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Published in Print: October 15, 2003, as Capitol Recap

Capitol Recap

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The following offers highlights of the recent legislative sessions. Enrollment figures are based on fall 2002 data reported by state officials for pre-K-12th grade in public elementary and secondary schools. The figures for precollegiate education spending do not include federal flow-through funds, unless noted.

Alabama

Without New Revenue,
Legislature Lowers Aid

It's been a tough first year for Gov. Bob Riley of Alabama, a Republican who watched voters overwhelmingly reject the tax and accountability plan he had hoped would transform Alabama and its education system.

Instead, just weeks after the failed Sept. 9 referendum, legislators in a special session rushed through a budget that compelled an array of cuts in state government and education programs. ("As Promised, Cuts Follow Failed Alabama Tax Vote," Oct. 8, 2003.)

"While I had hoped for a different outcome, it was the people's choice to make, for it is their government, not ours," Mr. Riley told legislators at the start of the special session in mid-September.

Gov. Bob Riley

Republican
Senate:
25 Democrats
10 Republicans
House:
63 Democrats
42 Republicans
Enrollment:
731,000

When the dust settled, overall state spending for K-12 education had declined slightly—by less than 1 percent—from $3.02 billion last year to $3.01 billion for the fiscal year that began Oct. 1.

Adding to the pain of the cuts are additional costs for teacher health-insurance and retirement benefits, which are expected to eat up an extra $80 million in state education aid this year.

The cuts include a big drop in spending on textbooks, from $42 million last fiscal year to $5.2 million in 2004, and the elimination of a $2.8 million line item for teacher professional development, $6.2 million for school library enhancements, and $8.4 million for school technology.

Also, the state department of education is seeing a 17 percent reduction in its operations and maintenance budget, amounting to $3.9 million. The agency will absorb much of that reduction by not filling 51 vacancies. It currently has 293 employees.

The situation is a far cry from how things might have been, say supporters of Gov. Riley's ambitious plan to rewrite the tax code. Those changes would have eventually brought in an extra $1.2 billion, with much of that money destined for education. Mr. Riley proposed the package after discovering an estimated budget shortfall of nearly $700 million.

Instead of simply plugging the hole, he wanted to bring in enough additional revenue to expand funding for some programs and set up new ones, such as merit-based college scholarships. The package also contained new accountability measures for schools and state government.

But voters said no by a vote of 68 percent to 32 percent.

—Erik W. Robelen

Oregon

New Tax Increases
Could Be in Jeopardy

In their longest-running legislative session ever, Oregon lawmakers in late August approved an $11.6 billion biennial state budget for fiscal years 2004 and 2005 that includes $792 million in tax increases.

K-12 education will receive $5.2 billion over the biennium, a 13 percent increase from $4.6 billion in 2001-03. Schools may get another $100 million if certain lottery revenue and general-fund revenue targets are met.

Gov. Theodore R. Kulongoski signed the budget bill on Aug. 26 despite having said in January that he would not approve a budget with an income tax increase.

"I signed this bill, as a last resort," the first-term Democrat said in a statement, "because I am committed to providing all of Oregon's children with a full school year."

Gov. Theodore R. Kulongoski

Democrat
Senate:
14 Democrats
16 Republicans
House:
25 Democrats
35 Republicans
Enrollment:
554,000

Yet schools, which trimmed school days and cut programs last year because of the state's depressed economy, may have to wait a bit longer to know how much state funding they'll actually get.

Controversy over the budget-balancing, tax-hike measure was so rancorous that it stretched the legislative session to a record-breaking 227 days. The measure includes a temporary income-tax surcharge ranging from 1 percent to 9 percent, a minimum corporate tax on business sales, and an extension of the state's 10-cents-a-pack cigarette tax, among other increases.

In response, tax-measure opponents have launched a signature-gathering drive to force a referendum on the tax increases. If they gather at least 50,420 valid signatures by Nov. 25, Oregonians can decide on the tax-hike legislation in a Feb. 3 special election.

If voters were to repeal the tax measure this coming winter, the state budget would suffer almost $545 million in revenue losses. Of that, $414 million would come from the budget for schools.

—Rhea R. Borja

Vol. 23, Issue 7, Page 22

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