Carole Smith's greatest asset as Portland Public Schools' superintendent has been her ability, after 15 months on the job, to minimize disruption to the state's largest school district.

The three-year tenure of Smith's predecessor, Vicki Phillips, was marked by an embarrassing $620,000 payout to a fired human-resources director, school closures and curriculum changes. By contrast, Smith embarked on her first year as superintendent of 46,000 students with the intent of making nice.

Yet fall 2008 was unkind to PPS. As the economy slid, Gov. Ted Kulongoski ordered the state's school districts to cut spending.

Amid this recession, and as Mayor Sam Adams takes office promising a greater hand in cutting the city's high-school drop-out rate, WW asked Smith, 54, about what looks like a potentially troublesome year.

True to form as a political leader, Smith raised a piece of scrap paper with a red "X" on it each time she didn't want to answer a potentially controversial question. What follows is a condensed version of that conversation and several follow-up calls—with answers to the questions that made Smith nervous.

WW: What's the best part of your job?
Carole Smith: Oh, man. There's a lot. I still feel excited to do this job. We're building a great system. We have great teachers. We've had a number of our schools not meeting AYP turning corners. That's exciting. I love that. [AYP is "adequate yearly progress," the term devised by the feds under No Child Left Behind.]

Clearly, the worst part is making budget cuts. But you're in contract negotiations with teachers right now. What sacrifices will they have to make?
I can't talk about that one.

Oregon voters rejected a ballot initiative in November from Bill Sizemore on merit pay for teachers. Are you open to the concept of merit pay?
There's value in a system that works to reward teachers, since the relationship between teachers and students is the primary place for impacting student achievement. You would want any system to be based on incentives and not be punitive. What happens has to be determined locally, not externally. You have to have a really transparent way to measure that, one that is trustworthy to all parties involved. And you have to have additional money.

Mayor Sam Adams has said he wants to be the cheerleader-in-chief and the chief accountability officer for Portland's public schools. Which of those titles would you least prefer he take on?
I am looking forward to having Sam as a great partner, and having our mayor already have education as the cornerstone of his agenda is huge. It's great that he's looking across all districts in Portland and saying, 'How do I help make this visible?'

Let's try again. So which title do you prefer least? Chief accountability officer? Or cheerleader-in-chief?
I like chief fundraiser and friend-raiser.

But, seriously, what can Adams do as mayor? He's not on the school board. And he's not making decisions about the budget. Isn't education just something that polls well?
He can use his bully pulpit. He can draw attention to a group of kids and ask, 'How are we ensuring their success over time?' 'How are we getting more of them to graduate on time?' And he can make that part of what he talks about all the time.

How long do you expect to be here?
You get to do this job as long as you get to do it. I feel honored to get to be a part of helping to build a chapter in the school system here.

How will you measure your success here?
By jamming the circuits on the housing market because people are coming to Portland to be in our schools.

The four most powerful people in Portland's education circles—you, Adams, Dan Ryan of the Portland Schools Foundation and Rebecca Levison of the Portland Association of Teachers union—are all in same-sex partnerships. Is that significant in any way?
What's cool is that everyone is in their roles because of their qualifications and because they're the best people for those jobs. And that's what's important to the people of Portland.

This year PPS was forced to take an immediate hit of $6 million, or a little over 1 percent of the district's approximately $450 million annual budget, as a result of the recession. Next year, state projections show the gap will grow to $22 million.