House Bill 2748 is one of the more curious bills in this session of the Oregon legislature. Sponsored by the Committee on Education, it would prohibit Oregon school districts from charging tuition to out-of-district students who live in Oregon. Many Oregon school districts, including Portland Public Schools, the state's largest, collect tuition from out-of-district students. The tiny Riverdale School District, sandwiched between Portland and Lake Oswego, depends on out-of-district students to keep its high school open. Forty percent of the district's students (roughly 230 of 567) come from other Oregon districts and half of those pay tuition: $5560 for kindergarten running up to $11,950 for high school.
The bill's chief proponent, Representative Sara Gelser of Corvallis, who chairs the Education Committee, didn't know about Riverdale's odd circumstances when she introduced the bill. She's agreed to amend it to grandfather Riverdale in, under some conditions. The bill is still troubling, and not just because it's a cure in search of a disease. The Riverdale grade and high schools (there is just one of each) are putting out an educational product desirable enough that parents who can't afford to live in the district will pay nearly $12,000/year to send their child there. Instead of forcing Riverdale to stop charging tuition, the Education Committee ought to be looking for ways to get other school districts to improve their own products. Shouldn't every school in Oregon be one that is worth paying for?
Riverdale does spend more on direct classroom (teaching) and classroom support than does PPS, $8749/student compared to $7195/student for Portland. It occurred to me to dig into the numbers a bit and see where the differences come from.
The first big difference is that Riverdale funds more teachers. Its student-teacher ratio is 16.8:1 compared to 19.7:1 for Portland -- 17% more teacher per student. The second difference, noticeable but not as significant financially, is that Riverdale's teachers are more educated and experienced than PPS's teachers: 88% have master's degrees (69% of PPS's do), and they have an average of 15.6 years of experience, compared to 14 years for PPS's teachers. Teachers' salaries in both districts are figured on a matrix that runs from $35,000 to $73,000; a teacher's salary increases based on years of experience and on education beyond a bachelor's degree. So the combination of education and experience results in Riverdale paying a higher salary per teacher even though the underlying matrix is similar to Portland's.
The Wall Street Journal famously identified Riverdale as the third-richest school district in the country. The Journal was not quite accurate; Riverdale has the third-highest household income of any United States school district, but that's only partly reflected in the district's finances. The Riverdale School District is discernibly richer than Portland, but not by a wide margin: despite having no commercial or industrial tax base, Riverdale has $1,007,000 of taxable real estate per student. Portland has $858,000 of taxable real estate per student.
What would bring Portland's tax funding up to Riverdale's level? Part of the difference is property value per student. The PPS system has about 47,000 students, so adding $150,000 of assessed value per student would require about $7 billion of assessed value (the value on which tax bills are based), or $10 billion of real market value (assessed value is running at about 70% of real market value). That's equal to two Intel plants and unlikely to happen. However, PPS includes at least $4.3 billion of what the state calls "excess value" in urban renewal districts established by the City of Portland. Riverdale has no urban renewal districts. Put another way, more than half the difference per student between what Riverdale taxes and what PPS taxes can be explained by Portland's urban renewal districts keeping $4.3 billion of property value from supporting the Portland Public Schools. (Some bright soul at PPS headquarters has likely worked this out.)
Part of the difference is tax rate: PPS is charging $7.26 per thousand, none of which is bonded indebtedness. Riverdale charges $8.25 per thousand, of which about a third is a bond levy for the replacement grade school it built a few years ago. If Portland taxed at Riverdale's overall rate, it would generate an additional $858 per student, which would cover the other half of the gap in classroom cost per student.
Though I don't support Representative Gelser's bill, I am grateful that her idea spurred me to look into these figures and see just how much urban renewal is costing Portland's schools. Maybe PPS will take urban renewal more seriously.