- Associated Press - Monday, April 6, 2015

SALEM, Ore. (AP) - A two-year budget for Oregon schools is on its way to Gov. Kate Brown after Democrats in the state Senate approved it Monday in a party-line vote.

After complaining for weeks that the Democratic budget was inadequate, Republicans offered suggestions to increase it by $200 million. They were quickly dismissed by Democrats as unworkable.

In hours of debate, lawmakers from both parties said the $7.3 billion budget would provide too little money to help schools lower their class sizes and ultimately increase graduation rates. But Democrats said it was the best they could do without raising additional revenue. They’ve promised to increase education funding if revenue increase down the road through an improving economy or a reduction in tax rebates.

“Everybody agrees it’s inadequate,” said Rep. Rod Monroe, D-Portland. “But you should also understand that it’s the beginning, not the end.”

Kristen Grainger, a spokeswoman for Brown, stopped short of saying the Democratic governor would sign the bill but said the governor “looks favorably” on it.

Democrats, who control the House and Senate, have said they may seek to raise more money, potentially by reducing or eliminating “kicker” tax rebates that are projected to go out next year. Oregonians get kicker rebates when tax collections exceed expectations by at least 2 percent.

The two-year budget for K-12 schools is an increase of 9 percent over current funding levels, but school districts say it’s not enough for them to keep up with rising costs. Education interests say they’d need at least $7.5 billion for most school districts to avoid raising class sizes, shortening school years or cutting extracurricular programs.

Republicans proposed three changes they said would increase the budget to the level that education interests are seeking. They want to sell the Elliott State Forest in southeastern Oregon, freeze state employee pay and eliminate a program known as gainshare. Under gainshare, the state shares a portion of income taxes derived from a business expansion with the county that offered tax incentives to lure the business.

“Our school districts are trying hard, but if we expect more from them, we need to give them the resources to succeed,” said Sen. Tim Knopp, R-Bend.

It’s impossible to know the value of selling the Elliott but it would not likely derive anything close to the $40 million a year Republicans are counting on, said Sen. Richard Devlin of Tualatin, the Democrats’ chief budget writer. Freezing state employee pay would be theoretically possible, Devlin said, but it wouldn’t be wise to freeze pay hikes for one group of public employees in order to fund them for another - school district employees.

Democrats have supported changing the gainshare program, but their party is deeply divided on how deeply to cut it. Democratic Speaker Tina Kotek has declared the program will not look the same at the end of the legislative session.

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