PUBLIC HEARING: SJR 18

 

TAPES 52-55, A-B

 

SENATE REVENUE COMMITTEE

March 6, 2003   1:00 PM   STATE CAPITOL BUILDING

 

Members Present:                        Senator Ryan Deckert, Chair

                                                Senator Ted Ferrioli, Vice Chair

                                                Senator Tony Corcoran

                                                Senator Charlie Ringo

 

Members Excused:                      Senator Lenn Hannon

                                                Senator Bruce Starr

                                                                                                           

Witnesses Present:                        Representative Mark Hass, District 27

                                                Randall Edwards, Office of Treasury

                                                Representative Lane Shetterly, District 23

                                                Senator Frank Morse, District 8

                                                Representative Krummel, District 26

                                                Representative Deborah Kafoury, District 43

                                                Jim Scherzinger, Superintendent, Portland Public Schools

                                                Carolyn Ortman, Hillsboro School Board

                                                Cyrel Gable, Corvallis School Board

                                                Dawn Bonder, Citizens for Beaverton Schools

                                                Jason Williams, Taxpayer Association of Oregon

                                                Tina Empol, Corvallis City Counselor

                                                Theresa Giddings, Beaverton

                                                John Marshall, Oregon School Boards Association

                                                Nancy Winston, Beaverton

                                                Ozzie Rose, Confederation of Oregon School Administrators

                                                Laurie Wimmer Whelan, Oregon Education Association

                                                Tim Nesbitt, Oregon AFL-CIO

                                                Don Schellenberg, Farm Bureau

                                                Andrea Henderson, Oregon Community College Association

 

Staff Present:                            Mazen Malik, Legislative Revenue Office

                                                Steve Meyer, Legislative Revenue Office

                                                Paul Warner, Legislative Revenue Office

                                                Tara Lantz, Committee Assistant

 

TAPE 52, SIDE A

 

003

Chair Deckert

Calls meeting to order at 1:04pm.

 

 

 

018

Sen. Ringo

Discusses the problems with the public school system and the negative impact on Oregon’s economy. Testifies in support of local option funding. States that although the state should fund all schools at an acceptable level, local districts that have differing values and needs should be able to raise that funding level on their own. States that in order to raise public credibility we need to give local districts more accountability. Introduces SJR 18 and discusses proposed amendments.

 

 

 

071

Rep. Hass

States that SJR 18 is not a long term solution to school funding or a tax overhaul, but rather an option to offer local school districts who are asking for help. Responds to equalization questions by saying that the state addressed the equalization problem with the equalization funding formula, which provides an equal floor for all schools, and that local option just allows school districts to build on that floor. Proposes financial incentives for property poor districts. Exhibit 5.

 

 

 

110

Sen. Ferrioli

Makes observation that the legislators need to compare districts by capacity and not values because there are many districts that value education as much as anybody but have a real difference in capacity, which will create several different local initiatives. Asks if it wouldn’t increase credibility if they established a sunset date by pointing out that someday they will come back to the issue of adequate school funding.

 

 

 

183

Sen. Ringo

Responds that he believes there was more credibility when the local options had more accountability. Declares that the state needs to provide enough money so that in all districts everyone gets a quality education, but that returning to a local funding system would be a long term improvement.

 

Discussion follows.

 

 

 

233

Randall Edwards

Testifies in support of local options because there is not adequate funding coming from the state and local districts should be able to come up with more money on their own. Discusses the disconnection of schools and local communities as a result of Measure 5. Stresses that the state needs to look at a long-term solution for public school funding. Exhibit 6.

 

 

 

281

Rep. Shetterly

Discusses the constraints of local districts and testifies in support of SJR 18 and other local option ideas as a solution to those constraints. Responds to the equalization problem by proposing increased funding from the State School Fund for the Local Option Equalization Fund. Discusses time restraints in passing SJR 18. Reads from email from the superintendent of Condon, who supports SJR 18 because it offers equal opportunities for both rural and urban districts. Exhibit 6.

 

TAPE 53, SIDE A

 

008

Sen. Morse

Expresses initial concern of the bill due to the equalization problem but testifies in support of SJR 18 with the proposed amendments because it provides local districts a lifeline that is needed. States that he doesn’t believe it creates an undo differential between districts. States that it is clear that there will be no tax increases or revenue restructuring in the 2003 Regular Legislative Session and that local districts need some options to help themselves. Exhibit 7.

 

 

 

097

Sen. Corcoran

Disagrees that there would be no impetus for a statewide resolution to the crisis of adequacy.  Declares that he does not believe the local option would benefit the poor districts because only the wealthy ones would be able to pass it. Asks how many districts Morse thinks would be able to pass a local option levy.

 

 

 

114

Sen. Morse

Responds that it is an issue of fairness for those districts that would not support should they hold down those districts that would support. Stresses that the opportunity is there for equalization through the Local Option Equalization Fund.

 

 

 

129

Sen. Corcoran

Points out that in a lot of districts it is not about whether they won’t support but rather they can’t and states that if the legislature was really serious about finding a funding solution they would look at a statewide 1 percent increase rather than create a greater gap in equity.

 

 

 

149

Sen. Morse

Responds that he would support a statewide solution, but that the legislature has to look at what has a better chance of passing.

 

 

 

171

Rep. Krummel

Opposes a short term solution to the school funding problems and proposes a package based on Iowa’s school funding system which would set an annual authority for each school district as far as what their per child spending would be and then that the state funding formula would meet 90 percent of the authority based on a quality education model and the local districts would have the authority to go outside of Measure 5.

 

Questions and answers interspersed. 

 

 

 

255

Rep. Kafoury

Discusses history of local option legislation. Testifies in support of SJR 18 because local districts need more flexibility on how to help their local schools. Stresses that local option is a short term and long term solution.   

 

 

 

292

Jim Scherzinger

Testifies in support of a local option but stresses that a statewide tax is Portland Public School’s first choice and that they support the local option lacking that. Discusses the importance of schools to attract business in the Portland metro area. States that he doesn’t believe that a local option would prevent a statewide solution at a later time.

 

 

 

390

Sen. Corcoran

Asks if any school district able to pass a local option would then be sympathetic to a statewide solution.

 

 

 

409

Scherzinger

Responds that he believes so because any local provision is going to be limited and that businesses support a statewide tax because when it is left to local options, competitiveness between districts occurs.

 

 

 

445

Sen. Ferrioli

Asks why it is necessary that there be an equalization funding formula.

 

 

 

472

Scherzinger

Responds that there are several reasons, one being a legal constitutional reason.

 

Discussion follows.

 

TAPE 52, SIDE B

 

061

Carolyn Ortman

Testifies in support of SJR 18 because it is an important tool to raise money for local districts, but stresses that there needs to be a long-term solution. States that she doesn’t care if has a sunset, as long as the option is there now.

 

 

 

121

Sen. Deckert

Asks if she is sure she doesn’t care if it was only for three or five years.

 

 

 

128

Ortman

Responds that only if there is a long term solution.

 

 

 

130

Sen. Ringo

Asks if there is a structural advantage going back to more of a local funding base.

 

 

 

137

Ortman

Responds affirmatively.

 

Discussion follows.

 

 

 

153

Cyrel Gable

Testifies in support of SJR 18. Gives personal account in the Corvallis public schools. Exhibit 8. Refers members to written testimony from the Corvallis Chamber of Commerce. Exhibit 9.

 

 

 

216

Sen. Deckert

Points out that lacking a statewide solution, communities such as Corvallis will most likely find some way to fund their schools in unique ways.

 

 

 

237

Dawn Bonder

Testifies in support of SJR 18 and granting more local control. Gives personal account of Beaverton School District. States that in order to gain the credibility in urban areas to pass a statewide solution, the legislature needs to give local districts more control. Exhibit 10.

 

Discussion follows.

 

 

 

407

Sen. Corcoran

States that he doesn’t agree that helping the rich districts will increase the possibility for a statewide solution.

 

 

 

436

Sen. Ringo

Declares that if the urban districts don’t do something they are going to see a great movement out of public schools which would hurt the entire state.

 

 

 

452

Sen. Corcoran

States that if Sen. Ringo did actually care about the whole state, he would look more closely at a statewide solution.

 

 

 

454

Sen. Ringo

Points out that they tried a statewide solution with Measure 28 and it failed.

 

 

 

466

Sen. Corcoran

Disagrees that there is no support for a statewide solution and states that if there had not been an organized opposition from leadership in the building, it would have passed.

 

TAPE 53, SIDE B

 

034

Jason Williams

Opposes SJR 18 because people are already having a hard time paying property taxes. Proposes eliminating urban renewal, eliminating tax breaks that effect property taxes, getting rid of the CIM and CAM, and selling government owned property that is not being used.

 

 

 

080

Sen. Deckert

Asks if there are specific state ownership lands that they could point out.

 

 

 

083

Williams

Responds that he will get that for him.

 

 

 

084

Sen. Deckert

Asks if the taxpayers association opposes even letting people vote on the bill.

 

 

 

091

Williams

Responds affirmatively.

 

 

 

097

Sen. Corcoran

Asks if the Taxpayers Association feels that churches should be put back on the tax rolls.

 

 

 

104

Williams

Responds negatively.

 

Discussion follows.

 

 

 

117

Tina Empol

Testifies in support of SJR 18. Gives personal account of Corvallis School District. States that her preference would be a statewide solution.

 

 

 

159

Theresa Giddings

Testifies in support of SJR 18 but also prefers a long-term solution. Gives personal account of Beaverton School District. Exhibit 11. Refers members to written testimony from Christi Feldewerth. Exhibit 12.

 

 

 

262

John Marshall

Testifies in support of the concept of a local option as a short term solution but stresses the importance of a long term statewide solution. States that the local option needs to be constructed in a way that is easier to understand than the current local option. States the issue of equalization needs to be addressed. Opposes waiting so that there will have to be a double majority.

 

 

 

330

Sen. Corcoran

Asks if he thinks that putting this out now will decrease the chances of a long-term solution.

 

 

 

337

Marshall

Responds that there will be some people that will consider this as a solution, but that it is their responsibility to explain to them that it is not the solution and that the level of education funding needs to be raised for everyone.

 

 

 

348

Sen. Deckert

Asks if Marshall thinks more cities will find solutions on their own, such as Portland, which are not within the guidelines of the state.

 

 

 

353

Marshall

Responds affirmatively.

 

 

 

370

Sen. Ringo

Asks if the amendments address his concern about compression.

 

 

 

374

Marshall

Responds that it’s not as clear as he’d like but that he’d have to know more about them.

 

 

 

388

Sen. Ferrioli

Asks if Marshall thinks a sunset would be appropriate.

 

 

 

406

Marshall

Responds negatively.

 

 

 

416

Sen. Ferrioli

Asks about the legal necessity of a funding equalization formula.

 

 

 

418

Marshall

Responds that he believes in Oregon there is no legal necessity.

 

 

 

446

Sen. Ferrioli

Asks how many states are under court order for school equalization.

 

 

 

448

Marshall

Responds approximately half.

 

 

 

460

Sen. Ferrioli

States that the equity formula for the state was designed for a purpose and there is still a need for it.

 

Discussion follows.

 

 

 

507

Sen. Ringo

Disagrees that this is a constitutional issue and reminds the members that the record for passing local options has not been high and that districts are not going to have an easy time passing them now.

 

TAPE 54, SIDE A

 

055

Nancy Winston

Testifies in support of SJR 18, but wants a long term solution. Gives personal account of Beaverton School District. Exhibit 13.

 

 

 

124

Ozzie Rose

Testifies that although he has historically supported a local option he does not support one now because it is not part of a total plan in which there is an adequately funded education for every child and because only a few districts would benefit. Supports a statewide solution, stating that the state cannot live with its current budget and is going to have to talk about revenues. Proposes a $2 statewide tax for a 21st century initiative for schools to fund all schools.

 

 

 

207

Sen. Deckert

Asks what track record of success the state has for passing a statewide tax increase.

 

 

 

208

Rose

Responds that the track record for local options is not high.

 

Discussion follows.

 

 

 

263

Laurie Wimmer

Whelan

Testifies that the Oregon Education Association is officially neutral on SJR 18, but that she echoes everything Rose said. Discusses the history of local options (Exhibit 14). Asks for some data before this is embraces as even a partial solution and expresses concern that local options would not work in the current economic times.

 

 

 

315

Sen. Deckert

Asks what data shows that the legislature would enact a statewide tax.

 

 

 

329

Sen. Corcoran

Points out that you have to put all of the historical defeats of tax increases in the context of the time the questions were asked.

 

Discussion follows.

 

 

 

381

Tim Nesbitt

Testifies that at best the Oregon AFL-CIO is neutral on SJR 18 but points out that this is nobody’s first choice and that the legislature should be addressing what the better choices are. Proposes eliminating tax exemptions and equalizing corporate income taxes with personal income taxes. States that if this passed, voters would be much more unlikely to come back and pass a statewide tax.

 

TAPE 55, SIDE A

 

071

Sen. Corcoran

Asks about putting an adjusted gross income as opposed to mortgage on second homes.

 

 

 

079

Nesbitt

Responds that a better approach might be putting a cap on mortgages.

 

 

 

097

Don Schellenberg

Testifies in opposition to local option on property taxes because the Farm Bureau believes that property taxes should be used for property services and a tax based on the ability to pay for social services. Supports local control and a local option income tax.

 

 

 

137

Wimmer Whelan

Points out that the money for the Local Option Equalization Fund would be skimmed off the top of the state school fund, diminishing the allocation of money to all districts.

 

 

 

156

Schellenberg

Disagrees with a statewide property tax.

 

 

 

180

Andrea Henderson

Discusses the positive impact of SJR 18 on community colleges. Asks that the legislature address both Community Colleges and K-12 keeping in mind their differences.

 

 

 

215

Chair Deckert

Adjourns meeting at 3:34pm.

 

 

 

 

 

Tape Log Submitted by,

 

 

 

Tara Lantz, Committee Assistant Reviewed by Kim Taylor James

 

Exhibit Summary:

1.      SJR 18, Mazen Malik, SJR 18 Explanation, 1p.

2.      SJR 18, Mazen Malik, Reference on Education Dollars FY 2001-02, 1p.

3.      SJR 18, Mazen Malik, Tax Extended, Tax Imposed, and Reduction Due to Measure 5 Limits, 1p.

4.      SJR 18, Mazen Malik, Proposed Amendments to SJR 18, 1p.

5.      SJR 18, Representative Hass, Written Testimony, 1p.

6.      SJR 18, Representative Shetterly and Randall Edwards, Written Testimony, 2pp.

7.      SJR 18, Senator Morse, Written Testimony, 3pp.

8.      SJR 18, Cyrel Gable, Written Testimony, 2pp.

9.      SJR 18, Cyrel Gable, Written Testimony from Corvallis Chamber of Commerce, 1p.

10.  SJR 18, Dawn Bonder, Written Testimony, 3pp.

11.  SJR 18, Theresa Giddings, Written Testimony, 2pp.

12.  SJR 18, Theresa Giddings, Written Testimony from Christi Feldewerth, 2pp.

13.  SJR 18, Nancy Winston, Written Testimony, 2pp.

14.  SJR 18, Laurie Wimmer Whelan, Local Option Levy History, 2pp.