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Oregon Voters Defeat Proposal To Create Tax Bases

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By an overwhelming 3-to-1 margin, Oregon voters last week rejected a proposed constitutional amendment that would have provided about a third of the state's 303 school districts with permanent, up-to-date taxing authority.

Almost immediately after the amendment's defeat, a former member of the Congress who is legal counsel to a group of school districts announced that a decision would be made soon on whether to file a suit challenging the constitutionality of the state's school-finance system.

The existing system, which provides only about 25 percent of districts' revenues, so perpetuates local budget inequities that it may violate the state constitution's mandate for a uniform system of education, said former U.S. Representative Charles O. Porter, who practices law in Eugene.

State Representative Bruce Hugo, chairman of the House education committee, agreed with Mr. Porter's assessment. "We're becoming a state of the rich getting richer and the poor getting poorer," Mr. Hugo said.

Oregon educators had called Measure 1, the defeated amendment, a crucial step on the road to school-finance reform.

Currently, about 100 of the state's districts do not have permanent property-tax bases and therefore4must put levy request for operating expenses on their ballots each year. Voters have rejected such requests more than a dozen times in the past decade, forcing their local schools to shut down.

In 1987, voters approved a constitutional amendment creating a stop-gap "safety net" for such districts. That law allows districts whose levies have been defeated to assess taxes at the previous year's rate, but it forbids increases above those levels. About half of the 100 districts have fallen into the safety net.

Measure 1 would have given all 100 districts permanent taxing authority and permitted them to increase their rates by 6 percent a year without voter approval.

As an incentive designed to win approval of the amendment, the legislature passed a companion bill that would have provided $112 million in property-tax relief. The tax breaks were contingent on Measure 1's adoption.

Representative Hugo said the $112 million will probably now be used to supplement the state's education budget.

The tax reforms called for in Measure 1 were originally proposed by a blue-ribbon panel appointed by Gov. Neil Goldschmidt. The Governor personally campaigned on behalf of the proposal, but officials said he was bucking state history and8strong anti-tax sentiment.

Mr. Hugo noted that the safety-net amendment was the only one of more than 20 school-finance proposal approved by state voters in the past 30 years.

From a historical perspective "there was no reason to believe" that Measure 1 would be passed, Mr. Hugo said last week. "It's terribly frustrating."

State Superintendent of Public Instruction Verne A. Duncan attributed the defeat to the public's reluctance to increase local property taxes.

"It appears that the general public does not really consider this an education issue. It is a pocketbook issue," the superintendent said.

Many of the state's citizens, he added, say, "'Sure, we want good schools, but do not raise our taxes."'

The measure had faced little organized opposition. Proponents, meanwhile, had mounted a sophisticated campaign supported by Oregon's business and education interests.

Mr. Porter, the lawyer for the districts considering a lawsuit, said that even if the measure had won approval, it would have done little to resolve funding inequities among districts.

Because of their heavy reliance on property taxes, districts are at the financial mercy of their local property wealth, Mr. Porter and others contend. Wealthy districts can outspend property-poor districts, they say, and the state fails to provide enough money to close the gap.

Mr. Porter noted that he had filed a suit challenging the finance system 15 years ago, but lost the case before the state supreme court.

He said the odds of winning were now greater because spending disparities have increased dramatically in the intervening years and because of changes in the high court's membership.

Mr. Porter said he and two other lawyers who represent the districts, which belong to a group called the Equity Coalition, have been contacting prospective plaintiffs.

"I anticipate it will be brought by administrators, parents, and children from a great number of districts," he said.

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