School administrators are watching warily as the Oregon legislature discusses delaying the collection of a new business tax that would have infused $1 billion per year into Oregon schools.
"There will be some school districts that will not be able to maintain service levels" without the new funds from the tax, said Jim Green, executive director of the Oregon School Boards Association.
The Joint Special Committee on Coronavirus Response of the Oregon legislature is considering multiple recommendations to help businesses, families, students, schools and others cope with the economic crisis and medical stresses resulting from the novel coronavirus pandemic. The legislature is expected to convene sometime the week of March 30 to consider proposals and take action.
One of the many options being discussed is to delay the collection of the Corporate Activity Tax until the coronavirus emergency is over. Hundreds of businesses have closed or sharply curtailed operations and thousands of workers laid off in the past month as drastic restrictions were put in place to stanch the spread of the virus. Many businesses and business associations are lobbying to delay the tax.
The tax, approved in the 2019 legislative session and effective Jan. 1, would be collected on businesses with commercial activity of $1 million or more and would have funded the Student Success Act.
Schools were to use the money to help more students graduate by adding career-oriented programs, counselors, reducing class sizes and other steps. Some schools were hoping to add back programs cut years ago, while other districts were counting on the money to prevent budget cuts.
Tiny Corbett School District is one that could face a budget crunch if the tax is delayed or modified.
"That will be horrible if that happens. We will need to make cuts," Randy Trani, superintendent of Corbett School District, said via email.
And trying to snap up the best possible candidates to fill postions, some school districts already began ramping up in anticipation of the new revenue.
"School districts have hired people based on this," said Green.
The 12,000-student Gresham-Barlow School District, which would be getting about $10 million from the tax, said "No cuts would be necessary, because we have not yet hired anyone specifically for Student Success Act work or with Student Success Act monies."
Athena Vadnais, Gresham-Barlow's director of communications and community relations, said via email, "If funding were to be cut for the Student Success Act, it would negatively impact our ability to expedite strategies outlined in our Continuous Improvement Plan."
When asked about the effect such a delay in collecting the tax might have on the Reynolds School District, the district said, "Due to the uncertainty of the COVID-19 pandemic, we do not have sufficient information to answer the question at this time."
The Centennial School District did not immediately respond to questions about the possible corporate tax suspension.
Although far from welcome news for the schools, OSBA's Green said schools certainly understand the gravity of the economic situation.
OSBA would "be willing to look at suspension (of the tax) for a very limited time," he said, "in order to keep Oregon afloat. But, at some point, we're going to get out of this."
You count on us to stay informed and we depend on you to fund our efforts. Quality local journalism takes time and money. Please support us to protect the future of community journalism.