Hans Running is outraged. During the four decades he photographed Oregon school kids, Running got his business the same way. School districts always awarded photo contracts to the company that could do the highest-quality work at the best price for the students--and Running got his share, including a few contracts with the Beaverton School District. Now, however, the district is changing the rules by asking bidders to pay cash incentives for the exclusive right to take school photos.

"It's just wrong," Running says. "When schools take kickbacks, they can get away with murder. It's bad for students and everyone involved."

The district's recent request for bids says it's looking for "benefit-sharing considerations (e.g. cash payments, rebates or non-cash incentives)," but goes on to note that "cash considerations will be given preference."

Just how much cash the district expects companies to ante up is unknown. Bruce Griswold, Beaverton's associate superintendent for fiscal affairs, did not return repeated phone calls last week, the bid deadline. But sources present at a meeting for interested bidders say Griswold is looking for a minimum of $100,000 per year for 10 years.

In these days of constant budget cuts, school districts are increasingly looking to private companies for cash, whether it's allowing Coke in their vending machines or inviting Taco Bell into their cafeterias. But Beaverton's request for more than $1 million for its photo contract is different. For starters, it may be illegal.

In a 1974 opinion, Oregon Attorney General Lee Johnson found that a school district, "as [the students'] agent, has an affirmative duty to act in good faith to secure the best contract possible in terms of the quality and price of...portraits," and that state law prohibits schools from signing photo contracts when the effect of benefits it receives from the photographer "is to increase rather than decrease the cost of photographic service to individual students."

The Beaverton contract covers a number of services, from school pictures to student ID cards to yearbooks. To make up the money given to the district, the winning bidder will probably stack extra charges on these services. "That's just pure economics," says Running.

With more than 35,000 students in the Beaverton School District (the state's third largest), it wouldn't take long to recoup the cash paid to the district. If all students were to participate and each pay just $3 more next year than they did this year, the winning bidder could more than cover an extra $100,000 given to the cash-strapped district. With yearbook prices going as high as $45, parents probably wouldn't even notice a slight increase. So what's the problem?

"If photo companies are recouping their investment by charging higher prices, then you're creating tuition, aren't you?" says Marc Abrams, a member of the Portland School Board. Abrams, who backed the Portland School District's lucrative contract with Coke, says Beaverton's photo strategy seems quite different from Portland's beverage deal. "With Coke, we controlled the prices," he says. "We didn't say Coke could charge more for giving the school district money. They're actually charging [students] less."

Running also claims that the district will be less inclined to complain about a photography company's service if they are counting on its cash. "Schools that take kickbacks go to great lengths to justify or overlook bad service or bad quality," he says. "This is not disclosed to kids."

Final bids for the photography contract were due Nov. 7. Though the proposals won't be made public until after the district has awarded the contract, sources say at least two companies seemed willing to put up the kind of money for which the district is hoping.

The district's sudden desire to cash in on its photo contract is part of an initiative to find new sources of money for student programs. "Budget reductions have increased the pressure to find alternative resources to fund critical services that will help our students succeed," reads a district explanation of the initiative.

According to Beaverton School Board member Craig Irwin, however, no one on the board authorized the district's request for cash incentives from photographers. In fact, he says, he and his colleagues didn't even know the idea was being discussed.

"This hasn't been brought to the board at all," Irwin says. "This is a very significant amount of money, and I'm definitely going to look into it. We certainly don't want to do anything that would be detrimental to students and their parents."