City staff shape tax proposals.

Byline: ANNE WILLIAMS The Register-Guard

A staff consensus is emerging on a proposed November city tax levy that would generate about $8 million per year and cost taxpayers around $1 per $1,000 of assessed property value to aid the financially ailing Eugene and Bethel school districts.

Barb Bellamy, spokeswoman for the Eugene School District, said staff from all three agencies met late last week to talk about what the levy might look like, and what the money could buy.

Before briefing the school board Monday on the staff discussions, Bellamy said, officials would prefer to see state lawmakers come up with a stable, adequate school funding source that would forestall the need for such a levy. But that doesn't appear to be on the near horizon.

"We see this as a stopgap measure," she said. "We see it really as building on the partnership we already have in terms of what the city and the district do together."

Nothing is final. The city staff has yet to come up with specific options for a July 24 City Council work session. The council, which voted 6-2 last month to pursue levy planning, is to vote on the matter Aug. 12.

Some of the money raised - about $1.75 million under the sample scenario - would be used to pick up where a two-year city property tax levy for after-school programs leaves off. Passed in November 2000, the measure provided grants to school districts, nonprofit agencies and other community groups that already offer youth programs.

The remainder would be divvied up between the Eugene and Bethel districts, possibly on a per-pupil basis, but more likely according to assessed value, Craig Hawkins, spokesman for the Bethel district, said.

"It's a real simple message: The money that you pay here goes for your schools," he said. "That's got to make sense for voters."

Under that scenario, the Eugene district would likely get about $5.6 million of an $8 million levy, Bethel a little over $1 million.

Mayor Jim Torrey has been championing the levy idea since January. It gained momentum in recent months as districts all over the state cut spending in response to a recession-driven state budget shortfall.

The Eugene district has had to plug an $8 million hole in its 2002-03 operating budget. In Bethel, the gap was about $670,000.

In a special session that ended Sunday, the Legislature crafted a budget that restores some funding for schools in 2002-03, but also counts on passage of a September measure that would take $150 million from an education endowment fund to stave off cuts next fall. State voters rejected a similar measure on the May primary election ballot; if that happens again, school districts could face deep additional cuts.

Under the Measure 5 property tax limit passed in 1990, Bethel and Eugene could only use the levy money for staff and programs outside the area of core instruction. For example, it could pay for athletic programs, but not math teachers. However, by freeing up general-fund dollars now going toward those activities, the districts could restore lost classroom teaching positions.

Legally, the districts believe, they could spend the new money on music and physical education teachers, counselors, librarians and nurses as well as on sports and other student activities.

The model for the levy comes from Ashland, where city voters have pitched in for schools since 1994. Twice renewed by voters, the Ashland measure generates about $1.6 million a year for athletics, debate, drama, music, physical education and other activities under a contract between the district and the city's recreation department.

Portland, Lake Oswego and Multnomah County have recently provided tax dollars to their schools through various means.

In response to concerns from the City Council, the staff will find out exactly how many Eugene and Bethel students live outside city boundaries but within district lines. Both districts estimate it's somewhere between 10 and 15 percent. The levy could require those students to pay a higher participation fee for sports and other activities, given that their parents don't pay city taxes.

That issue could be resolved - and rural school districts could get help, too - if Lane County, rather than the city, were to float the levy. But County Administrator Bill Van Vactor said there's been no formal discussion of such a possibility among county commissioners, and no urging from school districts.

Bellamy noted that Lane County is helping the Bethel district with costs for new school construction through its road fund, which the Eugene district may also look to as it starts building new schools.

At its meeting Monday, the Eugene board passed a motion encouraging the City Council to proceed with a plan.

"I'd just like to say that it's nice to see this moving along at a time when we needed a little light," Chairwoman Jan Oliver said.