New federal law will force ‘heartbreaking’ decisions, education advocate says

Stacy Michaelson of OSBA (right) appeared Wednesday, Oct. 1, before the Interim House Education Committee with Morgan Allen of the Coalition of Oregon School Administrators and Emily McLain of the Oregon Education Association. (Photo courtesy of Rep. Emily McIntire)

House Resolution 1, the federal "One Big Beautiful Bill," had Oregon's legislators' attention during Legislative Days this week.

At least eight interim committees held hearings over the three days on the Oregon repercussions of new federal actions, particularly the passage of HR 1 in July. Stacy Michaelson, the OSBA Government Relations and Communications director, was among the education advocates expressing concerns to the Legislature.

HR 1, dubbed the "One Big Beautiful Bill" by President Donald Trump, is a tax and spending bill. It cuts federal spending by $1.1 trillion, with the biggest cuts going to student loans, Medicaid and the Supplemental Nutrition Assistance Program, according to the National Conference of State Legislatures. It also cuts federal taxes by $4.5 trillion, which affects state tax collections as well.

HR 1 enacts numerous federal changes over multiple years, making it difficult to predict exactly how it will affect Oregon. HR 1 has few direct effects on Oregon K-12 public education, but it takes away food and health care assistance that students rely on while sapping Oregon's available funds to fill the gaps.

Oregon tax rates are connected to federal tax rates. A cut in federal taxes automatically reduces Oregon tax collections. The September Oregon Economic and Revenue Forecast estimated HR 1 would lower state General Fund revenue by $888 million in 2025-27, putting Oregon's budget $373 million in the red.

The Legislature will need to choose some combination of increasing revenue, cutting budgets and tapping reserves to keep the budget balanced this biennium and the next. While it's at it, the Legislature will also need to decide how much the state will step in to replace cuts in federal spending in Oregon, another pull on a budget already predicted to be underwater.

Oregon education leaders fear HR 1's indirect effects on students and schools.

HR 1 could reduce SNAP eligibility, not only increasing the number of hungry children but also making it harder for schools to draw state funding for nutrition services.

HR 1 does not affect school billing for Medicaid services but will still reduce some families' ability to get care. According to the Oregon Department of Education, reduced Medicaid funding could also push programs to pull from other funding sources such as the Individuals with Disabilities Education Act funds. A sustained loss of Medicaid funds could reduce the capacity of programs that serve early education and special education needs, according to the ODE presentation.

HR 1 also reduces available federal student loans, which could cut the number of people able to attend community college.

Michaelson appeared Wednesday, Oct. 1, on a panel before the House Interim Education Committee that included Emily McLain, the Oregon Education Association public affairs director, and Morgan Allen, the Coalition of Oregon School Administrators policy and advocacy deputy executive director.

McClain called the coming cuts "frightening" and challenged legislators to think about who will be most hurt as they consider policy.

Allen urged legislators to tap Oregon's reserve accounts to avoid mid-year reductions in school budgets. Unlike when the Legislature was forced to cut budgets mid-biennium in 2010, the state has more than $3.4 billion in rainy day accounts.

Michaelson said school budgets are already wildly complicated and built on uncertainties and projections without adding in more question marks about federal and state support.

"What we do know is that districts will be seeing students show up with increased needs at the same time that they'll be facing fewer resources," she said.

Michaelson said she did not envy legislators the hard decisions ahead but she reminded them that their decisions could lead to forcing school leaders to also make tough choices.

"I fear that the real impact of HR 1 in K-12 will be the countless, heartbreaking local decisions that our districts will have to make that add up to a statewide disservice to our students," she said.

- Jake Arnold, [email protected]