$UPER $TRUGGLE: Superintendent Carole Smith is fighting to preserve K-12 funding despite the worst recession in decades.

One month after Carole Smith, superintendent of Portland Public Schools, released her initial proposed budget for the upcoming school year, she and other school district leaders have learned they will be getting much less money than they expected from the cash-strapped state.

Yet Smith’s decision in March—to base PPS’s $434 million budget on a phantom $6.4 billion allocation for K-12 education from the state and federal stimulus money—was then so optimistic, it caused some to joke Smith was running the Make-A-Wish Foundation rather than the state’s largest school district.

The latest state budget projections estimate a possible $5 billion plunge in revenue for the 2009-2011 biennium, which means K-12 spending in the state could fall as low as $5.4 billion. And in the event available education funding does plummet, Gov. Ted Kulongoski is asking school district superintendents statewide to develop “worst-case scenarios.”

But the superintendent and elected officials with Portland Public Schools, a district that educates 46,000 students, have been slow to accept that conclusion. That reluctance has produced words of caution from two unlikely sources: a pro-education Democratic governor, who wrote to superintendents across the state April 9 to tell them to prepare for the worst, and the Portland Association of Teachers union.

District representatives are still hoping Kulongoski and the Legislature—with the help of federal stimulus dollars, the state rainy day fund and possibly new revenue sources—will find enough money to spare PPS and other districts deep reductions.

The alternative, they say, is cutting 25 school days or 380 teachers, 10 percent of the total teacher workforce. “Given how dramatic the impact on education for kids would be at some of the numbers that are being floated, I think it would be very unfortunate if we were to say, ‘OK, we’ll take the lowest number out there, settle for that and proceed accordingly,’” says school board member David Wynde. “I’m not willing to do that at this point.”

The governor, however, is telling PPS the district may have to. “By no means does the governor want to see the lower number, but it would be irresponsible not to budget with that as one of the scenarios,” says Kulongoski spokeswoman Anna Richter Taylor. “It’s hopeful [to base a budget on higher numbers], but it’s not sound budgeting.”

The Portland Association of Teachers, representing 3,800 PPS teachers, guidance counselors and school psychologists, supports the push by the school board and the superintendent to get what the union considers adequate state funding. (The bulk of the state’s K-12 education dollars go toward paying teachers’ salaries.)

But at a time when the union is negotiating a new contract with PPS, union president Rebecca Levison says she’s lost confidence in the budget approach taken by Smith and the district’s leadership. Levison says they’re sending “mixed messages” by pushing for the highest possible financial contribution from the state while also talking with teachers about withholding their cost-of-living increases for the current and upcoming school years.

At the same time district leaders say they’re working to prevent cuts, they are also asking the union to agree to add two days to the school year and 30 minutes to the workday without added pay. The superintendent’s chief of staff, Zeke Smith, says those aren’t mixed messages, but wouldn’t discuss contract negotiations. He denied the district’s move to set its budget at $6.4 billion was politically motivated.

Other Portland-area school districts are taking a more conservative budgeting tack than Portland. The David Douglas School District in outer Southeast Portland is basing its projections on a $5.9 billion state contribution to all Oregon districts, not the $6.4 billion Smith and the PPS board were banking on.

“Our choice is to be a little more conservative,” says Frieda Christopher, chairwoman of David Douglas’ school board. “It’s easier to add than take away,” if projections improve.