Oregonian guest column: Save the schools but lose the house?

Oregonian guest columnist Eric Fruits writes:

As reported in The Oregonian, Portland school board members will consider asking voters in May to approve a new, higher local-option tax to fund school operations. This would be in addition to another new property tax heading to the May ballot to fund the first phase of the district's massive building program to "modernize" its schools.

The school district promotes the bonds as a modest increase in property taxes. In our neighborhood -- and many other neighborhoods -- homeowners are looking at annual increases in the $750 to $1,000 range. That's a steep increase for many of our residents, especially those struggling on fixed incomes and incomes decimated by the recent recession.

Even in the best of times, such huge property tax increases would be tough to choke down. But the recession hit Portland hard, and the foreclosure crisis has caught up with us. The number of Portland-area foreclosures has increased by almost 20 percent since last year. The increased tax burden the district hopes to impose will lead to even more Oregonians losing their homes. Recent research from the Kansas City Fed suggests that the proposed property tax increases may trigger 1,000 or more foreclosure filings.

At our last neighborhood association meeting, one of the older residents raised a question on the minds of many: "How do you expect those on fixed incomes to pay for the tax increases?" When faced with sudden and steep increases in housing costs, those on fixed incomes have a narrow range of options available to them. One option is to flee the city. Recent research published in the Journal of Urban Economics indicates that approximately 4,500 people age 50 and older may be driven out of Portland if voters approve the higher property taxes.

While the impacts seem staggering, they are also reasonable based on past experience. In 2003, when Multnomah County imposed a temporary income tax to support area schools, the county lost almost 7,000 residents. These new property taxes are much higher, virtually permanent, and can be avoided only by moving away.

As a father of children in Portland Public Schools, it's clear to me that the local option is the more reasonable of the two taxes. The district promises it will provide funding for teachers, textbooks and other things that immediately impact our children's learning. In contrast, not a single dollar of the modernization bond money will be used to shrink class sizes, acquire new learning materials or preserve educational programs.

We entered this recession with little in our rainy-day fund for schools. The local option can be a lifeline to see us through to better times. However, because so many Portland families are trying to weather their own financial storms, the Portland school board must withdraw the modernization bond from the ballot and shelve it until our economic sun starts shining again.

Source: Oregonian