Oregon districts face last resort: cutting school days

This misty stretch of wide sand dunes, like much of the Oregon coast, has always had an intimate connection to the forest. The old lumber mill for years was the biggest employer in town, after the fishing fleets.

So it was with “horrible” regret that Siuslaw School District Supt. George Winterscheid announced recently that to plug an unexpected budget shortfall, wood shop was being canceled.

The district librarian had gotten the ax last spring, as had the school nurse, one of two band teachers, a reading specialist, two instructional aides and the instructor who teaches English as a second language. The district also cut the 2008-09 school year by six days.

Then the recession really hit.

With the Oregon economy “falling basically into a pit,” according to state economist Tom Potiowsky, the tiny Siuslaw district found itself $860,000 short of being able to cover its trimmed-down budget.

So in December, the board decided to eliminate middle school art, industrial arts, drivers education, study hall and a junior varsity basketball team. It laid off seven more teachers, two janitors and a vice principal. School thermostats were lowered, field trips canceled and precious supplies like paper put in a carefully watched cabinet.

“Our teachers are walking up and down the stairs with Sani-Wipes. They’re vacuuming their own classrooms,” board member Nancy Phelps said.

But Winterscheid still needs to find $400,000 in savings between now and June. If he can’t, Siuslaw’s schools may have to shut their doors even earlier and cut the school year by as many as 13 more days.

“When I first heard about this, I was just, ‘What do we do? . . . We’re already down to bare bones,’ ” Winterscheid said.

Plummeting tax revenue has left schools across the country on the ropes, but in few places has the situation been quite so dire as in Oregon -- which has no sales tax, severe limits on property taxes, an automatic rebate on tax collections during boom years and a corporate tax structure that allows companies with multimillion-dollar profits to pay as little as $10 a year.

Before the Legislature passed an emergency $51-million appropriation last week, the flood of red ink had threatened to close two-thirds of Oregon’s 197 school districts before their scheduled last day.

And the state is facing a projected budget shortfall of $3 billion over the next two fiscal years, beginning in September.

“Arizona is looking at some major cuts. Nevada just the other day . . . announced a 6% across-the-board pay cut for all state employees, including school employees. But nothing as drastic as what we’re seeing in Oregon,” said Dan Domenech, executive director of the American Assn. of School Administrators.

In California, schools are reeling under $7.4 billion in budget cuts for the 2008-09 school year, with districts forced to choose among closing campuses, shutting down programs and laying off thousands of teachers.

But the prospect of early closures is particularly alarming in Oregon, where school calendars already are three weeks shorter than the national average.

“For all of us, reducing school days is really a . . . last resort. It’s not something that anybody takes lightly,” said Craig Hawkins, spokesman for the Confederation of Oregon School Administrators. “But we’re limited in what our options are. And if you look at the school districts that have had to do this . . . there were lots of other cuts they made first.”

Only a handful of districts like Siuslaw, which has no reserve funds or staff cuts left to fall back on, faces the immediate prospect of a shortened calendar.

In the search for a way out of Oregon’s budget woes, legislators are turning their attention to the state’s minimum corporate income tax.

That $10 levy -- a provision in place since 1931 -- covers 31 companies headquartered in the state that have net taxable incomes exceeding $1 million.

According to Charles Sheketoff of the Oregon Center for Public Policy, that group includes Intel Corp., the computer chip manufacturer whose headquarters are in Santa Clara, Calif., but whose largest company site is in Hillsboro, Ore.

“We’re now tied for the 49th lowest in the nation in business taxes,” Sheketoff said. “The fact that our schools are closing and courts are only operating four days a week we think is a much better indication of the business climate.”

So do many businesses.

State Democratic House Speaker Dave Hunt said companies including Nike Inc., Intel and Portland General Electric have supported proposals -- similar to those being pushed by Democratic Gov. Theodore R. Kulongoski -- to raise the corporate minimum tax.

“A lot of those companies have said if ours is $50,000, we have no problem with that. They’re a strong proponent of raising the corporate minimum because they really see it as a fairness issue,” Hunt said.

Likewise, leaders of some of the state’s biggest corporations in December proposed diverting a set of tax rebates they would normally be entitled to this year into the state’s rainy day fund.

Under the “kicker” law, tax windfalls must be returned to residents if state revenue exceeds forecasts by 2%. Taxpayers received rebate checks averaging $600 at the end of 2007, a record $1.1-billion payout that would have gone a long way toward alleviating this year’s painful cuts had it remained in state reserves.

Democrats, who control the state House and Senate, have said both tax measures are on the table.

“Raising the corporate minimum is a priority. . . . That is going to happen,” Hunt said.

In Florence, which has 1,360 students attending its three schools, it is unclear how long people can wait for the Legislature to revamp the tax structure -- not when the town could be looking at a school year nearly four weeks shorter than last year’s.

“The damage that’s being done to the kids who right now are having their only chance at school is just inexcusable,” Phelps said.

“We’re down to one 22-year-old band director who’s working with grades six through 12,” said Rachel Pearson, a parent volunteer coordinator. “Can you imagine working with a child who doesn’t know how to put a reed on a clarinet, up to a kid who’s applying to Julliard and . . . and everybody in between? He has a beginner class of 42 students.”

The worst part, she said, is the ongoing financial uncertainty. The town agonizes through one round of funding cuts, only to hear that it was not enough.

“It’s like target shooting in a dark building,” Pearson said. “Then you turn the lights on and say, ‘How did we do?’ ”

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kim.murphy@latimes.com