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State aid confusion to test schools District will do without new books, smaller classes By PETER WONG When the Legislature approved state aid for Oregon's public schools for the next two years, Superintendent Steve Wisely thought it would provide enough to pay for some new textbooks and teachers for Medford's growing schools this year. Wisely knew the district's share of $4.81 billion in state aid would not be enough for a lot of new teachers or for the full $1.5 million that officials requested for new textbooks. But he said it might be enough to plug some gaps. That was in mid-July. Two weeks after the Legislature ended its third-longest session in state history, Wisely got bad news from the state Department of Education, which prepares estimates of state aid and makes the actual payments to the 198 districts. Medford, the state's seventh largest district, would receive up to $1.2 million less in state aid and local property taxes than it had figured, based on a level of $4.81 billion in state aid. Even discounting a potential $400,000 for technology improvements, the gap is still $800,000. The gap won't cause any layoffs because the Medford School Board based its 1999-2000 budget on a lower estimate of state aid and property taxes. But Wisely said Medford schools still will notice the effects. Most textbooks will not be replaced, and many classes will remain larger than Wisely thinks they should be, particularly in primary and middle grades. "We are doing everything we can within the amount of money we have," Wisely said Friday, at the end of the second week of school. "But this is the time we should be making improvements such as lowering class sizes, buying new textbooks to meet the state standards, and training our teachers how to use them. We cannot ignore the standards; the state sends us money based on us meeting the standards. Education reform is huge -- and most of it costs money. "We are just hanging on by our fingertips in the first year of the two-year state budget." The state budget now pays an average of 70 percent of school costs, compared with less than 30 percent before voters approved a statewide limit on local property taxes in 1990. Medford will proceed with two new special-education teachers and purchase some mathematics materials for primary grades and social studies textbooks for middle grades. But Wisely said the school board paid for those additions by drawing $400,000 from its reserve fund, instead of the anticipated state aid. One teacher each will be added at Kennedy and Wilson elementary schools, but Wisely said their salaries will come from higher state aid linked to overall enrollment increases. The actual aid will come to the district next May. What apparently happened to Medford and other Southern Oregon districts is this: Although the Legislature set aside a total of $4.81 billion for state aid to schools, chunks of the total are in special-purpose funds that do not benefit all 198 districts. One fund primarily benefits Portland, the state's largest district. Another benefits only districts that plan new construction in the next year or two. A third fund would allow districts to share $50 million for technological improvements. But that fund is tied to a not-yet-final settlement of a rate dispute between the state Public Utility Commission and US West Telecommunications. The state Department of Education advised districts last week not to count on receiving that money soon. Medford and other districts will share in a fourth fund created by a two-year bond issue of $100 million. But that money is reserved for capital improvements. Minority Democrats raised questions about the adequacy of aid for school operations, as opposed to special purposes, but were rebuffed by the majority Republicans. The $4.81 billion that the Legislature set aside is more than the $4.73 billion proposed initially by leaders of the Legislature's Republican majorities. But Wisely said that when the special funds are deducted, Medford's share of state aid will be about as much as if the Legislature had distributed $4.73 billion to schools. The amount is short of the $4.95 billion asked by Democratic Gov. John Kitzhaber, who boosted his original budget request from $4.6 billion. State Rep. Rob Patridge, R-Medford, who supported $4.81 billion, said he thinks some of Wisely's assumptions about the distribution of aid differ from those actually used by the state Department of Education. But he said he has asked the Legislature's own tax experts to provide an explanation. "I do not think anyone was misled," he said. Patridge also said Medford would have benefited by $200,000 if the distribution formula had been changed to let high-growth districts keep extra property taxes instead of putting them in a statewide pool. But Medford and several other districts opposed the Legislature's bill to change the formula, and Kitzhaber vetoed it. Wisely, a member of the board of the Confederation of Oregon School Administrators, said other districts are discovering similar news. "What we thought we would get under the state distribution formula is not even close," he said. "There is a rude awakening going on." Mail Tribune Copyright � The Mail Tribune 1999, Medford, Oregon USA