Schools chief sees no cuts in 2006-07.

Byline: Anne Williams The Register-Guard

With the financial news out of Salem growing rosier by the day, the Eugene School District will go into the 2006-07 school year able to avoid cuts, add some staff and services, and carry over a nest egg that's expected to swell to $15 million by this time next year.

In his budget message Monday, Superintendent George Russell said the past couple of weeks have brought welcome developments, including the Legislature's decision in last week's special session to earmark $42 million in unanticipated lottery funds to K-12 public education.

If predictions hold, the Eugene district would have enough reserves to forestall any cuts until the 2009-10 school year.

And that scenario could improve, too, depending on the economy and political will of the governor and Legislature. Gov. Ted Kulongoski announced over the weekend that, should he be re-elected in the fall, he'd recommend spending $6 billion on K-12 education in 2007-09, up from $5.26 in the current biennium.

But the budget committee's immediate charge is next year's spending plan, which includes a $134.4 million general fund, 5.7 percent bigger than the current year's. The total budget, which includes other funds such as capital, is $310.8 million.

The proposal is largely status quo, with a few embellishments whose net total is about $275,000.

For example, the plan covers a fourth administrator at North Eugene High School. The school is breaking up into three small, separate schools in the fall, and each of those will now have its own principal, with a single campus supervisor overseeing them all.

The budget also includes $125,000 for a new program offering incentive grants to high schools to pilot innovative reform efforts.

Although the district stands to lose the equivalent of more than 22 teaching positions to mirror a drop in enrollment, the proposed budget maintains more than half of those at the schools that most need help.

Besides the additional lottery funds, other factors improving the district's revenue outlook include higher local property tax collections and a lower-than-anticipated rate increase for the Public Employees Retirement System.

Craig Hawkins, a spokesman for the Confederation of Oregon School Administrators, said the Eugene district is in better shape than most, but that districts statewide are reaping the benefits of a sound economy and hot real estate market.

"I can't think of a district that I've heard of that's making cuts," he said. "That doesn't mean there aren't some out there, but I haven't heard of one."

He said that, for most districts, this year's extra cash will do nothing to restore deep cuts made over the last several years.

Most of the committee discussion Monday centered on the city's youth activity levy, which voters passed in 2002 to help the Eugene and Bethel districts fund music, physical education, librarians and athletics. Earlier this year, an Oregon Tax Court judge ruled that the levy violated the state constitution by exceeding voter-approved property tax limits.

The city has appealed the decision, and oral arguments in the case are scheduled for June 19.

Meanwhile, the district has some decisions to make, Russell said.

Because the assessor applies the levies in tandem under the property tax cap, the ruling has meant less money for the district not just from the city levy but also from its own, separate "local option" levy.

The district could either urge the City Council to place the city levy on the November ballot for renewal; place a second district local option levy on the ballot to try to recoup some of the losses from the city levy decision; or to hold off and tap reserves through 2008-09.

Russell said he thought it would be politically awkward to ask the council to renew the levy, given the district's predictions of a surplus next year.

Budget committee members appeared to agree. Virginia Farkas noted how confused most voters are already about the two levies, and said "just streamlining our message for our constituents" makes sense.

Due largely to the two tax levies, the Eugene district hasn't had to cut services since the 2003-04 school year.