By RACHEL ALEXANDER
Of the Salem Reporter
Following a year of deep budget cuts, Salem-Keizer School District leaders may ask voters to approve a property tax increase to fund employees in local schools.
District executives have been researching a levy as one possible solution to the district’s budget deficit, which resulted in the layoff of 112 employees in the spring.
Superintendent Andrea Castañeda and Robert Silva, the district’s chief operations officer, discussed a levy as part of a larger conversation about school funding during an annual school board retreat Aug. 3.
“It is time to have that conversation as a board because we need to be thinking about resources broadly,” Castañeda said.
To bring a levy to voters, the school board would need to authorize placing a tax increase on the ballot. There’s no immediate plan for the board to do so, and no ballpark amount for how much the district would seek to raise from property owners, district spokesman Aaron Harada said.
The discussion comes as broader questions about school funding levels have become a key issue in Oregon politics over the past year.
Gov. Tina Kotek in July released a plan to correct how the state calculates what it should cost school districts to maintain the schools and employees they already have. It’s a generally obscure issue that took on renewed importance after state formulas lowballed the effects of inflation and a hot labor market, contributing to deep cuts in Salem-Keizer and a teacher strike in Portland last fall.
The governor’s plan will inform her budget proposal to the legislature for the 2025-27 biennium. If legislators approve the tweaks to how schools are funded, Salem-Keizer would see about $18 million more from the state next school year, Castañeda told the board.
After deep budget cuts last year totalling $70 million, the school district still has a budget gap of about $27 million in its general fund, which pays for most district operations.
The district’s budget calls for bringing in $560 million while spending $587 million, drawing down savings.
Castañeda said that’s manageable, and the true gap will be lower because the district always spends less than budgeted on employees because of savings from vacant positions.
The proposed state changes and last year’s deep cuts mean Salem-Keizer won’t be seeking budget cuts this school year, Castañeda said. But adding back services students need or reducing class sizes would take more money, she said. That’s where a levy comes in.
Why a levy
District executives began the legwork of seeking a potential levy earlier this year with research including a telephone poll.
It would be a significant change for the district, which has sought voter approval for bonds to fund school construction projects, but never sought a tax increase to pay for general school operations. State law began allowing levies in 1999, Silva told the board.
Bringing a proposal to voters would mean doing research to determine what voters are likely to support, like lowering class sizes or adding programs, as well as how much they’d be willing to pay.
Other large districts in Oregon, including Portland and Beaverton, rely on levies to fund school operations. Portland voters renewed a levy in May that’s expected to bring in about $102 million for the district next year. Beaverton’s levy, which voters renewed in 2022, pays for 286 teachers in the district. Beaverton enrolls about 38,000 students, about 1,000 fewer than Salem-Keizer.
The math for pursuing a levy in Salem-Keizer didn’t make sense until recently, Castañeda and Silva said at the meeting.
The district has lower property values than the Portland metro area, and a substantial share of land in Salem is owned by the state of Oregon and is thus exempt from paying taxes. That’s one reason both the district and the city of Salem’s budgets are stretched thin.
“Any new tax has a much higher burden on our local taxpayers just because of the reduced amount of property out there,” Silva said.
But recent increases in property values mean a levy could make a difference in the district’s bottom line.
The district’s school board last sought voter approval for a tax increase in 2018 with a bond measure to fund improvements at every school in the district. The $620 million package was at the time the largest bond in state history. Those construction projects were largely completed last year.
Bonds can pay for capital projects like construction or buying land, but can’t fund school operations.
Lisa Harnisch, now a school board director, was one of the community leaders who led the bond campaign. She told the school board that getting a yes from voters was a long process of polling and listening to people to determine which projects were most important to Salemites and would garner broad support on the ballot.
Developing a list of projects to include in the bond package and gathering feedback took nearly two years.
Harnisch said if the board moves forward with a levy now, they need to be cognizant of other local governments also seeking more in property taxes.
Chemeketa Community College is seeking voter approval in November for a $140 million bond to fund campus renovations and more space for career programs. The measure would replace expiring bonds and wouldn’t raise property tax rates.
The city of Salem may also be going to voters with a local option levy in the near future. City councilors are discussing a possible levy and other options to raise money for city operations at an Aug. 19 work session.
Castañeda said a levy could be too much for voters to swallow, and it’s not unusual for school districts to have levies fail.
“The economy feels to the average person like it’s contracting and risky and that makes it harder for people to vote yes on things like that,” she said. “These are very far from sure things. They get voted down all the time.”
She also urged the school board to adopt a list of legislative priorities to guide district leaders in advocating for other measures to increase state funding to schools during the 2025 session.