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The numbers Here's how Gov. John Kitzhaber proposes to raise $400 million more for public schools, giving them a total of $4.95 billion for the 1999-2001 budget: $190 million from a projected surplus in personal income taxes that otherwise will be rebated to taxpayers in December. The estimate is 5.4 percent of a taxpayer's 1998 liability. For many taxpayers, the average "kicker" is $100. $100 million from higher corporate income taxes. The rate would go from 6.6 to 8.6 percent and the increase would end in two years. It would require 60 percent majorities in the House (36 votes) and Senate (18 votes). $70 million from the tobacco settlement to the Oregon Health Plan and the savings shifted to schools. $40 million from the Common School Fund, which the state manages and distributes interest earnings. Governor's new plan: another $400 million for Oregon's schools He would kill kicker, raise corporate taxes By PETER WONG SALEM -- Southern Oregon educators praised and legislators were divided over Gov. John Kitzhaber's proposal Monday to boost state aid to public schools by $400 million, mainly by retaining surplus income taxes and raising corporate taxes. Kitzhaber said his new target for the next two years is $4.95 billion, which would require the Legislature to increase corporate income taxes and keep projected refunds of personal income taxes, known as the "kicker." The total has been identified as what schools need to continue educating students to achieve new state academic standards. Kitzhaber also committed himself to working toward a change in how Oregon pays for schools -- a goal that has eluded governors and legislatures for a generation -- in the form of a ballot measure in the 2000 general election. He avoided mentioning a sales tax, which voters have rejected nine times, but said neither income nor property taxes can carry the burden. Legislative reaction was predictable to the speech by the Democratic chief executive, who delivered it at an elementary school here. The majority Republicans panned it, and fellow Democrats praised it. "But it's the first proposal that puts us in the black," said Medford school Superintendent Steve Wisely. "I applaud him for coming up with a figure that moves us toward the educational reforms the state has mandated. "I'm sorry it's being criticized for how he gets there. But if people are critical, they need to find other ways of getting there. It's no longer acceptable for them to tell us to reform the schools, but not give us any more money to do it." Wisely said at Kitzhaber's original budget figure, Oregon's seventh-largest district would have started between $3.2 million and $4.3 million short of this year's level. At Kitzhaber's new figure, Wisely said, Medford schools can continue to do everything they are doing this year. He said an additional $2 million is likely to be spent on more teachers for a growing student enrollment, more training for teachers and new books to help students attain the new academic standards. Ashland Superintendent John Daggett said it would be the first time in seven years he has not had to propose more budget cuts. "It's very gratifying that he has found a way to pay the bill," Daggett said. "So it's up to the state Legislature to invest in the future, as it has in prisons. They say build them, and they will come. If we do that with schools, we won't have to build as many prisons." Anticipating legislative critics, Kitzhaber said increasing income is justified to boost aid to schools, which have relied on it since voters approved property tax limits in 1990 and 1996. "There are those who will say this is impossible to achieve in a `zero-sum' budget, that our hands are tied, and that whatever revenue is currently available will just have to be enough -- and the consequences be damned," Kitzhaber said. "The truth is that that is not a `zero-sum' game, unless our lack of courage and commitment makes it one. This does not have to be a choice between inadequate schools, unaffordable universities and at-risk children." But Senate President Brady Adams, R-Grants Pass, said the Legislature should balance the two-year budget with what it has. "It's time to quit complaining that our neighbors have not given us enough of their hard-earned money and get busy making the decisions on how to balance the budget," Adams said. Although retaining surplus personal income taxes may require only simple majorities, raising corporate income taxes would require 60 percent majorities -- 36 votes in the House and 18 in the Senate. Rep. Rob Patridge, R-Medford, campaigned last fall in opposition to increasing the corporate income tax rate, now 6.6 percent. "Raising business taxes by 30 percent, stealing the `kicker' refunds from people, and raiding tobacco settlement money are not responsible ways to go about funding schools," he said. "They are one-time shots and it's not a well-thought-out plan for the long term." But Rep. Judy Uherbelau, D-Ashland, said businesses got more relief than homeowners from the property tax limits that voters approved this decade, and also benefited from large corporate tax rebates the past two budget periods. "I think it is fair," she said. "I also think if Oregonians truly believe that education is their top priority, they should be willing to have us keep the `kicker' to pay for it. The alternative is to cut other programs for kids, or services for seniors and disabled people. If we want things, we have to pay for them." Sen. Lenn Hannon, R-Ashland, said he disliked the increase in corporate taxes. "We are playing a game of one-upsmanship about whether the governor or the Legislature can add more money for schools," he said. "What we really need to do is talk about a long-range solution that finds new revenue for schools that is outside the general fund. But I know he means well." Kitzhaber acknowledged that each of the five governors since Tom McCall 30 years ago has proposed ways to resolve the school-aid question, and all have failed. "I believe that failure was the result of not being able to answer three essential questions that underlie any budget decision," he said. "What do we want to buy? How much does it cost? Are we willing to pay for it? "Now, for the first time, we have the information necessary to answer the first two questions. The answer to the third is not a matter of data or information -- it is a matter of values and will." Mail Tribune Copyright � The Mail Tribune 1999, Medford, Oregon USA