The Largest Property Tax Bond in Oregon History Should Have Been Much Bigger

Just one year after voters passed the largest bond measure in Oregon history, PPS now acknowledges that Portland Public School-Bond Measure 26-193 should have been much more – between $80 and $136 million more.

PPS originally asked voters to approve a Bond measure for an estimated $750 million facility renovation project to, “improve health, safety, and learning by modernizing and repairing schools.” This is a worthy project, which I discussed in a post last year about the original Bond. The Bond Measure was approved by voters in 2017.

The net increase in property taxes for each property in the PPS tax district was originally supposed to be $1.559 per $1,000 of assessed value – about $800 in additional taxes each year for a home worth $500,000.

It turns out, however, that the estimate for the Bond was not based in reality. The Board has now found that district staff promised the Board that projects would be much cheaper than the actual construction bids proposed. For example, the combined estimate for the Benson and Madison high school project was $60 million less than the cheapest bids!

Amy Kohnstamm, who chaired the school board’s Bond Committee last year, was recently quoted as saying, “It sounds like some of the estimates that were given to us were based on some very aggressive assumptions – but that’s not how it was presented at the time.”

At a PPS Board work-session on April 30, 2018, Julia Brim-Edwards pointed to polling that showed voters were marginally more likely to approve a bond costing $750 million instead of one worth $850 million. Ms. Brim-Edwards and other Board members suggested that those figures may have led district officials to present lower cost estimates.

On May 8, 2018, the Board decided to move forward with the projects and seek additional funds to finish them. So what does this mean for property taxpayers in the Portland Public Schools taxing district? Are property taxes likely to go up again?

In my next post, I will cover the options the Board has for filling the funding gap.