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Legislative Update

Legislative Update. OSBA/COSA Thursday, November 12, 2009 OASBO Fall Conference. Welcome & Introductions. Tricia Yates, OSBA Associate Executive Director David Williams, OSBA Legislative & Public Affairs Specialist Chuck Bennett, COSA Legislative Director. Agenda.

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Legislative Update

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  1. Legislative Update OSBA/COSA Thursday, November 12, 2009 OASBO Fall Conference

  2. Welcome & Introductions • Tricia Yates, OSBA Associate Executive Director • David Williams, OSBA Legislative & Public Affairs Specialist • Chuck Bennett, COSA Legislative Director

  3. Agenda • 2009 Legislative Session Review • Education Funding • Revenue Package • Capital Construction Package • Looking Ahead • Questions, Answers & Discussion

  4. Political Context • November 2008 General Election Outcome (Candidates & Measures) • 2009 General Legislative Assembly • Senate: 18 Democrats, 12 Republicans • House: 36 Democrats, 24 Republicans • Governor: Democrat • National Fiscal Crisis

  5. Education Funding • 2007-09 biennial budget • Fiscal crisis forced budget rebalance • K-12 reduction limited to $121 million ($67 M in December, $54 M in March) • 2009-11 biennial budget • Overall general fund shortfall of $4.4 billion from Essential Budget Level • $6.0 billion ($5.8 B in SSF + $200 million in automatic triggered reserves) • Override of Governor’s Veto of K-12 Budget

  6. Education Funding: In Perspective • 09-11 SSF Appropriation: $5.753 (w/o ARRA) • 7.9% decrease from 07-09 (-3.9% w/ARRA) • Public Safety: +1.2%; Natural Resources: -15.9%; Human Services: +10.4% • QEM Level (09-11): $8.348 Billion ($2.6 B gap) • Share of General Fund & Lottery • 1997-99: 44.7%; 2007-09: 41.3%; 2009-11: 38.95% • If 97-99 share:$6.460 B or $700 M more • American Recovery & Reinvestment Act (ARRA) • Federal stimulus package approved in February 2009. • Adds $226.1 M to SSF numbers (for a $6.0 B total SSF) • Adds $541.9 M to Human Services, $103.8 M to Corrections

  7. Education Funding:Revenue Package • Potential Impact of Revenue Package • Total revenue raised: $733 million • K-12 proportionate share: $285.5 million • HB 2649: Increases Personal Income Tax • For tax years 2009, 2010 & 2011: 10.8% for households between $250,000 & $500,000; 11% above $500,000. • For tax years 2012 and beyond: 9.9% for all households above $250,000. • Applies to approximately 28,000 income tax filers (LRO) • New rates are marginal tax rates • Total revenue raised by HB 2649: $472 million

  8. Education Funding:Revenue Package • HB 3405: Increases Corporate Taxation • S-Corps & LLCs: filing tax increases from $10 to $150. • C-Corporations reporting no Oregon profits: • Less than $500,000 in Oregon sales: minimum tax is increased from $10 to $150 • $500,000 or more in Oregon sales: minimum tax is increased from $10 to approx. 1/10 of 1% of OR sales (a corporation with $1 mil in OR sales will pay $1,000) • C-Corporations reporting Oregon profits: • For tax years 2009 & 2010, new tax rate of 7.9% for all corp. income above $250,000 • For tax years 2011 & 2012 rate decreases to 7.6% • For tax years 2013 and beyond income threshold increases from $250,000 to $10 million • Total revenue raised by HB 3405: $261 million

  9. Capital Improvement • HJR 13: Constitutional Revision • Expands constitutional definition of capital expenditures for local bonds • Allows state to issue general obligation bonds for K-12 capital construction • HB 2013: School Facilities Task Force • HB 2014: Construction Excise Tax Fix

  10. 2009 OSBA/COSA Legislative Report • Full analysis of all new laws affecting K-14 public education • No print version for 2009, report is only available online • Access the report at: www.OSBA.org or www.cosa.k12.or.us

  11. Legislative Challenges (Bills did NOT pass) • SB 574: ESD Mergers/Governance • Would have merged 20 ESDs down to 13 • Would have eliminated all elected ESD boards • SB 555: Transportation Grant $ Cut • Would have cut transportation reimbursement from 70/80/90% down to flat 63% • HB 2831: PECBA Reform/Repeal of Expedited Bargaining • Other Unfunded Mandates • (Year-Round school, mandated full day K, foreign language instruction, other curricular mandates)

  12. Looking Ahead • 2010 Supplemental Legislative Session • Other Ongoing Challenges • Online Charter Schools • Uniform Chart of Accounts • Public Contracting Legislation

  13. Questions & Answers For more information consult the OSBA/COSA 2009 Legislative Report contact OSBA at 800-578-6722 contact COSA at 503-581-3141 Follow us on Twitter: @OSBALegislative

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