Oregon Supreme Court decision ruled a similar tax in Eugene was unconstitutional


The House Revenue Committee unanimously approved Tuesday a bill that would clear the way for the Ashland School District to seek voter approval of a local option tax totaling up to 20 percent of its operating budget in the May 2008 primary.

Plagued by declining enrollment and a reduction in state support, the district is looking to replace its youth activities levy in part because of an Oregon Supreme Court decision that ruled a similar tax in Eugene was unconstitutional.

The youth activities levy, assessed by the city of Ashland, has won overwhelming support from city residents in three elections, including 80 percent of voters in 2003.

It generates about $2 million a year and must be spent for extracurricular programs. It expires in 2008.

"We probably have the most deluxe sports activity program in the state," said Juli Di Chiro, superintendent of the Ashland School District.

A similar city levy in Eugene, where the bulk of the revenue was turned over to schools, was ruled unconstitutional by the Supreme Court on grounds it put the school district above a voter-approved limit on spending.

The high court upheld a decision by the Oregon Tax Court which said that because the majority of the city revenues had been raised for school purposes, they must come under the 1990 Ballot Measure 5 cap.

Even with support from the city, Ashland schools remain under the cap, Di Chiro said. But the district decided to stick to the spirit of the Eugene decision and opt for its own levy, she added.

Under House Bill 2641, sponsored by Rep. Peter Buckley, D-Ashland, the cap on local option taxes increases from 15 percent to 20 percent of a district's operating budget. The tax can increase — percent a year automatically until it bumps up against the Measure 5 cap.

Di Chiro said it was uncertain how much the district would ask voters for in May, but the rate would probably be below the $1.38 per $1,000 of assessed valuation raised from city property owners.

Rising property values and taxing all residents of the school district will keep the rate low, Di Chiro said. And the money can be used for core academic programs in addition to school activities such as music, drama and club sports.

Buckley said the important issue now is to get the bill through the House and over to the Senate before the Legislature adjourns, a date some predict will come in mid-June.

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