Oregon voters will decide in the May 21 primary election if Ballot Measure 13 is worth busting open the state’s school system piggy bank, a move that could directly affect University students.
Measure 13 would convert the state’s existing education endowment fund of an estimated $278 million into an education stabilization or “rainy day” fund. The two funds differ in that the endowment fund spends only the revenue earned on interest while leaving the principal untouched. The stabilization fund could be tapped at any time, perhaps wiping it out completely. With its passage, Measure 13 would authorize the legislature to use any portion of the endowment fund with a three-fifths approval from each legislative house.
If approved, $220 million will go directly into the state school system in May 2003 to counteract the recession and Oregon’s budget shortfall. The Oregon legislature cut school budgets by $332 million for the 2002-03 school year.
University students will be directly affected by Measure 13, said Chip Terhune, spokesman of the Our Kids Deserve Better committee. If the measure passes, many scholarship funds will be cut, unless the legislature allocates a portion of the remaining fund to scholarship programs, he said. But Terhune said that given the situation, the odds of the legislature routing money to scholarships are “next to none.”
“If you’re looking for long-term solutions and making no attempt to help school funding, why would you raid the one fund dedicated to school funding?” Terhune said. “It doesn’t make any sense.”
Supporters of the measure say that, despite cutting the fund to $58 million, it will grow to more than $600 million over the next 10 years. Each year, 15 percent of the net proceeds of the state lottery, or about $50 million, are deposited into the fund.
State Rep. Lane Shetterly, R-Dallas, is a member of the committee that proposed the measure during the legislature’s second special session. Shetterly called the measure “a wise use of resources available to fund schools” and said he’s “passionately” in favor of Measure 13 because it would create a long-term stability fund and it represents the best option to fill the financial void caused by budget cuts. While the possibility remains that Oregon may not pull out of its recession, Shetterly said it is “highly unlikely” that the proposed fund would be completely drained.
But because Measure 13 proposes the immediate allocation of such a large proportion of the existing fund, the measure has its share of opponents.
State Rep. Phil Barnhart, D-Eugene, said Measure 13 fund would build up only about half as fast as the current fund.
“A rainy day fund has to build up fast enough so that the next time it rains you have money to spend,” Barnhart said.
Ballot Measure 13 was created to meet the desire for a stability fund and to prevent tax hikes, said Bob Applegate, press secretary for Gov. John Kitzhaber, D-Oregon.
“It would be better for about six months,” Applegate said of the measure. “Then it would fall off a cliff in about a year.”
The endowment fund, established in 1995, has generated interest that has been used for technological advances, facility upgrades and opportunity grants, with the principal remaining untouched. Ken Rocco, legislative fiscal officer for the state, said the current fund will earn about $15 million in interest from July 2001 to July 2003. Of that total, he said, 75 percent will be used to pay off outstanding bonds with the remainder given to the scholarship commission.