Salem-Keizer lost $5 million in state funding this year because Oregon's school funding formula says only 13% of the district's students live in poverty. The state's own records show the real number is 42%.

That 29-percentage-point gap means the formula misses roughly two out of every three low-income students in the district, according to Oregon Capital Chronicle reporting in April.

Oregon is the only state in the country that relies solely on U.S. Census Bureau estimates to count poor students for funding purposes, according to an Oregonian investigation by reporter Julia Silverman, corroborated by Capital Chronicle reporting.

The undercount hit Salem-Keizer at the worst possible moment. Superintendent Andrea Castañeda had spent nearly a year restructuring staff to close a $23 million structural deficit when she learned on Feb. 20, 2026, that the district would lose an additional $5 million because of the poverty-data adjustment.

Three weeks earlier, she had publicly announced the deficit-reduction plan.

Castañeda did not publicly address the formula itself, but when the board adopted its $1.12 billion budget on June 9, she acknowledged the broader fiscal pressure: "We anticipate the coming years of K-12 funding in Oregon will be lean, and though we have made difficult spending reductions, we still have to rely on using our reserves."

The formula uses the Census Bureau's Small Area Income and Poverty Estimates, a blend of SNAP data, tax records, and statistical modeling that has been the legislative mandate since 2013.

The Oregon Department of Education has its own data set that matches each student with Department of Human Services assistance records and measures poverty at 130% of the federal poverty level, about $42,300 a year for a family of four.

By that state measure, 42% of Salem-Keizer students were experiencing poverty in 2024, up from 41% in 2023. The Census estimate moved in the opposite direction, dropping from 18% to 13% over the same period.

Mike Wiltfong, director of school finance at the Oregon Department of Education, told the Capital Chronicle that calls to drop the federal estimates have been ongoing since 2013. He said the constraint lies with the Legislature, not with his department's willingness to change.

If Oregon switched to its own data, Wiltfong said, the state school fund would need substantially more money, or districts would split the same pool among far more qualifying students.

Salem-Keizer is not alone. Greater Albany Public Schools lost $1.1 million in the same February 2026 adjustment. Woodburn and Hermiston each lost $800,000. Klamath County School District lost $750,000.

School board member Dr. Satya Chandragiri said in October 2024 that 85% of the district's schools qualify for Title I and called for differential funding to provide equal opportunity. The same Census estimates also determine how much federal Title I money flows to high-poverty schools, meaning the undercount squeezes Salem-Keizer from two directions at once.

The funding gap exists alongside persistent achievement struggles: nearly two in five Oregon fourth graders have scored "below basic" in reading on the National Assessment of Educational Progress over the past 25 years, and the state ranks near the bottom nationally in math and reading despite the Legislature allocating $11.4 billion for schools in the 2025-27 biennium.

Sen. Janeen Sollman, D-Hillsboro, and Rep. Ricki Ruiz, D-Gresham, led an unsuccessful attempt to overhaul the funding model earlier in 2026.

Legislative leaders signaled interest in revisiting the formula during the 2027 session, and Salem-Keizer educator Tyler Scialo-Lakeberg, president of the Salem-Keizer Education Association, was confirmed to the state's Quality Education Commission in June on a 16-12 Senate vote.

No specific bill or hearing date has been set for the 2027 session.