SALEM — Oregon lawmakers who want to spend $9.3 billion on schools over the next two years will have to find a big chunk of funding in the remaining days of the legislative session, after Gov. Kate Brown used a line-item veto to cut their appropriation from a savings account created to serve as a buffer against economic downturns.

With huge revenue windfalls predicted in the current and next biennium, plus $2.6 billion from the latest round of federal COVID aid, finding the money won’t be difficult.

Brown notified Democratic leaders in the House and Senate of her line-item veto Tuesday, June 15. It was the governor’s second veto this session, after she vetoed a motorcycle lane splitting bill citing public safety concerns.

The governor’s latest veto was not surprising. In mid-May, Brown raised concerns about lawmakers’ plan in a fiery letter in which she also questioned why they were boosting unrestricted school funding by hundreds of millions of dollars without making changes to reduce the opportunity gap for students historically inequitably served by schools, including low-income children and students of color.

In her letter June 15, Brown said that taking $200 million from the education stability fund would likely violate the Oregon Constitution because the state is doing well financially. She encouraged lawmakers to use other money to raise the state school fund for 2021-2023 from $9.1 billion to $9.3 billion.

The reserve account lawmakers wanted to tap is known as the education stability fund, and the governor noted in her letter that “the Oregon Constitution sets forth the limited circumstances in which the Legislature can access the principal in the (fund) — namely when the state is experiencing an economic downturn or facing some other emergency affecting school budgets.”

The Legislature already withdrew $400 million from the education fund during a special session last summer and as of mid-May the balance stood at $415 million, according to state economist Josh Lehner. Lawmakers did not use the withdrawal to increase the current $9 billion state school fund but rather to backfill anticipated declines in revenue including from income taxes.

Last summer, it was early in the pandemic and the latest state revenue forecast showed the state could face a $2.7 billion budget shortfall. Tax revenues turned out to be much stronger than predicted and the state is now on track to bring in $1 billion more than expected this biennium.

Lawmakers based their planned withdrawal from the reserve account on an opinion from the legislator’s top lawyer, Dexter Johnson, that they only needed one of the state’s quarterly revenue forecasts to predict at least a 2% drop from the May 2019 forecast on which the current budget was built — it did not matter if more recent forecasts showed a huge rebound, Johnson wrote.

Although the $200 million appropriation remained in the state school fund bill, Senate Bill 5514, lawmakers appear to have dropped their effort to actually withdraw money from the education savings account. The transfer is outlined in another bill, Senate Bill 226, and it has been sitting in committee without any action since May.

Republicans in the Legislature, who along with some Democrats have pushed for a $9.6 billion state school fund, seized on Brown’s line-item veto Wednesday.

“I’m surprised that the governor has decided to double down on a ‘cuts’ budget for K-12 students at a time when we need to do all we can to help our kids recover from a year defined by isolation and unprecedented learning loss,” House Republican Leader Christine Drazan of Canby said in an emailed statement.

Drazan has said the state should approve a $9.6 billion school fund, the level advocated by teachers unions and school district officials, to support a full return to in-person classes in the fall. Oregon schools are receiving $1.1 billion in the latest round of federal aid and also got federal COVID funds in 2020.

Brown and legislative budget writers originally proposed a $9.1 billion state school fund, slightly higher than the amount legislative analysts said was necessary to maintain current services and programs. District and union officials questioned aspects of that analysis, saying it underestimated their costs. At the same time, some of the districts that could face layoffs in 2021-2023 are set to receive a proportionally smaller state funding allocation because their student enrollment consistently declined.

The governor’s deputy communications director, Charles Boyle, said Brown agrees with lawmakers who want to raise the state school fund to $9.3 billion.

“Conversations are ongoing about how school funding can be used equitably to benefit students disproportionately impacted by the COVID-19 pandemic and historic disparities,” Boyle wrote in an email. “The governor remains committed to continuing to work closely with leaders of communities of color, legislators, and education leaders to take concrete steps to further equity in K-12 education this year.”