Governor’s proposed budget raids K-12 school funds to grow DHS again

by Dan Lucas

As school districts across the state brace for more budget cuts, state K-12 school funds are again being raided to grow DHS.

For the second consecutive budget cycle, the State School Fund (K-12) is being raided to give to the Dept. of Human Services (DHS). Since the last budget cycle, DHS has been split into DHS and the new Oregon Health Authority (OHA). Last budget cycle, $150 million was taken from the schools and DHS grew by $330 million. In the Governor’s proposed budget released yesterday, $225 million more would be taken from the schools and the DHS & OHA General & Lottery Funds would grow by $333 million more.

This shift towards human services and away from education was noted in Governor Kulongoski’s 2010 Governor’s Reset Cabinet Final Report.

DHS grew by $4 billion in the 2009-11 budget ($330 million in General & Lottery Funds, $600 million in Other Funds, and $3.1 billion in Federal Funds). $150 million was taken from the State School Fund to be able to increase the DHS budget.

In Gov. Kitzhaber’s current proposed budget, the State School Fund is again raided, this time for $225 million, to help replace $1.2 billion in DHS & OHA Federal Funds that are going away. Although $1.2 billion in Federal Funds are going away, the DHS & OHA budgets proposed are still $3.6 billion more than they were two years ago.  (The total DHS & OHA All Funds budget is still $3.6 billion more than the 2007-09 actuals, and the Federal Funds DHS & OHA budget is $2 billion more than the 2007-09 actuals.)

The $225 million that Gov. Kitzhaber’s proposed budget takes from the schools helps to increase the DHS & OHA General & Lottery Funds by $333 million – almost the exact amount those DHS funds grew in the previous budget.

The State School Fund isn’t the only cut being proposed – the largest All Funds agency budget cut in the Governor’s proposed budget is the Employment Department: despite unemployment that’s been stuck at over 10% for two years, they are facing a cut of $2.7 billion and 274 employees. The budget notes “The reduction is largely due to an anticipated decline in payment of unemployment insurance benefits. The decline in benefits is expected to occur as a result of several factors, including the end of federal extended and emergency benefit programs, increasing numbers of the long-term unemployed exhausting their benefits, and employers slowly beginning to increase hiring.”

Governor’s proposed budget raids K-12 School funds to grow DHS again (full article with sources and charts)