Budget & Finance

Oregon Rejects Tax Hike That Would Have Helped Schools

By Rhea R. Borja — February 05, 2003 2 min read
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After months of belt-tightening amid the state’s worst recession in 50 years, Oregon schools lost out on a potential infusion of $95 million when voters last week soundly rejected a proposal for a temporary, three-year increase in state income taxes.

Measure 28, as the tax plan was known, was defeated 55 percent to 45 percent at the polls on Jan. 28. The measure would have pumped an estimated $313 million into the state’s slim coffers by raising personal income taxes by half of 1 percent and corporate income taxes by a proportionate amount. The money would have bolstered funding for education, law enforcement, and social services.

School districts across the state reported last week that they were considering lopping days, and even entire weeks, off the school year. Other cost-saving measures under consideration included increasing class sizes and laying off teachers.

“Our weakest and most vulnerable populations are being impacted, and that includes children,” said Kristine Kain, the president of the 45,000-member Oregon Education Association. “We always liked to think that Oregon is a special place, but now we’re special for all of the wrong reasons.”

Opponents of Measure 28, however, hailed its defeat as a victory for taxpayers. Voters are tired of the government wasting their money, said Jason D. Williams, the executive director of the Taxpayer Association of Oregon, a group based in Portland.

“There’s been mismanagement to the tune of billions,” he said. “The people said, ‘Hey, we’re not giving you any more money. Stop punishing us for you not balancing the budget with fiscal restraint.’”

School Year Chopped

Oregon is striving to weather its worst economic downturn since World War II. As a result, the state’s $12 billion budget for fiscal 2003 has been cut by more than $1 billion—$273.2 million of that from K-12 funding. The effect is that the state’s school spending has fallen by 10.3 percent this fiscal year.

The 53,000-student Portland school district was in line to receive $9 million to help make up for deep cuts to its budget, which now stands at $342 million, if Measure 28 had passed. But now it may have to slash 24 days or more—up from 15 as had been earlier announced—from the school year.

“The rest of the country is going to question our commitment to education,” said Lew Frederick, the system’s public information director. “We cut to the bone years ago. Now we’re cutting off limbs.”

Oregon districts have been nipping and tucking their budgets for years. The passage of Measure 5 in 1990, which capped local property taxes, meant that school systems went from being financed primarily at the local level to mostly being dependent on the state. So now when the state’s economy heads south, school system budgets typically do, too.

Districts such as Salem-Keizer have established rainy-day funds to better cope with fiscal emergencies. Superintendent Kay Baker, who helps oversee a $17 million rainy-day fund for her 37,000-student district, said she has had to withdraw $11 million from the fund this year to shore up the district’s $239 million budget. Even so, Salem-Keizer has cut four days off the school year, and will likely make more cuts, she said.

“Everybody’s saying, ‘Now what do we do?’,” she said. “It’s been really hard.”

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