School board considers seeking local option tax

Owner of $100,000-assessed home would pay $57 in additional property taxes for levy raising $493,508 a year

The financially strapped La Grande School District may ask voters to approve a local option levy to help it cope with funding issues.

The La Grande School Board agreed via consensus Wednesday to look into the possibility of having the district seek a local option tax.

Money from an option tax would likely be used to hire more elementary school teachers to reduce class sizes, fund high school sports and activities, help the district catch up on maintenance work and more, said La Grande Superintendent Larry Glaze.

The maximum the La Grande School District could raise through a local option tax, which would boost property tax rates, would be a total of $1.974 million annually. Glaze believes that should the board agree to ask voters for a local option levy the amount it would seek would be substantially less than the $1.974 million annual maximum. This is because of the tough economic times the area is experiencing, the superintendent said.

A local option tax that is 25 percent of the maximum allowed would bring in $493,508 a year. The owner of a home with an assessed value of $100,000 would pay $57 in additional property taxes for a local option levy raising $493,508 a year.

Local option taxes used for general operating expenses can be imposed for one to five years.

The school board decided to study the possibility of seeking a local option tax after hearing a presentation by David Williams of the Oregon School Boards Association.

Williams said that support for local option taxes is increasing in school districts throughout the state. Since 1999 Oregon school districts have conducted 112 local option tax elections. Voters have approved local option taxes in 46 of these elections.

Voters have become more supportive of local option taxes since then. In the past three years voters approved 15 local option levies and rejected 12. In 2008 voters approved nine local option levies and rejected six.

The poor economy should not be used as reason to avoid seeking a local option tax, Williams said.

“During tough economic times the focus (of voters) is on public services because people need them more than when times are good,’’ Williams said.

He noted that Oregon voters will decide Jan. 26 whether to strike down tax increases approved by the Legislature this year. Should state voters repeal the tax increases, Williams said the La Grande board should not consider this a bad omen for a local option tax. He explained that voters are more supportive of tax increases when all the revenue raised will be spent in their district.

“Voters are more likely to support a local tax than one for the state,’’ Williams said. “Local voters have been willing to step forward.’’

The La Grande School District is facing a budget crunch because of reduced funding from the state due to the recession and declining enrollment. Declining enrollment is taking a big financial toll because school districts receive $6,000 from the state per student.

The district had to trim about $2 million from its budget in June because of a funding shortfall.

La Grande School Board member Michael Frasier said he would be in favor of a local option tax. He said it could be used to help with funding for athletics, textbook purchases and more.

Frasier also would like to see funds from it used to establish a full-day kindergarten program. Presently the district provides only half-day kindergarten. The reason is that the state funds only half-day kindergarten. Several districts in Union County, however, are now providing full-day kindergarten. Frasier believes La Grande may be losing students to these schools as a result.

School districts are limited in the property taxes they impose by Measure 5, which voters passed in 1990. Measure 5 limits the amount property owners pay in taxes for schools in their district to $5 for every $1,000 of property value. The passage of Measures 47 and 50 by voters several years later do not allow allow this $5 per $1,000 rate to increase. However, they do allow school districts to seek local option taxes when there is a difference between the overall assessed value of property in a school district and the market value. A local option tax cannot exceed the difference.

Should La Grande voters eventually approve a local option tax the school district would receive a financial bonus — state equalization funding, Glaze said. The district would receive about 25 cents from the state in equalization funding for each dollar it receives in local option tax money.

Glaze is forming a committee to study the pros and cons of seeking a local option tax. It will include three school board members, district administrators and community members. The committee will report its findings to the school board within two months.