Supporters, foes debate whether tax plan digs deeper hole for district

The Portland school district has been here before. In fact, it's been here for much of the last decade:

City and county leaders frantically pledge millions of dollars, or push through local tax increases worth millions of dollars, to help plug gaping holes in the school district budget. At the same time, local leaders maintain the help is only temporary, until the state Legislature comes to its senses and 'adequately funds schools.'

Now, it's happening again.

But this time, city and county income and business tax proposals for schools make all previous infusions for schools Ñ infusions that have come every year since 1994 Ñ look like bake sale proceeds. The current proposals could bring $80 million or more per year to local school districts, including $40 million or more per year to the Portland school district, for two to four years.

City and county leaders hope to decide on one specific proposal in the next week or so, and probably will refer all or most of the proposal to county voters by May or June.

But whatever the proposal, the underlying hope is the same as in previous years: that the state eventually will rescue Portland and Multnomah County from having to do this again.

Some are suggesting that hope is misplaced, just as it was in the past. And they suggest that one-time local infusions only keep the Portland school district, especially, from dealing more directly with its budget realities.

'Once again, Portland (Public Schools) is falling back on its old routine of relying on one-time or short-term monies,' said Tony Larson, a Portland Public Schools parent and head of a citizens committee that oversees the Portland school district budget. 'You still need to act like every other household in America: matching expenditure levels with known or likely revenue streams.'

Still, others Ñ especially Portland school district leaders and parent activists Ñ say that this time might be different, that a three-year local 'bridge' to better state funding might actually find a state bridge support on the other end.

They expect no major changes in the state's tax structure or its school funding formula for the next couple of years, but they suggest changes seem likely by 2005 or 2006. That's because, they say, unlike throughout the 1990s, many more state school districts are beginning to have significant budget problems.

'That's what's different, where the other districts are,' said Portland Superintendent Jim Scherzinger. 'They are at a much lower level than they were when we were getting this temporary funding before.

'Eventually, people will figure this out. They'll figure out what this level of (education) funding means.'

In the meantime, the proposed two to four years of local support is vital to end the Portland school district's continual budget cutting, Scherzinger and other Portland district advocates say.

'We'll have to continue to work at a statewide solution,' said school board member Julia Brim-Edwards. 'But in the meantime, our kids aren't going to be held hostage to inaction at the state level.'

No one is assuming, of course, that voters will approve any local tax proposals referred to them. Even advocates acknowledge that the proposals won't pass without a tough political fight.

A privately funded poll conducted for school advocates and local leaders in January showed that while most Portland voters thought the school district's budget shortfall was 'very serious,' many also faulted the district for its money management, according to a copy of the poll obtained by the Tribune.

And several business owners already have formed a political action committee to fight any local tax increases.

But Larson and a few others worry about a different problem: If the new local taxes are approved at the level some are hoping for Ñ $40 million to $60 million per year for the Portland district through the 2005-2006 school year, for instance Ñ special local funding will make up a suddenly very large part of the school district's budget. Those new local taxes would be added to the $15 million the district is receiving yearly through the 2005-2006 school year from a property tax levy voters approved in 2000.

That's a lot of money that people are expecting new state revenue to replace in 2006, Larson said.

Under the current state school funding structure, total state revenue would need to increase by about $3 billion in the ensuing two-year budget cycle to fill even a $55 million hole in the Portland district's budget.

'They're wrong in assuming the state will be able to come up with additional resources,' Larson said of tax advocates, adding that the school district's recent contract settlement with teachers only exacerbated the problem by not limiting what the district pays for teachers' monthly health insurance premiums.

Still, other Portland district advocates say that three years of local funding would give school advocates time to bring about significant changes in how the state pays for schools Ñ changes they believe will happen.

'The (education funding) collapse is so great, so wide, so pervasive, I think the pressure will be there,' said Kathie Humes, a Portland parent and longtime advocate for more state education funding.

Sen. Kate Brown of Portland, the Democratic Senate leader, said she thinks the Legislature will reform the state's tax system and its education funding. 'We have no other options. We can't afford not to reform our tax system,' she said.

In the meantime, Portland district advocates say, the three years of temporary funding would give district leaders time to reanalyze the entire district budget and address such things as burgeoning health care expenses.

'I think three years is three years of stability. That gives the new school board, our friends at City Hall and the county commissioners and groups like the Portland Schools Foundation É a chance to get at some of the issues people want to work on, (including) a new way at looking at the budget,' said Cynthia Guyer, executive director of the nonprofit Portland Schools Foundation.

'To have three years of stable funding will be something the district hasn't had since 1994,' said Scherzinger, who was the district's chief financial officer before becoming interim superintendent and then superintendent last year. 'It will feel permanent Ñ just to have three years of it. I think this is a good bridge and foundation for moving forward.'

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