Failed Minnis Plan was a Patchwork of Shady Deal Making

By Frank Carper of Salem, Oregon who describes himself as "a longtime observer of, but not a participant in, the legislative process."

Yesterday, there were two articles in the Statesman Journal by Steve Law, outlining the bizarre partnerships that came together to push Karen Minnis’ preposterously titled “Stable Schools Plan” and an afternoon update announcing its failure to even come to a vote.

The main culprits behind the scheme were the school kids' favorite sellouts, the Oregon School Boards Association (OSBA) and the Confederation of Oregon School Administrators (COSA), though they were recently joined by Portland Public Schools (PPS). All three of these groups came together to push a losing proposal that, once you got past the title, would have done the following:

1. Cut approximately $320 million from schools statewide this year, and fall approximately $300 million short of a no-cuts budget for 05-07.

2. Lock in these cuts by putting a spending cap only on schools.

3. Provide special funds for “successful schools” without defining what makes a school successful.

This leads to the obvious question of how could these three organizations have been willing to back a plan that would wreak such devastation on Oregon’s public school system.
With each group the specific reason was different, but their motivations boil down to one simple value – selfish greed.

I won’t go into detail about the political deal that’s been cut between Karen Minnis, the House Republicans, and OSBA & COSA. That has been written about enough. But let me just say this –– OF COURSE A DEAL HAS BEEN CUT!

In April, the House and Senate Democrats invited school administrators and school board members from every district in Oregon to attend a forum on school funding in the Capitol. The response was overwhelming with approximately 100 administrators attending. There wasn’t just a lack of support for the Minnis plan at this meeting, but outright opposition from across the state. This meeting led several legislators to conclude that COSA and OSBA are no longer legitimate representatives of their memberships, a feeling that is stronger today than ever.

The PPS deal is a much more obvious classic quid pro quo political deal. Minnis stuck in an 11th hour provision that will allow PPS to collect $15 million in property taxes a year for the next five years. In exchange, the PPS board chairs have allowed themselves to become the public patsies for the plan. To anyone working in the Capitol, their Oregonian op-ed was obviously written by either their lobbyist or the Speaker’s office. Its clear that neither of the board chairs really understands the Minnis plan. Otherwise they never would have put their names to such a preposterous column.

This line in particular: “While not a perfect solution, the speaker's plan is an important first step toward providing Oregon schools with stability and predictability” is virtually a direct quote from every news release sent out of the Speaker’s office regarding the plan.

Here is what the PPS board chairs either don’t know or are unwilling to accept: even with the extra $75 million in property tax revenue PPS would actually lose money under the Minnis proposal. By locking in budget cuts, The Minnis plan would cut more than $75 million for PPS over the next five years. Shouldn’t the PPS board chairs be asking these obvious questions: Why can’t the House make this extra money for PPS available on its own merits? Why does it have to be attached to this proposal?

Instead, they’ve been duped into supporting something that will cut PPS further in the long run, and significantly damage the rest of the state. And, odds are pretty good that Minnis will cut them out of the bill in order to get back some of the 9 Republicans who refused to vote for this plan (for once: hooray for the anti-taxers?), and they’ll be left looking pretty stupid once they’re out of money from every angle on a bill they’ve advocated for.

This leads me to wonder – What would motivate Minnis to make a special deal with Portland public schools? Disdain for anything Portland runs deep in the GOP caucus. Minnis is essentially asking her members to do two things that are considered anathema to most House Republicans. First, vote for a tax increase. Second, vote for a tax increase that will only benefit Portland!

Why would that be? Could Minnis’ political future be wrapped up in her proposal? Your guess is as good as mine. I hope the future is tied to this flawed proposal and I hope that when she runs for higher office (this bill and murmurs in the Capitol suggest she may be gearing up to run for State Superintendent of Public Instruction next year)

I hope this is a lesson for everyone that’s cut a deal with Karen Minnis or House Majority Leader Wayne Scott. They don’t have the support of their caucus to cash every check their mouths are writing, and they’re cutting a lot of bad deals: watch out!

Comments

  • Terry Olson (unverified)
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    I don't know if Bobbie Regan and David Wynde actually wrote the op-ed piece themselves, but I do know that their support of Karen Minnis' school (de)funding plan is entirely in keeping with their performance to date as board members of the state's largest school district.

    I have never heard either speak out publicly for increased school funding from the state, or for the tax reform that would enable it. Rather, they have led the charge to close what they term inefficient or underperforming schools to save the district paltry sums of money, with little regard for the effect such closures have on the vitality and appeal of the district as a whole.

    It's little wonder that such "educational" leaders would ally themselves with a politician who has shown no concern for adequately funding public schools in her short legislative career.

  • David Wynde (unverified)
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    Terry

    Where have you been? At every school board meeting during the current legislative session, we have had a legislative update as a standing item on our meeting agenda. Bobbie Regan has repeatedly called for stable and adequate funding for all of Oregon's schools including Portland. We have both been in Salem numerous times this session meeting with legislators, other education activists, and staff to lobby for funding.

    Reasonable people can disagree about the best tactics to accomplish our goals for PPS but you are just plain wrong in your statement about our public stance on K-12 funding.

    Frank Carper is wrong on several points too. The Minnis plan makes no diffeence to K-12 funding for the next biennium. It does not take effect until next time around. Bobbie and I are quite capable of writing our own op-ed piece, without any assistance from the House Speaker, thank you. In the meeting that Carper refers to in April (Unlike him I was actually there) there was no significant discussion of the Speaker's proposal; it was a discussion about the level of funding required this session.

  • ron ledbury (unverified)
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    David Wynde,

    Could you ask each employee of PPS to sign a document that acknowledges that their pay is in complete and total satisfaction for all labor services that are performed within a budget cycle (within their respective term of employment)?

    At least as to the next budget cycle it would end any legal uncertainty about whether the employee's pay for the prior period was somehow incomplete.

    This would deal with the stupid issue of the PERB always demanding to remake those prior pay decisions today to raise that past pay for past work. This is unquestionably the single biggest obstacle to stable and adequate funding that we face today.

    How much of the 500 million dollars of Pension Obligation Bonds that PPS agreed to support are still left in PPS' Lump Sum Account held by the PERB and re-entrusted for investment to the Oregon Investment Council?

    If you demand a letter from each PPS employee that their current pay is in complete and total satisfaction for service today could we not then demand the return of the Pension Obligation Bond money for use in covering just the ongoing costs associated with keeping schools open? This would be consistent with the sworn duty of PPS board members to meet their obligation of offering educational services to the students.

    I am more concerned with "deals" if there be any pertaining to the game of pretending that future PERS costs associated with employment decisions today cannot also be measured today.

    If the notion, as has often been repeated, that local governments are helpless to address PERS related costs then this implies that such costs are not within the bargaining power of PPS and likewise cannot form the basis for any legal claim by any employee against the PPS directly. Demanding an employee signature that acknowledges this standard rhetoric, complete and total satisfaction today, would correspond to the claim of the PPS has limited bargaining authority over PERS matters.

    If either the PPS or the employees of PPS had used the trustee services of Wells Fargo and Wells Fargo subsequently sought, after the fact, to make a claim for insurance coverage upon PPS for their own unsound pension trustee plan design or for their own investment returns that fell below that found within their predictions (from their assumptions) would PPS just cut a check to Wells Fargo for 500 million dollars? Surely the board members would owe a duty to the public to at least put up a fight against Wells Fargo's demands, and demand that the problems be fully and completely resolved. I believe that the PPS duty to the public is no less strict just because it is the PERB that is acting as the trustee, rather than Wells Fargo. The continuing payment by PPS of PERB demands, those demands other than the 6 percent noted in the Oregon Constitution, is little different than perpetually writing a check to Wells Fargo, over and over and over again, to cover for their private liability. The local school district should not act as the reinsurer, or surety, for PERB or the Oregon Investment Council.

    How much money is PPS spending during the 2004-2005 and the 2005-2006 school year to cover for such extra PERB demands? The number should lump together payments from either the Employer Lump Sum Account entrusted to PERB and the "employer contribution" payments that are pegged, for convenience, to total salaries from PPS (otherwise refered to as the employer percentage rate). Is this number greater than anything in the Minnis plan for offering PPS greater local taxing authority? Of course it is greater.

    Demand that employees of PPS acknowledge that their pay now is in total and complete satisfaction for their services, consistent with the claimed outer limits of PPS bargaining authority. Demand that neither the PERB nor the OIC seek to hold PPS responsible as a reinsurer for their own plan design flaws and their own disappointed investment expectations.

  • (Show?)

    David,

    With all due respect, this statement in your comment above is incorrect:

    "In the meeting that Carper refers to in April (Unlike him I was actually there) there was no significant discussion of the Speaker's proposal; it was a discussion about the level of funding required this session."

    The staff took highly detailed notes/minutes of the meeting. Indeed, most of the meeting was about the level of funding needed this session, but you must not remember the part of the meeting devoted to dicussing several stability plan options. This is the EXACT question put to participants at the April meeting:

    Education Stabilization Plans Background: Since voters passed Measure 5 in 1990, capping property tax contributions to schools, the state has struggled to stabilize school funding. In the 2003 session, House Democrats prepared a constitutional proposal to provide a “floor” for education funding (see Item 2 below). This session, House Speaker Karen Minnis has reinvigorated the conversation by proposing to dedicate 50 percent of income tax revenues to schools, subject to an approximate four-percent cap on spending growth from year to year (See Item 1 below).

    We look forward to hearing your comparative analysis of these proposals, based on your appraisal of whether each addresses the issues of stability and adequacy.

    Item 1—Four-Percent Annual Cap: HB 3460 would set a statutory cap on funding for K-12 education (eight percent for the biennium, which is roughly four percent per year). The base for 2007-09 would be 50 percent of the personal income tax revenues. The plan also formally dedicates half of the personal income tax to K-12 funding. Dedicated funds that exceed the four-percent cap on spending growth would be split and sent to two funds: half would go to the Education Stability Fund (with the current constitutional constraints on their use); and half would go to a “Successful Schools Fund,” to be used for grants to improve student achievement in low-performing schools and for innovative projects.

    Item 2—Adjusted Floor and Ceiling Plan: HJR 58 (from the 2003 session) sets a constitutional floor for the K-12 budget, based initially on the 2001 per-student funding. The new floor would be calculated by adjusting for changes in the student population and for inflation. After 2010, the floor would be set by a floating five-year per-student funding average, adjusted for student population and inflation. The ceiling would be set by the Quality Education Model. The state constitution would require the Legislature to provide funding at a level that falls between the floor and the ceiling. Funding above the floor would be eventually captured into the new floor by the rolling five-year model. Funding below the floor would require a supermajority vote of both chambers.

    Item 3—QEM Floor: HJR 23 (2005 session) sets a constitutional floor for the K-12 budget, based on a growing percentage of the funds necessary to fund the Quality Education Model. The resolution would require funding at 80 percent of the QEM in 2007; at 85 percent of the QEM in 2008; at 90 percent of the QEM in 2009; and at 95 percent of the Q EM in 2010. Thereafter, the floor would be a five-year “Floating Reference Average per Student,” adjusted for student population and inflation. Funding below the floor would require a supermajority vote of both chambers.

    Item 4—“Basic Education Floor”: HJR 35 (2005 session) is a constitutional amendment that directs the Legislature to define “basic education” and “quality education” in the law. The Legislature is then constitutionally bound to appropriate enough money to achieve a “basic education” for every Oregon student. This plan enables individual school districts to appropriate local funds, using an ad valorem property tax, if the voters approve such a tax, up to the amount necessary to fund a “quality education.” The joint resolution contains no provision that would allow funding below the “basic education” floor.

    QUESTIONS:

    1. What do you see as the strengths and weaknesses of the plans listed above?

    2. Which plan would be most helpful in providing “stability” and “adequacy” for funding in your school district, and why?

    3. What other ideas do you have for stabilizing education funding?

    Our further notes have exact quotes from the following school districts either opposing all or portions of the Speakers' plan (option 1): Clatskanie, Monroe, Hood River, Bandon, Forest Grove, North Clackamas, David Douglas, North Santiam, Bethel, Springfield, Newberg & McMinville.

    I can provide these exact quotes, but it would make this comment very very long. The STRONG conclusion reached by the House Democrats in attendance was that that there is little to no support for the Minnis plan, as currently written, among those who would know best how it would impact schools - administrators and school board members. The strong opposition among house Democrats, and support for a better alternative plan written by Rep. Galizio, was/is based much on the feedback they received at that meeting.

  • LT (unverified)
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    Good comment from John Isaacs--glad to see that, once again, what a lobbyist says is not what all of the members of an organization believe. And my suspicion is that school board members elected this year and about to be installed might have views on school funding which may or may not be reflected in the statements of legislators or lobbyists.

    I am all for asking the individuals involved where they stand. My guess is that the new board members are no more a monolith than any other group of Oregonians, such as "parents believe..." " teachers believe..." etc.

  • (Show?)

    How sad to see that Wynde is not speaking honestly about either the meeting referred to, or the unstable Minnis plan, which has next to zero support among the people that actually have a direct interest in delivering educational services to the schools.

    My disillusionment with the board grows ever deeper.

    Not only is this a pressing issue because of the direct impact on students and the community, but also from the perspective of the long-term economic health of the state. What CEO in their right mind would think of relocating their company to Oregon with an unstable school funding system, and no solid commitment to providing stable and ADEQUATE funding for public education?

    It is also worth preempting the cries of the unstable Minnis backers, when the reality is that cutting taxes and creating more tax giveaways only exacerbates the problem and does nothing to entice more companies to Oregon. We are already the lowest tax state for corporations in the nation. But without proper school funding, it won't do anything to increase business in the state, much less actually you know.. provide for the educating Oregon students.

    We need honest brokers for students and teachers representing them in the school boards. This sort of obfuscation is simply unacceptable.

  • howard (unverified)
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    Mitch Gore asks: " What CEO in their right mind would think of relocating their company to Oregon with an unstable school funding system, and no solid commitment to providing stable and ADEQUATE funding for public education?"

    With the exception of Portland District 1J in "crisis" years when teachers are working without a current collective bargaining agreement, corporate CEO's can anticipate the children of their employees receiving a good public school education in most Oregon districts.

    I would be interested in hearing of those districts, with the exception pf Portland 1J, that are so "inadequately funded."

  • Ruth Adkins (unverified)
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    Ummm...how about (to take a random Google hit) Central Oregon--according to this article, "Sisters trimmed five days off its instructional calendar this year and eliminated three teaching positions, among other belt-tightening moves."

  • David Wynde (unverified)
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    Jon

    Thanks for the detailed clarification. My mistake. Sorry.

    My recollection of the meeting, which lasted for several hours, was that the main focus was on the funding number for K-12 for this session.

  • howard (unverified)
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    Ruth:

    The latest from WWW.nuggetnews.com indicates a more adequate funding picture.

    Committee passes school budget 6/7/2005 A 2005-06 general fund budget featuring a handsome 9.2 percent increase from the current year was approved by the Sisters School Budget Committee Monday evening. The committee posed no criticisms and few questions for Superintendent Ted Thonstad before giving unanimous approval to numbers that were nearly identical to those he first unveiled two weeks ago.

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