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Schools seek to make tax palatable .

New drive touting local levy for education would have strings

Education advocates say tens of millions of dollars will be needed in 2004 to prevent from finally happening what's been building for years: the middle-class abandonment of the Portland school district.

But the money Ñ derived from some form of increased local taxes, if it comes at all Ñ will almost certainly have strings attached.

City and county leaders emerged from a two-hour session with Portland Mayor Vera Katz on Monday continuing to push an idea that has gained lightning-speed momentum during the last few weeks: New local taxes Ñ possibly an increase in business payroll taxes Ñ would be used to supplement the budgets of K-12 public school districts in Multnomah County.

The tax concept is being pushed as local school districts struggle with state budget cuts, and as the Portland district faces a $50 million budget deficit that could lead to five weeks being cut from this year's school year.

But the city and county leaders, along with education advocates who back the payroll tax idea, say any extra local money for schools should come with conditions Ñ including that school districts spend the money only in certain ways, and that schools show results in how the money helps educate children.

'There's broad agreement É that you've got to link performance goals and some clear accountability measures to the school funding mechanism,' said Cynthia Guyer, who is head of the nonprofit Portland Schools Foundation. She has been part of the group studying possible local funding for schools in the wake of severe state budget cuts to education.

'(That) would É address people's concerns about golden parachutes, bloated administration budgets, central offices that have remodeling and new carpeting' Ñ all criticisms of Portland's school district spending during the last several years.

'The goal is to come up with a plan that school parents, elected officials and the business community can all agree on,' said city Commissioner Jim Francesconi. 'Part of that plan is to make the schools more fiscally accountable so that everyone can be assured any new money will go directly into the classrooms.'

Even with such accountability ideas, however, the new local taxes are nowhere near certain. Most advocates suggest the local taxes should kick in only if the Legislature doesn't 'adequately' fund K-12 education during the state's 2003-2005 budget cycle.

Taxes back on table

State Rep. Lane Shetterly, R-Eugene, chair of the House Revenue Committee, says the Legislature is seriously looking at placing a proposed constitutional amendment on the May 20 ballot to allow local school voters to raise more property tax dollars for their schools.

According to Shetterly, the proposal would raise the maximum amount of money that voters could approve for their districts by $2 per $1,000 of assessed value.

Monday's meeting at Portland's World Trade Center came after two weeks of public twists and turns on the idea of increased payroll taxes for education Ñ an idea that seemed to run head-on into the Portland Business Alliance's hopes for reform of local business taxes.

PBA lobbyist John Rakowitz said reform of business taxes Ñ including a shift from a tax on business profits to a business payroll tax Ñ can move forward along with consideration of a local tax for education.

But there will undoubtedly be other opposition to any increases in local taxes.

As the Legislature dealt with almost unprecedented state revenue shortfalls last year, education advocates and some local leaders began talking about ways local government might supplement funding for local schools Ñ which get about 70 percent of their money from the state budget.

The talk became more serious and more public after the recent release of Gov. Ted Kulongoski's proposed biennial budget and Oregon voters' rejection of a temporary state income tax increase last week.

The defeat of the temporary income tax hike worsened school district budget deficits this year, and Kulongoski's budget proposal suggested to school districts that they couldn't expect much more from the state during its 2003-2005 budget cycle.

The result has been near-panic among education advocates and parents, especially in the Portland school district Ñ the state's largest.

Parents want out

Tight district budgets during the last couple of years have increased class sizes and forced other classroom cuts. But the school day cuts this year Ñ and class sizes that could reach 36 students per teacher or more next year Ñ have forced many parents to begin sending applications to private schools or explore moving out of Portland entirely.

'You can't believe how many calls are coming in to us,' said Bobbie Regan, the parent of two kids in Portland schools and a leader of a new parent group pushing for local taxes for education.

'People are desperate,' Regan said. 'I can't tell you how many parents have bailed or are looking to bail. Many people have completely lost any optimism that things are going to turn around.'

Unlike in most cities in the nation Ñ where middle-class flight to private schools and to the suburbs long ago crippled city school districts and decimated inner cities Ñ the Portland school district has been able to keep most of its middle- and upper-middle-class families in district schools, and in the city.

But the district began losing some of those families in recent years.

That trend is now in danger of snowballing by next fall, district advocates say. 'Once you lose the middle class and upper-middle class, you're going to lose a whole bunch of other investments in our public schools,' Regan said.

That fear is why education advocates say they need to push for local government help before the end of this school year.

'I think people in Portland and the metro area need some assurance that they're going to have quality schools to go to next year,' said Portland Superintendent Jim Scherzinger. 'Because they are looking at other alternatives.'

Jim Redden contributed to this report.