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Passage of Property-Tax Limit Concerns Ore. Educators

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The narrow passage of a property-tax limit in Oregon has educators confused and concerned about how it will affect school budgets.

The measure, which calls for an immediate 20 percent decrease in property taxes statewide, will leave a $1 billion hole in local tax revenue over the next two years, according to state officials. About $400 million of that would come from local funding of schools.

The tax-limit vote Nov. 5, which was not decided until absentee ballots were counted, leaves the state legislature the job of trying to make up for the losses with state funds sometime next spring.

Lawmakers could use state funds to even the local losses in Oregon's 220 school districts, add to the funding the state allocates based on the number of students in a school, or find a way around any school cuts at all.

The state constitution and the measure itself both stipulate that education and public safety will be given top priority when state officials start to hedge against cuts.

"In the short term, it will have a dampening impact, but it's not catastrophic," said Terry Drake, a research economist at the Oregon education department.

He added that the state anticipates a budget surplus of $300 million to $400 million in the current fiscal year. But schools will have to compete with police and fire departments--other losers in the tax-limitation vote--for the surplus.

A spokesman for Democratic Gov. John Kitzhaber said the state will "do the best it can" to help schools compensate.

More than half of the budget surplus will likely go to public schools, said Bob Applegate, the governor's press secretary. The governor's office will also work with local governments on ways to cope with the losses, he said.

Follows 1990 Measure

With almost all of the Oregon votes counted, about 52 percent of the voters favored the measure.

This year's tax-limit plan, known as Measure 47, follows a similar initiative known as Measure 5 that was passed in 1990 and revolutionized school funding in Oregon. The 1990 initiative limited local property taxes to 1.5 percent of property value, and required the state to make up for any funds lost by local governments. Measure 47 will work on top of Measure 5.

Since 1990, the state has taken on much of the funding for public schools. Before 1990, about 70 percent of school funding was paid for by local governments. This year, the local share is about 30 percent.

How much schools will be affected by Measure 47 depends greatly on how much they still rely on local funds, said John Marshall, the director of legislative services for the Oregon School Boards Association.

"We know the impact of 47 will affect each of the 220 schools districts differently," he said.

Schools will also have to wait and see how another ballot item will affect them. Voters also approved an amendment that will require state lawmakers to fully pay for any program they require local governments to provide.

Even before the legislature starts its work, the Portland school district--one of the districts hardest hit by the 1990 vote--is in no mood to talk about further cuts.

The 58,000-student district has already suffered too many cuts in funding and administration and simply cannot cut anymore, Lew Frederick, a spokesman for the district, said last week.

Over the past six years, as funding steadily declined, Portland administrators cut more than 1,100 teaching positions and eliminated a vice principal's position at each school. The district now has no curriculum department, and classes in some high schools are swelling to 40 students, according to Mr. Frederick.

"We're down to the point of corporate anorexia," he said. "We cannot continue to offer services at this level."

Portland's $321 million budget for this school year is more than $27 million shy of what Mr. Frederick says the district needs to offer an adequate education.

"We're telling the state legislature that if you want an adequate education, then this is how much it's going to cost," he said.

Last year, parents and Portland residents organized a march that brought out 30,000 people in support of public schools. The "March for Our Schools" raised enough money to pay the salaries of 200 teachers who otherwise would have been laid off due to cuts.

Many observers worry that while lawmakers might be able to minimize cuts, the effects of the tax limit will be hard to avoid.

"What you're going to get is a slow erosion of funds for all social programs, including education," Mr. Drake said. "It's like a cancer."

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