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Oregon Measure 86, Fund for Post-Secondary Education Amendment (2014)

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Measure 86
Flag of Oregon.png
TypeConstitutional amendment
OriginLegislature
TopicEducation
StatusDefeated Defeatedd
2014 measures
Seal of Oregon.png
November 4
Meausre 86 Defeatedd
Measure 87 Approveda
Measure 88 Defeatedd
Measure 89 Approveda
Measure 90 Defeatedd
Measure 91 Approveda
Measure 92 Defeatedd
Endorsements
Polls • Expenditures
Local measures

The Oregon Funding for Post-Secondary Education, Measure 86 was on the November 4, 2014 ballot in Oregon as a legislatively referred constitutional amendment, where it was defeated. The measure would have created a fund for Oregonians pursuing post-secondary education and authorized the financing of this fund via debt.[1]

Supporters called the measure the "Oregon Opportunity Initiative."[2] It was submitted to the legislature at the request of Treasurer Ted Wheeler (D), where it was known as Senate Joint Resolution 1.[1] The measure would have amended the state constitution to create a new article: Article XI-R.[1]

Election results

Below are the official, certified election results:

Oregon Measure 86
ResultVotesPercentage
Defeatedd No821,59657.21%
Yes 614,439 42.79%

Election results via: Oregon Secretary of State

Text of measure

Oregon Constitution
Flag of Oregon.png
Articles
Preamble • I • II • III • IV • V • VI • VII • VIII • IX • X • X-A • XI • XI-A • XI-B •
XI-C • XI-D • XI-E • XI-F(1) • XI-F(2) • XI-G • XI-H • XI-I(1) • XI-I(2) • XI-J • XI-K • XI-L • XI-M • XI-N • XI-O • XI-P • XI-Q • XII • XIII • XIV • XV • XVI • XVII • XVIII

Ballot title

The ballot title was as follows:[3]

“ Amends Constitution: Requires creation of fund for Oregonians pursuing post-secondary education, authorizes state indebtedness to finance fund

Result of “Yes” Vote: “Yes” vote amends constitution and requires legislature to establish fund for Oregonians pursuing post-secondary education, career training; authorizes state to incur debt to finance fund.

Result of “No” Vote: “No” vote rejects authorization for state to extend credit and incur debt to create dedicated fund for Oregon students pursuing post-secondary education and career training.

Summary:Amends Constitution. Oregon constitution generally prohibits the state from extending credit or incurring debt. Measure requires the legislature to create dedicated fund for exclusive benefit of Oregon students pursuing post-secondary education, including technical, professional and career training. Measure authorizes state to lend credit and incur debt to finance fund. Indebtedness incurred may not exceed one percent of real market value of all property in state. Moneys in fund not subject to constitutional limitations on investment. Generated earnings must be retained by fund, unless used to provide financial assistance to Oregon students pursuing post-secondary education. If governor declares an emergency, legislature may pass a bill to use the fund's money for any lawful purpose, provided the legislature also has approved a plan to repay the fund. [4]

”

Constitutional changes

SJR 1 would have created Article XI-R of the Constitution of Oregon. The proposed amendment was:[1]

ARTICLE XI-R

SECTION 1. (1) In the manner provided by law and notwithstanding the limitations con- tained in section 7, Article XI of this Constitution, the credit of the State of Oregon may be loaned and indebtedness incurred to:

(a) Finance the corpus of the Oregon Student Opportunity Fund established pursuant to section 3 of this Article.
(b) Refinance indebtedness incurred under this section.
(2) Indebtedness incurred under this section may be used to pay the costs of issuing, administering and paying indebtedness incurred under this section.

SECTION 2. (1) Indebtedness may be incurred under section 1 of this Article in an ag- gregate principal amount that does not exceed, at any one time, one percent of the real market value of all property in this state.

(2) Indebtedness incurred under section 1 of this Article is a general obligation of the State of Oregon and must contain a direct promise on behalf of the State of Oregon to pay the principal of, the interest on and the premium, if any, on the obligation. The full faith and credit and taxing power of the State of Oregon must be pledged to pay the principal of, the interest on and the premium, if any, on the obligation. However, the State of Oregon may not pledge or levy an ad valorem tax to pay the indebtedness.

SECTION 3. (1) The Legislative Assembly shall establish a fund to be known as the Oregon Student Opportunity Fund. The moneys in the Oregon Student Opportunity Fund must be used for the exclusive benefit of Oregon students pursuing post-secondary educa- tion, including technical, professional and career training.

(2) In addition to the deposit of proceeds of indebtedness described in paragraph (a) of subsection (1) of section 1 of this Article, moneys in the fund may include:
(a) Gifts, devises or bequests made to the State of Oregon for deposit in the fund; and
(b) Any other moneys deposited in the fund by law.
(3) Moneys described in subsection (2) of this section that are deposited in the fund:
(a) May be invested as provided by law and are not subject to the limitations of section 6, Article XI of this Constitution.
(b) Must be retained in the fund, except as provided in subsection (6) of this section.
(4) Earnings on moneys in the fund:
(a) Must be credited to the fund; and
(b) May be retained in the fund or used to provide financial assistance to Oregon students

pursuing post-secondary education, including technical, professional and career training.

(5) The Legislative Assembly may pass a bill to appropriate earnings on moneys in the fund for the purpose described in subsection (4)(b) of this section.
(6) Notwithstanding subsection (1) of this section, when the Governor declares an emer- gency pursuant to this subsection, the Legislative Assembly, with the approval of four-fifths of the members present in each house, may pass a bill to:
(a) Use the moneys for any lawful purpose if the Legislative Assembly has approved a plan to replenish the fund on appropriate terms.
(b) Use all or a portion of the moneys in the fund to pay the principal of, interest on and premium, if any, on indebtedness incurred under section 1 of this Article.

SECTION 4. The Legislative Assembly may enact legislation to carry out the provisions of this Article.
SECTION 5. This Article supersedes conflicting provisions of this Constitution. [4]

Background

Education Policy Logo on Ballotpedia.png
Education policy is a major issue in Oregon. To learn more, see "Public education in Oregon."
See also: Public education in Oregon

If Measure 86 were approved by voters, it would have made Oregon the first state to have an ongoing investment trust fund for higher education. Similar endowment systems are used by universities across the country to create financial stability and to provide scholarships.[5]

Current funding

There were several forms of funding for higher education in Oregon at the time of Measure 86's proposal. The National Conference of State Legislatures described the tuition-setting philosophy in Oregon in 2008 as a combination of moderate tuition and moderate aid.[6]

One way the state provides for higher education funding is through 529 plans, which are investment plans exempt from income taxes that families can use to save for future college expenses. In addition to the savings from the tax exemption, Oregon provides a state income tax credit of $2,120 for single tax filers and $4,240 for joint tax filers who contribute to 529 plans. These amounts are adjusted annually for inflation.[7]

Many states have "performance-based" funding systems for higher education which funds institutions based on the number of full-time equivalent students are enrolled at the school at the beginning of a semester. Oregon did not have such a system.[8]

Potential funding

A new program called "Pay Forward, Pay Back" was also considered as a possible way to fund higher education. The program would allow students to attend higher education institutions tuition-free by pledging to repay a small percentage of their income for a set number of years following graduation. In 2013, the Oregon State Legislature voted to have a commission study the concept. A pilot program is set to be proposed to the 2015 session of the legislature.[9]

The idea received national coverage with a number of supporters and detractors of this potential funding method. Advocates see it as an fair system where only those who seek higher education end up paying for it as opposed to using general funds to fund higher education.[10] Others, however, have questioned the feasibility of such a program. They have questioned the amount of risk the state's budget would have to take on to bankroll the project in the beginning. Additional questions about how to collect money from students who leave the state, whether or not to cap the total amount a student has to contribute and other questions remained unanswered at the time of Measure 86's proposal.[11]

Cost changes

According to The College Board, the average in-state cost for tuition and fees for 2013 to 2014 was $4,441 at public two-year institutions and $8,605 at public four-year institutions, which represent a 25 and 30 percent increase in tuition over the prior five years, respectively.[12]

Support

Oregon's opportunity.JPG
OregonSJR12014.jpg

The measure was supported by the Oregon Opportunity Initiative.[2]

Supporters

Officials


Ted Wheeler discusses the Opportunity Initiative.

Organizations

  • Oregon Opportunity Initiative
  • Oregon's Opportunity
  • Friends of Ted Wheeler

Individuals

  • Linda Gerber, President, Sylvania Campus of Portland Community College[2]
  • David Wilmott, Chief Operating Officer, Blount International
  • Roberto Gutierrez, President, Klamath Community College[14]

SJR 1 "Yes" votes

The following members of the Oregon State Legislature voted in favor of placing this measure on the ballot.[15]

Note: A yes vote on SJR 1 merely referred the question to voters and did not necessarily mean these legislators approved of the stipulations laid out in Measure 86.

Senate

House

Arguments

OUS Revenue Per Student.gif

The state treasurer's office argued on its website supporting the initiative that while tuition costs have been rising nationwide, they have risen disproportionately in Oregon. State assistance to students has declined at an annual rate of 5 percent over the last seven years, and the assistance is 20 percent lower than the national average. Meanwhile, students in the Oregon University System or Oregon community colleges pay 18 percent more in tuition than the country on average. From 2004 to 2012, tuition and fees in the Oregon University System rose 50 percent. During the same period, per capita income increased only 20 percent. According to the Oregon Opportunity Initiative website, "Although the underlying per-student costs to institutions remain relatively stable, students feel the pinch as a greater share of those costs are shifted their way." All of these factors have contributed to rising student debt problems.[16]

The Oregon Opportunity Initiative website claimed these issues needed to be addressed for three primary reasons:[16]

“
  • As tuition and fees increase, post-secondary education and training opportunities will become increasingly limited for all but the most affluent Oregonians.
  • Oregon’s per-capita income, which is already low compared to other states, will be driven even lower as more people miss out on the higher earning potential that comes from post-secondary education.
  • Oregon students who do attend higher education will be saddled with ever-larger debt loads, just as they are starting out in an unstable job market.[16][4]
 ”
—Oregon State Treasury

Campaign contributions

Total campaign cash Campaign Finance Ballotpedia.png
Category:Ballot measure endorsements Support: $91,575.00
Circle thumbs down.png Opposition: $0

Two groups, Oregon Opportunity Initiative PAC and Yes on 86, were the registered political action committees (PACs) for this measure as of October 25, 2014. The following are the campaign contributions as of December 1, 2014.[17][18][19]

PAC info:

PAC Amount raised Amount spent
Oregon Opportunity Initiative PAC $79,575.00 $66,443.41
Yes on 86 $12,000.00 $0.00
Total $91,575.00 $66,443.41

Top contributors:

Donor Amount
Northwest Health Foundation $5,000
Matthew Chapman $5,000
Warren Rosenfeld $5,000
Mary Pape $5,000
Cascade Corporation $5,000
Winthrop McCormack $5,000
Oregon Bankers PAC (125) $5,000
Oregon AFSCME council 75 $5,000
American Federation of Teachers $5,000

Opposition

Opponents

Individuals

SJR 1 "No" votes

The following members of the Oregon State Legislature voted against placing this measure on the ballot.[15]

Note: A no vote on SJR 1 meant that a legislator did not want to refer the question to voters and did not necessarily mean these legislators disapproved of the stipulations laid out in Measure 86.

Senate

House

Arguments

Bob Clark, former Senior Economist for the Oregon Public Utility Commission and economist for the Bonneville Power Administration, is a guest contributor for Cascade Policy Institute, a free market public policy research organization in Oregon. In a piece for the institute, Clark provided the following five reasons for opposing the measure:[21]

  1. "The State’s General Obligation Bond indebtedness would surge." The measure would increase state indebtedness by approximately 10 percent of its current outstanding debt.[21]
  2. "The interest cost to the State would be relatively expensive." The interest rate on the necessary borrowing for the initiative would be 4.5 percent. College students targeted by the initiative would likely already have access to federal government loans with interest rates of less than 4 percent annually. "Furthermore, federal government-sponsored student loans are increasingly becoming deferrable and even partially forgivable. The Opportunity Initiative, therefore, fails to take full advantage of less costly federal government college assistance resources."[21]
  3. "Investments for the Student Opportunity Fund may underperform." Clark questioned the state treasurer's estimate of a 7 percent annual rate of return by making comparisons to general stock market performance over 10 year periods.
  4. "College assistance and education are advancing without the Opportunity Initiative." The claim that general funds to the Oregon University system have been stagnating ignores non-state governmental funding for education. Additionally, the number of degrees-holding adults that the initiative sees as a goal of its funding far exceed the projected number of jobs requiring a degree in 2020.[21]
  5. "A non-taxpayer-funded alternative to the Opportunity Initiative called 'Pay Forward, Pay Back' is under consideration by the Legislature." The Oregon State Legislature authorized a pilot program which allows students to attend college without paying tuition if they sign a contract requiring them to pay a percentage of their income back to the school for a period of time following their graduation. "In the case of 'Pay Forward, Pay Back,' colleges could leverage student contract commitments by issuing revenue bonds, or even by incorporating and selling shares, so as to initiate the financing of free tuition pathways. What’s more, Oregonians at large would not be on the hook via taxation or reduced public services for interest costs, principal repayment, or failed investment returns."[21]

Media editorial positions

See also: Endorsements of Oregon ballot measures, 2014

Support

  • The Portland Tribune said,
“ At present, the state’s opportunity grant program only provides limited aid to one out of five students who qualify. If funding increases over a period of years and decades, the opportunity fund, its supporters and an oversight commission will wield greater influence over higher education in Oregon.

Measure 86 represents a small stride forward, but with time it has the potential to open up vast opportunity. We recommend a “yes” vote on this referendum.[4]

”
—Portland Tribune[22]
  • The Register-Guard said,
“ The Oregon Student Opportunity Fund would not make college and training programs affordable for all students — a goal that the state must achieve if it hopes to meet its goal of ensuring that 80 percent of high school graduates complete some form of post-secondary education by 2025. Such a result would require an endowment fund on the scale originally envisioned by Wheeler — or, if the Legislature prefers, larger direct appropriations to universities, colleges, training programs and financial aid programs.

Approval of Measure 86 would, however, show that Oregonians understand the need to prepare for a future in which most new jobs will require education or training beyond high school. It would show a readiness to invest some money today to obtain significant rewards for the benefit of the next generation and generations to follow. Measure 86 deserves a “yes” vote.[4]

”
—Register-Guard[23]
  • The Mail Tribune said,
“ Without the authority granted by Measure 86, the Legislature could not issue bonds to create the endowment, nor accept private philanthropy. The measure also authorizes lawmakers to lock the endowment so that it cannot be used for general government purposes. The only exception is a clause that would require the governor to declare an emergency, allowing the Legislature to use money from the fund for any lawful purpose as long as there was a plan to pay it back.

Measure 86 allows lawmakers the flexibility to create a protected fund that would grow through investments, with the proceeds proving scholarships for Oregon students. We recommend a yes vote.[4]

”
—Mail Tribune[24]
  • The Skanner said,
“ If passed this law would allow the legislature to sell bonds for a higher education loan fund benefitting college students as well as career training programs; it would not raise taxes, but it would give state lawmakers more tools to help college and trade school students get the best education they can. We vote YES.[4] ”
—Skanner[25]
  • The Portland Mercury said,
“ There are gripes about the measure—suggestions the fund's investments could tank and a specious argument that more aid will just let schools increase tuition—but no organized opposition. Some conservatives question the use of limited public money, saying private donations should be used to set up a fund.

But that's what's great about Wheeler's plan. Without raising your taxes, it would spur the legislature to put general fund money toward higher education, and also send a message that college education is a priority.

That message is long overdue.[4]

”
—Portland Mercury[26]
  • The Corvallis Gazette-Times said,
“ In some ways, Measure 86 lets the Legislature look the other way as the core problem goes unaddressed by state leaders: Oregon ranks in the bottom five for the amount of state revenue appropriated per student for higher education – this, at a time when the state’s enrollment has been rising at a pace that’s among the highest in the nation.

But legislative inaction isn’t a sufficient reason to block a measure that could do something – even if it’s a small something – to make college more affordable for students. Let’s be honest: Measure 86 is a bandage that doesn’t address the larger issues. But it could help to stop some bleeding, one student at a time. With reservations, we recommend a “yes” vote on Measure 86.[4]

”
—Corvallis Gazette-Times[27]
  • The Statesman Journal said,
“ Ballot Measure 86 is a simple proposal that could make college more affordable for many Oregonians...Measure 86 is a good investment in Oregon students. And it's a good investment in creating the trained, local workforce that employers need.[4] ”
—Statesman Journal[28]

Opposition

  • The Albany Democrat Herald said,
“ We'd be more likely to back Measure 86 if it went hand-in-hand with efforts to make college affordable. But that's a tougher nut to crack - and part of the answer there rests with Oregon's universities, many of which are in the midst of establishing their own governing boards. Making sure higher education is affordable needs to be near the top of the agenda at every one of these boards.

And Measure 86 lets the Legislature look the other way as the core problem goes unaddressed by state leaders: Oregon ranks in the bottom five for the amount of state revenue appropriated per student for higher education - this, at a time when the state's enrollment has been rising at a pace that's among the highest in the nation.

We can't fault the motivations behind Measure 86, but it fails to address the biggest issues regarding college debt. We reluctantly recommend a "no" vote.[4]

”
—Albany Democrat Herald[29]
  • The Oregonian said,
“ Before voting, consider this thought: If the prime interest rate was 7 or 8 percent and the stock market was stagnant or falling, would state officials be floating this proposal? You only have to go back to the early 2000s to find that scenario. And it's not as if state officials have never made decisions based on overly optimistic assumptions about the economy and financial markets...But what if the colleges, not the state, shouldered responsibility for raising the endowment's initial stake?...The Legislature then could focus on ways to establish a more targeted program to reduce community college costs, both for students seeking vocational training and for those pursuing the first two years of a four-year degree.

Would this approach be easy? Of course not. But what motivation will the schools and legislators have to even try if voters give them permission to use a credit card instead? A no vote will tell them to get back to work.[4]

”
—Oregonian[30]

Polls

See also: Polls, 2014 ballot measures
Legend

     Position is ahead and at or over 50%     Position is ahead or tied, but under 50%

Oregon Fund for Post-Secondary Education Amendment (2014)
Poll Support OpposeNot sureMargin of errorSample size
DHM Research
10/08/2014 - 10/11/2014		 35%41%25%+/-4.3516
Note: The polls above may not reflect all polls that have been conducted in this race. Those displayed are a random sampling chosen by Ballotpedia staff. If you would like to nominate another poll for inclusion in the table, send an email to editor@ballotpedia.org.

Path to the ballot

See also: Amending the Oregon Constitution

According to Section 1, Article XVIII of the Oregon Constitution a majority vote of both chambers of the Oregon State Legislature was required to place the amendment proposed by the legislature on the statewide ballot. SJR 1 was approved by the Oregon Senate on June 21, 2013. SJR 1 was approved by the Oregon House of Representatives on June 28, 2013.[1]

Senate vote

June 21, 2013 Senate vote

Oregon SJR 1 Senate Vote
ResultVotesPercentage
Approveda Yes 20 66.67%
No1033.33%

House vote

June 28, 2013 House vote

Oregon SJR 1 House Vote
ResultVotesPercentage
Approveda Yes 34 57.63%
No2542.37%

Related measures

Voting on Education
Education.jpg
Policy
Education policy
Ballot Measures
By state
By year
Not on ballot


See also

External links

Support

Additional reading

Footnotes

  1. ↑ 1.0 1.1 1.2 1.3 1.4 Oregon Legislature, "SJR 1," accessed January 29, 2014
  2. ↑ 2.0 2.1 2.2 2.3 Oregon Opportunity Initiative
  3. ↑ Oregon Secretary of State, "SJR 1," accessed September 30, 2014
  4. ↑ 4.00 4.01 4.02 4.03 4.04 4.05 4.06 4.07 4.08 4.09 4.10 4.11 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source. Cite error: Invalid <ref> tag; name "quotedisclaimer" defined multiple times with different content Cite error: Invalid <ref> tag; name "quotedisclaimer" defined multiple times with different content Cite error: Invalid <ref> tag; name "quotedisclaimer" defined multiple times with different content Cite error: Invalid <ref> tag; name "quotedisclaimer" defined multiple times with different content Cite error: Invalid <ref> tag; name "quotedisclaimer" defined multiple times with different content Cite error: Invalid <ref> tag; name "quotedisclaimer" defined multiple times with different content Cite error: Invalid <ref> tag; name "quotedisclaimer" defined multiple times with different content Cite error: Invalid <ref> tag; name "quotedisclaimer" defined multiple times with different content Cite error: Invalid <ref> tag; name "quotedisclaimer" defined multiple times with different content Cite error: Invalid <ref> tag; name "quotedisclaimer" defined multiple times with different content Cite error: Invalid <ref> tag; name "quotedisclaimer" defined multiple times with different content
  5. ↑ Governing, "Will Oregon Be the First State with a College Trust Fund?" August 2014
  6. ↑ National Conference of State Legislatures, "TUITION POLICY AND PRACTICE," November 2008
  7. ↑ National Conference of State Legislatures, "SAVING FOR COLLEGE: 529 PLANS," May 22, 2014
  8. ↑ National Conference of State Legislatures, "PERFORMANCE-BASED FUNDING FOR HIGHER EDUCATION," March 5, 2014
  9. ↑ The Oregonian, "Oregon plan for tuition-free, loan-free university attendance an appealing concept, not a done deal," July 9, 2013
  10. ↑ The American Prospect, "Oregon Is Doing Free Higher Education the Right Way," July 3, 2013
  11. ↑ The Oregonian, "Free Oregon tuition through 'Pay Forward, Pay Back' is not so free, after all: Editorial," March 22, 2014
  12. ↑ and Fees by Sector and State The College Board, "Published Prices by State/Region," accessed August 1, 2014
  13. ↑ Daily Emerald, "Gov. John Kitzhaber’s revolutionary thinking in the funding of Oregon’s higher education," January 14, 2013
  14. ↑ Herald and News, "KCC, Oregon Tech presidents voice support, concerns for Measure 86," October 19, 2014
  15. ↑ 15.0 15.1 Oregon State Legislature, "SJR 1A Overview," accessed November 1, 2014
  16. ↑ 16.0 16.1 16.2 The Opportunity Initiative, "The Need," accessed July 29, 2014
  17. ↑ Oregon Secretary of State, "Measure 86 Campaign Finance," accessed December 1, 2014
  18. ↑ Oregon Secretary of State, "Statement of Organization for Political Action Committee: Oregon Opportunity Initiative PAC," accessed December 12, 2014
  19. ↑ Oregon Secretary of State, "Statement of Organization for Political Action Committee:: Yes on 86," accessed December 12, 2014
  20. ↑ Cascade Policy Institute, "Just Say No to the Oregon Opportunity Initiative," May 2014
  21. ↑ 21.0 21.1 21.2 21.3 21.4 Cascade Policy Institute, "Five Reasons to Oppose the State Treasurer’s 2014 Opportunity Initiative," January 16, 2014
  22. ↑ Portland Tribune, "Our Opinion: Measure 86 makes education a priority," October 2, 2014
  23. ↑ Register-Guard, "Higher ed endowment: Yes," October 4, 2014
  24. ↑ Mail Tribune, "Our View: Measure 86 would allow a prudent investment," October 7, 2014
  25. ↑ Skanner, "The Skanner News Elections Endorsements: Support These Measures on the Nov. 4 Ballot," October 16, 2014
  26. ↑ Portland Mercury, "It's the Mercury's Endorsement Guide! ," October 22, 2014
  27. ↑ Corvallis Gazette-Times, "Editorial: Despite flaws, student debt measure worth a look," October 21, 2014
  28. ↑ Statesman Journal, "Editorial: Despite flaws, student debt measure worth a look," October 23, 2014
  29. ↑ Albany Democrat Herald, "Editorial: College fund measure doesn't address the core issues," October 14, 2014
  30. ↑ Oregonian, "Measure 86, which aims to fund college grants, flunks risk test: Editorial endorsement," September 13, 2014
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