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Published in Print: March 17, 2004, as State of the States

State of the States

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Oregon Governor's Upbeat Speech Silent on State's School Aid Woes

State of the States A month after Oregon voters rejected the second tax proposal in a year—plunging the state into yet another budget shortfall—Gov. Theodore R. Kulongoski gave a determinedly upbeat take on the fiscal future in his second State of the State Address.

School advocates, though, had hoped for more in the March 5 speech, delivered before a civic group in Portland.

Mr. Kulongoski, a Democrat, highlighted the addition of more than 1,000 jobs in the Beaver State, touted a modest, $120 million revenue spike during the last quarter, and pointed out ways state agencies are becoming more cost-efficient, such as by merging data and network centers.

He also asked that the legislature back a fund for higher education that would allow pay for the tuition costs of qualified high school seniors who want to enter a state community college or university.

"In recent years, the higher education tank in Oregon has been running close to empty," he said. "We need to get higher education off this downward spiral and start moving forward again."

Yet he did not offer any concrete ideas to close the $545 million gap in the fiscal 2005 budget from Measure 30's failure last month, most of which will be borne by K-12 schools. ("Ore. Rejects Budget Plan for Schools," Feb. 11, 2004.)

The governor also did not offer ways to ensure that schools are financially protected in economically hard times, despite saying in his speech, "As long as I am governor, the children of this state will continue to go to the head of the line."

More than 100 Oregon school districts closed their doors early last year, laid off staff members, and cut programs because of ongoing revenue shortfalls. Districts are again looking at shaving their academic year because of voters' defeat of Measure 30.

The measure called for a temporary personal income tax surcharge and would have increased the corporate minimum tax and other taxes to raise $284.6 million for schools and $258 million for social services.

The lack of ideas to shore up schools disappointed some, such as John Marshall, the legislative- services director of the Oregon School Boards Association, based in Salem.

"It seems to us in the education community that he's put all of his eggs in the economic expansion basket ... instead of using this as a teachable moment to fix the tax structure," Mr. Marshall said of Gov. Kulongoski.

'A Rough Place'

Oregon, which lacks a sales tax, relies heavily on its personal income tax, its largest source of revenue. Consequently, when jobs disappear and unemployment rises, Oregon's economy suffers a heavy economic burden. "When people are laid off, the tax revenue stops," Mr. Marshall said.

In addition, the passage of Measure 5 in 1990 capped local property taxes, meaning that school systems went from being financed primarily at the local level to getting most of their aid from the state.

Mr. Marshall, noting that the governor won the 2002 gubernatorial election by a slim margin, contends that Mr. Kulongoski is too timid in his support for Oregon schools—especially now, with the demands of the federal No Child Left Behind Act in place.

"He doesn't seem to be willing to take the political risks inherent in a forceful and aggressive leadership," Mr. Marshall added.

Kristine Kain, the executive director of the Portland-based Oregon Education Association, the state's largest teachers' union, cut the governor a little slack. She said she appreciated his positive outlook and his statement about the need for a strong public education system.

But Ms. Kain added that he doesn't have any time to waste. She pointed out that Oregon has some 2,000 fewer teachers compared with a few years ago, in large part because districts aren't hiring new teachers when older teachers retire or otherwise leave the profession.

"I know the governor's in a rough place," Ms. Kain said. "But quality education is an economic engine for growth. And to let that continue to suffer doesn't make good [fiscal] sense."

Vol. 23, Issue 27, Page 34

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