Oregon Voters To Decide Fate of Tax-Base Plan Next Week

By Nancy Mathis — May 10, 1989 4 min read

Next week, Oregon voters will decide the fate of a proposed constitutional amendment that educators say is a crucial step toward more equitable funding for public schools there.

The measure, which would raise property taxes in about a third of the state’s school districts, has the backing of major business interests and Gov. Neil Goldschmidt. But its proponents still call its chances of passage “iffy.”

“I wish I could be the eternal optimist, but I’m not sure,” said Verne A. Duncan, the state superintendent of education. Passage of Measure 1, he said, “is in the realm of possibility, but it will be tough.”

Submitted to voters by the legislature, Measure 1 would establish permanent, up-to-date tax bases in 100 of Oregon’s 303 school districts. The districts’ tax rates would be allowed to increase by up to 6 percent a year without voter approval.

At present, the 100 districts with4out tax bases must put levy requests on their ballots every year. In several instances, voters have rejected the requests, forcing a shutdown of schools.

Two years ago, Oregon voters approved a measure that created a “safety net” for districts whose levies were rejected. Under that law, districts are permitted to continue levying the same tax rate as they did in the previous year.

As an incentive for passing Measure 1, legislators adopted a companion measure that would offer relief to taxpayers in districts with high tax rates. The package would provide $112 million in tax relief, compared with the total tax increase for the 100 districts of $26 million, said Ed Grosswiler, campaign manager for Oregonians for Fairness in Education, a coalition of groups backing Measure 1.

Recent polls show a majority of Oregonians supporting the measure. But Mr. Grosswiler said the key to success will be voter turnout.

The campaign committee has calculated that in order for Measure 1 to win approval, 30 percent of the state’s voters will have to go to the polls in the special election. That is twice the usual percentage for such elections.

Officials also are counting on voter support in urban areas, where school districts already have tax bases and thus would largely be unaffected by the measure.

Mr. Grosswiler, an executive with Pacific Power and Light Company, said the campaign expects to raise about $450,000, most of it from businesses, to spend on television and direct-mail advertising.

Although there is no organized opposition to Measure 1, Mr. Grosswiler said the plan has two inherently distasteful aspects for voters.

First, he said, it would raise property taxes in some areas. And second, it is seen by some voters as a prelude to reviving the drive to impose a state sales tax. Oregon voters repeatedly have defeated attempts to enact such a tax.

Educators say they view the tax-base measure as a step toward alarger discussion of state tax policy and the equalization of school aid.

Raising state revenues was a major recommendation of Governor Goldschmidt’s blue-ribbon commission studying the school-finance system. That panel also suggested that legislators submit a tax-base amendment to voters this year, said R.L. Rose, executive director of the Confederation of Oregon School Administrators and head of the Governor’s panel.

“That will be the next debate--how to correct those inequities,” Mr. Rose said. According to state officials, the overreliance on property taxes to finance schools has resulted in wide funding disparities among districts.

“We have a system that is breaking down,” Mr. Duncan said, “and if we don’t do something about it, it will strangle us down the road.”

Robert Crumpton, executive secretary of the Oregon Education Association, praised business executives for their support of the constitutional amendment. But he added that many educators are afraid business will take a different stance when the debate turns to the broader tax questions.

“The business community perceives the tax base as stability, ergo all is well,” he said. “They have the mistaken impression that the other 200 districts are hunky-dory.”

Mr. Grosswiler, however, said business leaders do understand the need for more state aid for schools.

“I would say there is a need for both additional funding and balancing the revenue sources,” he said.

The utilities executive said he favors reconvening the Governor’s commission in a series of town-hall meetings to explain the funding dilemma to voters and determine the tax sources they would be willing to support.

For now, the promise of further dialogue on the subject may be small comfort to the 48 districts that have fallen into the financial safety net.

The Josephine County Unit4school district, a 900-square-mile system located in Oregon’s southwestern timberlands, may be in the worst financial shape, according to many. Its business manager, Kathy Krouse, said the district has $800,000 less in revenue than it did two years ago.

The district temporarily stopped all bus transportation for its 5,600 students, only recently resuming services for students living five miles or more from school. It has no physical-education, music, or art teachers, and has laid off 65 employees in the past two years.

If Measure 1 is defeated by voters, Ms. Krouse said, the district will have to cut another $1.9 million out of its $22-million biennial budget. Even if the measure is adopted, the district will still have to cut $133,000, she said.

In a recent survey by the state education department, Josephine County was one of eight districts found to have spent cash reserves to stay afloat--with educational quality remaining in danger.

State officials said they had to create a new category for the eight systems: “All Options Exhausted.”

A version of this article appeared in the May 10, 1989 edition of Education Week as Oregon Voters To Decide Fate of Tax-Base Plan Next Week