SCHOOL DISTRICT FIGHTS FOR MONEY
January 16, 2001 11:00 pm
State Sen. Ken Messerle ().
State Sen. Ken Messerle ().

Across the state of Oregon a battle for federal public school money is brewing one that Brookings-Harbor School District officials hope to win.

This is the one issue this year in Salem that effects us directly, said Brookings-Harbor School District Superintendent Paul Prevenas.

This is one thats really worth fighting for.

Prevenas is joined by Brookings City officials and Sen. Ken Messerle, R-Coos Bay, all who have switched into defensive mode during this legislative session.

On the table are millions of additional education dollars that were earmarked by the federal government to help forested rural counties, but could instead be spread evenly among all counties.

For the Brookings-Harbor School District, the extra $315,000 it hopes to gain could help expand after school programs, start an elementary foreign language class, or establish a remedial program at the high school, Prevenas said.

Federal legislation approved in Congress last year is supposed to steer millions of new dollars to aid traditionally forest-dependent counties like Curry County that were hard-hit because of logging cutbacks in the past decade. Of Oregon's 36 counties, 31 would benefit to some degree.

The new money almost $55 million is projected in Oregon for the 2000-01 federal budget year takes the place of long-standing revenue sharing payments from national forests to help augment funding for county roads and schools.

The road dollars will flow to counties as proposed and account for 75 percent of the money.

But the fate of the education piece, estimated to be roughly $14 million annually, is still uncertain and could be one of the more divisive questions facing the Oregon Legislature this year.

Messerle said he would like to see rural schools get all the the federal money, not just the new amount.

It needs to go where Congress intended it to go, he said. That's the right thing to do.

Messerle added, The rural schools better stick together if theres to be any chance of seeing that extra money.

Today, state law requires spending equal dollars per student in public schools and considers any federal forest revenue in the formula.

So when Gov. John Kitzhaber proposed his budget in December, the forest aid money was effectively spread evenly across the state, even to the five non-forest counties.

Legislators can adjust the guidelines, however, and U.S. Sen. Ron Wyden, D-Ore., who co-sponsored the bill in Congress along with Sen. Larry Craig, R-Idaho, has strongly urged state leaders to do so.

But there's no guarantee state lawmakers will adjust or delete the dollars from the equalization formula.

I'd like to see that money sent where Congress intended, said Sen. Bev Clarno, R-Redmond, who will either sponsor or cosponsor a proposal this year. But it's not going to be easy.

If the Legislature doesn't take some action, she predicted, it could widen the state's rural-urban divide.

Like Messerle, Prevenas would like to see the extra $14 million distributed only to the forested counties, like such money was originally intended to.

But its an uphill battle, he said, because rural counties dont have much clout at the state capital.

The facts are on the side of the rural school districts, but the number of votes are with the urban districts.

In November, Mayor Bob Hagbom and City Manager Leroy Blodgett drafted a resolution asking for legislation that would ensure that federal timber funds for rural schools actually go there as intended by Congress.

The resolution was adopted by the League of Oregon Cities, of which Hagbom is a member, at its annual convention in November.

Unlike other states, Prevenas said, existing Oregon law considers revenues received by school districts from federal forest receipts as a budget off-set, not a budget resource.

The money gets into the state, but not into the schools who were meant to receive it, he said.

Prevenas added, Id like to see our federal representatives, who argued so hard for this money in Washington, fight for us - to do something to make sure we get it.

Steering federal money to counties with federal forests is nothing new.

In 1908, Congress agreed to return 25 percent of the proceeds from logging on national forests to the counties where those public lands were located. The rationale was that because the federal government doesn't pay property taxes, the profit sharing was a way to ensure the health of local services such as roads and schools.

But those payments plummeted in the 1990s when environmental restrictions and lawsuits drastically reduced logging.

Western Oregon counties were better insulated from the declines because Congress created a safety net called the spotted owl guarantee, to make up for the effect of that bird's threatened species listing.

The Wyden-Craig bill was designed to ensure counties with federal land would keep receiving revenue from the federal government but, reflecting changes in federal resource policy, the legislation largely disconnected the money from logging activity.

If the $14 million in annual school-designated payments stays in the shared budget, it would mean roughly $22 per student for all districts statewide, according to the Legislative Revenue Office.

If the money goes just to the rural forested counties, Brookings-Harbor stands to receive more than $100 per student.

Lawmakers from the Portland area and the state teachers' union say the revenues should benefit all of Oregon's schoolchildren equally, said Jim Sager, director of the Oregon Education Association.

In addition, because the money is already in the suggested governor's budget, many district administrators, like Prevenas, are anticipating those dollars and won't be thrilled if their part of their allotments are redirected to other counties.

Crook County, on the other hand, in among the several counties that stands to gain handsomely.

Superintendent Gary Peterson figures the district would add roughly $187 per student - the total would be $684,524 in the first year. But he also has some discomfort with any proposal to tinker with school equalization, which benefits rural districts because they are subsidized with tax dollars from the Portland area.

We worked very hard to get equity, he said. I'm not sure it's in our best interest to change it.

Peterson still believes the state could devote the dollars to forest county schools without upsetting that balance by removing the federal money from the equalization formula. One strategy might be to designate it for capital projects rather than operating costs, for instance.

Still, finding any agreement in the legislature could prove difficult.

In what could be a preview of heated debates later, several lawmakers on the budget-drafting Joint Ways and Means Committee got into an exchange about the county payments during a Budget 101 session last week.

Sen. Mae Yih, D-Albany, said the law needs to be changed to allow the federal dollars to benefit rural counties, but she was met with a quick response from several Portland-area lawmakers including Sen. Tom Hartung, R-Cedar Mill.

Right now schools get the same amount per student, he said. And we send an inordinate amount of income tax money into the general fund to get to equalization.

A 1999 analysis by a Portland economics consulting firm put hard numbers to that perception. While the Portland metro area contributed $1.1 billion annually in taxes and lottery funds for K-12 education, it only receives about $815 million in state school payments, the study by Impresa Inc. determined.

Rep. Max Williams, R-Tigard, said he can't support legislation that would result in fewer dollars for students in his district compared to those elsewhere, particularly because robust property and income tax collections from Washington County already help pay for schools statewide.

In addition, he said, students in Lake Oswego and West Linn, two of the state's most affluent communities, would share in the timber money because they are in Clackamas County - but no money at all would go to Washington County schools.

One solution that's already been raised by the governor is removing the $14 million from the equalization formula and replacing the money.

But that strategy could prove difficult when lawmakers are already wrestling with a tight budget that trims popular services and personnel from several state agencies.

Rep. Tom Butler, R-Ontario, said he doesn't expect to see the county payments stay where intended unless new money is found. It was abundantly clear what was intended, but I don't see an appetite for this if we can't find another $28 million, which would be the cost over the two-year budget cycle.

Josh Kardon, Wyden's chief-of-staff, said the Senator recognizes the needs of the Portland-area schools, but still expects the dollars to go to the forested counties.

The purpose of the county payments programs is to compensate rural counties for their loss of tax revenue, but certainly Sen. Wyden has worked and will continue to work for increased education funding in his hometown of Portland and beyond.

The legislative debate is likely to split along regional rather than party lines, and could pit lawmakers from heavily timbered counties, against those who would benefit from divvying the pot equally.

And the split is not a neat rich vs. poor one. Economically healthy Willamette Valley counties, including Lane, Linn and Clackamas, would be among the big recipients, while depressed rural counties like Coos, Sherman and Gilliam would receive little or nothing, and would be better off if the money's divided equally.

At the Baker School District, business manager Hayhurst said he can't help feeling a little cynical about the prospects for the forest money. The county's schools would share $130,036 in the first year, which may not sound like much, but every little bit helps, he said.

We know where the power and the votes in the Legislature is. It sits in the Willamette Valley, and they will get their hands on it.

Ferrioli, who will be in a key position to shape legislation as chairman of the Senate Revenue Committee, said people need to respect the time and money spent by rural counties to win the federal funding.

He also said many struggling rural counties - including his home of Grant County - desperately need the help.

In Grant County, an extra $1.6 million a year would be divided among roughly 1,450 students.

Grant Education Service District Superintendent Bob Batty said he'd prefer to use those dollars to keep teachers and programs that are disappearing because the county's districts have lost 4 percent of their students a year due to timber harvest declines.

If you look at our needs and how many students we have, obviously $22 per student isn't going to make up for the loss, he said.

Ferrioli said several different proposals are being floated and he intends to discuss the matter extensively in his committee. But also he freely admits he has a bias.

We need to make sure the benefits go as directed, he said.

For urban students who live in places with growth in their economy, this is $22. But for rural students and districts that are dealing with economic disasters, this is everything.

Salem correspondent James Sinks contributed to this story.