal guaranteed yield program.Instr Categ Rcpt Sim PerADMW Is the amount ofcategorical money a districtreceives from the state per pupilfor special education andcompensatory education;)r (MINIMS

Transport Rcpt Sim Per ADMWis the amount of statereimbursement for transports.tion costs of the previous year.Tot Intermed Receipts Sim ParADMW is the sum of theregional equalization grants andI E D and County School Fundreceipts.Total Local Receipts Sim PerADMW is the amount raisedlocally per pupil from localschool tax rate.Total Nonfed Receipts Sim PerADMW is the amount received

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Transportfi('pt Stm

Per ADAM

Tot lotermedReceipts Sim

Per ADMW

Total LocalReceipts Sim

Per ADMW

Total NonfedReceipts Sim

Per ADMW

Total StateRcpt Diff

83 fib 431 76 2301.12 2825.84 1548.77250 85 326 56 1259 10 1839.64 6364.83105 4.)0 359 37 1352 04 1884.87 46559.45108 29 313 13 1396 87 1831.51 36976.756 3 59 335 22 946 29 1372.83 162299.5610 15 311 /6 777 00 1262.40 -9040.361ti 322 18 565 55 1220.65 4726687.0028 6 7 .111 11 514 42 1233.23 23486.50.10 10 331 05 462.40 1155.49 793935.8118 60 314 71 452.96 1139.29 600383.0615 09 368 24 445.86 1186.37 298352.3124 ti4 308 22 587 07 1264.81 2976384.00.13 27 314 65 737 65 1508.89 1309927.0011 12 359 /9 444.45 1247.97 4531175.0022 0? 316 70 666.49 1360.54 778312.4420 4? 328 75 470.36 1171.11 3751467.0048 4? :375 65 619.88 1375.23 468703.06.35 80 35? 94 615.18 1342.27 93587.4418 84 324 66 280.37 997.66 1333081.00.)1 09 313 00 303 19 1012.82 493746.7535 71 :318.25 369.18 1076.52 446410.7535 01 323 2.4 359.03 1171.44 1230706.0023 15 359 04 373.00 1194.02 2059650.0026 30 312 84 642.70 1390.59 282749.0013 98 323.94 373.55 1125.67 347263.0031 68 307 80 503.05 1348.75 23933.1123 83 336 96 359.54 1065.88 205777.75?7 94 319 99 359.87 1180.99 488455.7530 63 329 58 424.69 1213.5n 407303.8830 84 306.47 464.27 1272.04 451495.254 7 14 317.50 317.44 1062,21 -2820.9031 07 355.86 265.95 1117.19 88348.8829 /4 315.01 273.63 1097.46 200981.3847 68 335.33 164.00 956.78 33717.56254? 314 06 253.29 1012.58 -937.28:30 12 414 48 209.18 1051.49 -43397.5127 00 311.04 208.81 994.36 25832.9842 43 314.06 306.52 1200.86 156082.7529.61 331.41 483.28 1208.53 51675267.49

pet pupil from all non federalSOtirc es.

Total State Rcpt Diff Is thechange in total Staff! !MOMS a(Itstrict Would receive inComparison to the presenttOrMula

IP I.

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TABLE C. LOCAL GUARANTEED YIELD PROGRAM WITHREGIONAL EQUALIZATION/ BASIC DATA, 1975.76

SCHOOL DISTRICT NAME

Present YearAdj TCV

Per ADMW

Weighted ADMSimulated

Plush No 18 998797. 73 4.30Olex No 11 218503.47 31.60Mc Kentie No 68 173457.20 517.20Shennan UH No_ 1 129501.75 216.12Central Linn No. 552 126593.33 1093.60frer No. 66 99061.38 84.12Portland No 1J 85670.61 68469.88Reedsport No 105 77624.43 1688.07Parkrose No. 3 64683.88 5350.72Bend No 1 64683.24 6224.60Beaverton No. 48,1 60450.00 22036.69Corvallis No. 509J 58490.84 7732.67Klamath Falls No. 1 56828.06 2113.75Eugene No. 4J 56504.62 21164.12Lake Oswego No. 7J 55681.56 7113.30Salem No. 24J 55664.24 23500.34Oregon City No. 62 53195.51 6443.60Hood RIVI!C No. 1 51379.79 3482.70Falls City No 57 50957.97 186.20Springfield No. 19 50460.07 10800.60Pendleton No 16R 49539.15 3781.37Burns UH Na 2 49373.90 653.90Medford No 549 49347.61 11063.89Ashland No. 5 49009.01 3215.30Coos Bay No 9 46530.49 6676.89North Bend No. 13 44240.08 3631.90Baker No. 5J 42739.09 3096.60Astoria No I 42648.31 2449.17Ninety One No 91 40954.11 391.00Creswell No 40 38487.66 1080.12Redmond No 2J 37274.75 4030.80Gresham No 4 36544.82 4222.00Hermiston No 8 35651.69 2571.42Oak Grove No. 4 33531.54 190.00Seto No 95C 32163.92 934.40Ree,1ville No 29 31965.48 902.00South Umpqua No. 19 29030.77 2632.20Cac.cade UH No. 5 27407.76 1425.80TOTAL OR MEAN 58855.22 512947.67

This tahle shows the results ofthe same program described inTable A but in 1975 76 The104..11 (lux an teed yield schedulehas oven irico.ased to oroportfon to the' expected increase inethicattotial costs DIStriCtS are

ipliiaotood S980 Per pupil,it .1SM c-o. hoot t,ix rat., Thecits.i,trItti loCre,fSeS P, S57 50to, (1011,1, of tax

S It; ,in(it)N, $36 tor each0(101011.11 dollae o tax btWrDenSt Ind S22 Distr lets are ci(1,111)

ff*.t fl t.ft ,1ti()%0 the. $27 levelIF,,, #.1)kiallitit1011

district grants have beenincreased to 5363, and thecompensatory education grantsto 5242, 5484 and 5726 forconcentrations of disadvantagedstudents constituting 5%,5% 10%, and above 10%respectively. Transportationreimbursement and specialeducation grants are likewiseincreased in proportion to theexpected growth in educationalcosts.

The table entries are the same"1'4 those expiamed in Table A.

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Tut Oper TaxRate Sam

90714 3616 23

Oper TaxRate Diff

4.052.721.28

Total StateRcpt Sim

Per ADMW112.16289.13202.93

Tot ReceiptsSimulated

Per ADMW3658.112093.772305.27

7.79 2.56 144.00 2188.6315.57 1.78 109.82 1704.2616.90 - 0.01 86.36 1496.501.3.74 U.09 355.08 1552.6914.17 1.68 312.64 1469.4814 19 -0.73 379.22 1379.0513.53 -1.49 426.38 1426.1916.06 -2.88 416.11 1515.4219.58 _1.04 481.48 1823.216.60 -1.99 492.51 1429.5815.52 -3.67 515,47 1499.7114.16 -3.04 441.44 1611.8112.93 -3.99 512.55 1459.2211.53 -2.65 454.30 1224.8914.92 _3.25 494.75 1664.7710.98 -3.15 609.09 1580.0614.89 -3.57 563.22 1468.3713.85 _4.60 498.88 1304.71

7.64 0.74 495.12 1634.5412.21 -3.05 501.90 1216.9712.91 _3.52 531.43 1351.6514.75 _4,47 609.15 1429.6715.15 -3.07 609.19 1488.9610.94 0.17 499.62 1315.7414.17 1.21 572.91 1636.266.43 -0.35 504.61 1278.59

12.90 -1.82 602.00 1380.4914.12 -3.80 609.49 1450.369.72 -1.48 648.27 1504.13

14.82 -1.74 610.72 1383.506.94 -2.21 575.08 1300.53

10.71 0.92 585.24 1215.495.14 -2.64 537.58 1216.6010.74 2.16 552.17 1345.407.96 -1.33 727.32 1481.55

3830.40 -69.42 468.91 1477.42

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TABLE D. LOCAL GUARANTEED YIELD PROGRAM WITHREGIONAL EQUALIZATION/RECEIPTS, 1975.76

SCHOOL DISTRICT NAME

State LGYEqualiz SimPer ADMW

Inarr CatesRcpt Sim

Per ADMWPlush No 18 0.0 0.0Olex No 11 0.0 0.0McKenzie No. 68 0.0 74.54Sherman UH No. 1 0.0 11.17Central Linn No. 552 0.0 29.26Harper No 66 0.0 0.0Portland No. 1J 186.09 144.84Reedsi.ort No. 105 262.72 12.08Parkrose No. 3 333.23 19.57Bend No. 1 371.97 14.65Beaverton No. 48J 370.39 12.38Corvallis No. 509J 390.40 47.22Klamath Falls No. 1 373.21 97.22Eugene No. 4J 451.46 47.05Lake Oswego No. 7J 394.64 16.69Sakai No. 24J 442.63 41.37Oregon City No. 62 399.16 19.07Hood River No. 1 411.17 21.98Fails City No. 57 456.66 113.38Springfield No. 19 492.07 39.33Pendleton No. 16R 436.95 15.58Burns UH No. 2 443.80 5.59Medford No. 549 452.48 22.88Ashland No. 5 468.24 42.78Coos Bay No. 9 511.74 51.62North Bend No. 13 538.80 32.21Baker No. 5J 436.51 30.59Astoria No. 1 513.48 24.76Ninety One No. 91 441.18 2.74Creswell No. 40 492.90 68.00Redmond No. 2J 553.79 15.60Gresham No 4 592.16 15.47Hermiston No. 8 557.08 14.60Oak Grove No. 4 538.25 1.31Scio No 95C 486.15 38.03Reedville No 29 496.01 7.52South Umpqua No. 19 479.50 32.67C.P47,ftit' UH No 5 642.76 29.92

TOTAL OR MEAN 382.43 46.94

This; table provides (iota on district upon which the data indistrict receipts under the localcit..iracireed yield programdi's( r 'bed in Table C The table

these tables are computed.

witries t' same as thoseexplained under Table BThe information contained inTables A D also availablefrom the committee staff forevery year between 1973 74at,it 1978 79 and for every

rfr.trict in the state. Thestaff can also provide theenrollment oro;t1ctiOnS and truecash value predictions for every

bait

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TransportRept Sim

Per ADMW

Tot I ntermedReceipts Sim

Per ADMW

Total LocalReceipts Sim

Per ADMW

Total NonfedReceipts Sim

Per ADMW

Total StateRcpt Diff

108.84 510.37 3035.58 3658.11 -1766.48286 19 387 93 1416.70 2093.77 -7189.68124 10 420.56 1595.90 2219.39 25048.56129.61 376.55 1665.99 2186.54 -33833.2677 05 398.17 1151.08 1659.07 -141325.5682 97 374.46 1024.24 1485.06 20962.6219 92 384.86 716.25 1456.20 5637752.0034 39 472.83 673.25 1458. 73 132156.1322.32 377.54 601.01 1357.77 494202.1336.54 394.07 560.94 1381.38 1256925.0029.88 371.22 719.42 1506.74 3945245.0040.30 377.62 941.75 1800.85 1335536.0017.60 428.60 447.27 1368.37 548313.6313 28 421.8:3 540.38 1477.68 5563114.0026 64 379.61 782.74 1603.78 1251783.0024.67 391.63 493.93 1398.11 5460055.0032 95 376.03 380.76 1711.09 827689.4457.94 437.61 691.75 1624.11 876041.3135.56 370.21 57.06 1550.36 20082.3728 10 422.06 444.76 1430.04 3111950.0042 66 380.96 398.33 1278.18 773776.3843 44 415.94 706.03 1617.08 172689.9422.83 387.63 307.14 1196.66 2613114.0016.85 386. 77 421.07 1339.27 670792.1342.09 386.03 399.22 1394.39 2077000.0034 52 383.35 449.82 1442.37 821111.4428 92 399.96 377.69 1277.27 612867.1330.79 375.39 641.79 1590.09 720085.4457.20 380.50 362.22 1247.34 23574.9237 36 418.37 306.98 1327.35 197432.7536.89 392.36 415.63 1417.48 1311573.0037 42 369 47 475.22 1492.95 1484049.0035.93 377.95 325.45 1314.12 351419.1332.76 374.04 262.91 1212.03 40196.8057.90 398 36 183.50 1167.11 158296.4430.84 377.06 284.66 1199.29 94373.8136.41 477.05 218.95 1248.17 317363.7551.29 377.01 322.55 1426.88 421328.0635.76 394.17 576.03 1439.11 88884725.29

I

29.

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