Baker School District considering tax levy to bolster budget

By Jayson Jacoby / The Baker City Herald

By CHRIS COLLINS

Baker City Herald

This month the Baker School Board will begin considering ways to raise additional money to maintain programs, including the possibility of asking voters to approve a property tax increase in the May election.

Superintendent Walt Wegener said in an interview at his office earlier this week that he will recommend that the school board take the tax measure to voters this spring.

The measure would raise up to $725,700 per year in new property taxes over the next five years to bolster the district's general fund.

Without that money the district would have to eliminate jobs to balance its budget, Wegener said.

The $725,700 figure represents salary and benefits for 14 teachers,

although cuts would across the board, including supplies and materials,

and not limited to teachers and other staff, he said.

"The state Legislature has left us with no option but to ask people to tax themselves to support their schools," Wegener said.

The board probably will not decide until its March 8 meeting whether to put a tax levy on the ballot, Wegener said.

March 17 is the filing deadline in order to qualify for the May 17 election.

A simple majority of voters would be required to pass the issue, according to the County Clerk's Office.

The levy would not be subject to Oregon's "double majority" law, which

requires for some tax increases both that a majority of voters approve

the measure, and that more than half the eligible voters return their

ballots.

"The board is very tentative," about raising taxes, Wegener said.

"We've really been backed into a corner we don't want to be backed

into."

Damien Yervasi, board chair, declined to comment on the tax plan

Thursday. He said he would have more to say about any potential

revenue-generating plans or spending cuts after the board's February

meeting, when directors will have more information about long-term

planning.

If proposed by the district and passed in the May election, the local

option tax would be added to the 2011-12 tax bills of county residents

who live within the Baker School District boundaries, Baker County

Assessor Kerry Savage said.

There is no simple formula to determine how much would be added to each

taxpayer's property tax bill if the measure were to pass, Savage said.

The amount is different for each property owner based on real market

value, assessed property value and what's known as "compression."

Ballot Measure 5, passed by Oregon voters in 1990, put a limit on

property taxes through compression. Under the law, property owners pay

a maximum of $5 per $1,000 of real market property value to support

education.

Baker School District property owners pay a portion of their tax bill

to support the 5J School District, the Union-Baker Education Service

District and Blue Mountain Community College to that maximum rate of $5

per $1,000.

Taxpayers who are at the maximum $5 rate - under compression, as it

were -will not see their property taxes rise if voters pass a 5J tax

measure.

Property owners who are below the $5-per-$1,000 compression ceiling

would pay more. How much more would depend on each property owner's

circumstances, Savage said.

(The chart on Page 1A explains the calculations property owners can use to estimate how much they would pay.)

Also, the actual cost to property owners will fluctuate based on each

year's assessed value, which in most cases increases at a rate of 3

percent per year, and real market value, which Savage said probably

will fall slightly in the coming year, as it did the previous year.

Farm or timber properties with special assessments would see taxes

increased based on their Ballot Measure 5 special assessments to the

compressed $5 per $1,000 rate, Savage said. Some of those property

owners also would not see their property taxes increase because they

already are paying the maximum rate.

In addition to considering ways to raise revenue, the board also will

be discussing plans for reducing school district operations, Wegener

said.

"We'll ask the board for a target number for cuts and then the

administrative team in January and February will gather information

about what it looks like to shrink the district," Wegener said. "We've

maintained a system that might be a little larger than we can afford."

Discussions will include the possibility of a wide range of reductions,

including a four-day school week, and trimming staff and other expenses.

"We're going to be looking at ways to sustain excellence even if we

have to make cuts," said Doug Dalton, the district's chief financial

officer.

Gov. John Kitzhaber, who begins a new four-year term this month, has

announced a budget that calls for a 6 percent cut to education. If

adopted by the Legislature, that would mean a revenue reduction of

$850,000 to the Baker School District.

Combined with the loss of federal stimulus money and forest payments

and a 6 percent increase in Public Employee Retirement System

contributions, school district administrators will be contemplating

cuts of between $1.5 million to $2.3 million in the 2011-12 year.

Dalton said the district's administrative team will work to create a

strategic plan based on a five-year financial forecast that looks at

future challenges.

Dalton said enrollment projections also will be taken into account. The

state gives school districts money through a formula based on

enrollment, at a rate of about $6,000 per student.

Therefore, more students equals more state dollars for Baker schools.

But because of a downturn in the economy, local student numbers have

continued to drop as families leave the community to look for work

elsewhere. Wegener and Dalton said economic development that would

create new jobs could help reverse that trend.

Maintaining high academic standards and award-winning extracurricular

activities, such as a state championship football team, also help the

district recruit students who might otherwise choose private school or

home-schooling programs or transfer to other districts.

Donations and grants also could help bolster district revenues.

State money accounts for 65 percent of the Baker School District's

general fund, with property taxes making up another 24 percent. Federal

forest payments added 1 percent; stimulus money, 4 percent; beginning

fund balance, 2 percent; ESD, 3 percent; and other revenue, 1 percent.

The district's greatest general fund expense - 70 percent - goes to paying its employees.

"There's so many 'what ifs' out there that we are totally waving in the wind," Wegener said. "But we're going to be prepared.

"We'll do the best we can to keep (the cuts) as far away from kids as possible," he said.

The school board will meet on Jan. 18 to continue the discussion about the budget.

A work session will start at 5:15 p.m. that day during which directors

will discuss the possibility of changing to a four-day school week. The

regular meeting will begin at 6 p.m. Both meetings will be at the

District office, 2090 Fourth St.

The board will begin setting funding priorities at its February meeting

prior to budget committee meetings this spring, Dalton said.

13109128
The Baker City Herald
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