Measure 91: Polk County schools and children would pay for seductive proposal.

POLK COUNTY -- It would be like cutting Henry Hill Elementary School.

That's how much money the Central School District stands to lose if Oregon voters want to fully deduct their federal returns on their state income taxes.

The week after Halloween is going to be very scary for Oregon schools. In Polk County, ballot measures threaten to slash millions from school budgets.

Measure 91 casts a particularly ominous shadow.

"It would absolutely devastate our district," said Bill Layton, the principal at Monmouth Elementary School.

The measure, sponsored by anti-tax crusader Bill Sizemore, would allow Oregonians to deduct their federal returns on their state income taxes.

Central Superintendent Forrest Bell estimates it would mean cutting the district's $15 million budget by $1.6 million. "This is a huge impact for a district like ours with limited resources," Bell said.

Finding places to cut would be difficult.

Programs like special education and English as a second language are required by the state and federal government. They'd have to be spared.

"What we would have to cut are our programs near and dear to the community," Bell said.

That might include sports, music and other extracurricular activities. Bell doesn't want to get specific. "We won't make those kinds of decisions until it becomes necessary."

The Dallas School District would face cuts just as deep. Superintendent Dave Voves said Measure 91 would cost Dallas schools $1.5 million -- or 7 percent of the district's general fund. Currently, the district gets $4,800 per student in state money.

That would be slashed by $455 per student.

The cuts would be ugly, Voves said. "You're talking a bunch of programs and teachers."

And it would only get worse.

The cuts would grow to $2.3 million during the next budget year -- or 11 percent of the district budget.

Those are all just estimates. They assume the Legislature would cut education proportionately with all other state spending. They also assume that the formula for calculating state funding for schools would remain the same.

Oregon schools get 80 percent of their funding from the state. That makes them particularly vulnerable to measures designed to curb state spending.

Actually, Voves said, Measure 91 is not as scary as Measure 8. That measure, drafted by Sizemore cohort Don McIntire, would limit the growth of state spending to 15 percent per year.

That would slice the state's general fund by $4.8 billion. For Dallas schools, Voves said, that would mean more than $3 million in cuts.

Again, just an estimate.

A lot depends on how the Legislature deals with measures tossed in its lap. "I have no idea how the Legislature will handle it," Voves said.

"If we have to cut $3 million, there's obviously going to be a lot of programs going down the road."

Times are already tough for Oregon schools.

Gov. John Kitzhaber has told school superintendents to brace for big budget cuts, regardless of what happens in November. State government is looking at a $750 million deficit.

That's 6 percent of the total general fund or, if education is somehow spared, 11 percent of the total general fund.

No matter what, budget committees and school boards are going to have such hard decisions to make.

Voters might just make those decisions a lot harder, Bell said.

Measure 91 is one big mess, said State Rep. Lane Shetterly of Polk County.

He may be one of the legislators who has to sort out the mess.

"There are several questions about the implementation of the measure," Shetterly said. "The Legislature would take a stab at trying to implement it, but the questions may be unanswerable.

"It might be referred to voters again."

Among other issues, the measure doesn't state when it would become effective. It might become effective retroactively. Or might not take effect until next Jan. 1.

It is a sloppy piece of work, Shetterly said. "Why would we pass a law we know is unclear as to such an important piece of information?"

Sizemore does himself few favors proposing such ambiguous measures, said Shetterly. "You may like the intent of the measure, but the fact is that it so poorly written that it doesn't deliver the goods."

Measure 91 may well deliver the goods for big business.

It would provide the biggest corporate tax break in Oregon history. State income taxes for corporations like Intel, Nike and Willamette Industries would be cut by one third -- an average of $150 million every year.

Critics say taxes in Oregon have already been shifting from businesses to households in recent years. In 1979, businesses paid 49 percent of the taxes in Oregon. In 1998, businesses paid 39 percent.

Opponents of the measure also warn that the measure would weaken corporate income tax to the point where it would not be worth collecting anymore.

Sizemore says he doesn't care about the effect his measure has on corporate taxes. He just wanted to word the measure as simply as possible, he said.

However, Sizemore says tax breaks for corporations can only improve the business climate in Oregon.

Executives for the corporations themselves disagree. Leaders of the high-tech industry have contributed $150,000 to fight Measure 91.

That seems strange.

Intel would save $20 million a year. Intel employs 72,600 people and is the biggest manufacturing employee in the state -- paying $4.5 billion in payroll and paying more than $155 million in corporate taxes in 1999.

Nonetheless, Intel executives say Measure 91 would gut the public school system and erode their ability to hire and retain qualified employees.

Business leaders also fear the Legislature will look to them to replace the money lost the ballot measure.

Corporations would be one of the few to see any actual savings from the measure, Shetterly said.

Measure 91 would likely wipe out any surplus taxes. Oregonians would no longer get an annual "kicker." In fact, the average taxpayer would have to make more than $50,000 to see the first penny of a tax break.

Only people with six-digit incomes reap any real savings, according to figures from the Legislative Revenue Office.


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