With the defeat of a 5.9-mill emergency operating levy for the Oregon City Schools district, the school board plans to make further cuts to avoid a looming budget deficit in 2012.

The levy, which would have brought in $3.4 million annually, was defeated last Tuesday by a vote of 5,603 to 3,907, according to unofficial results from the Toledo Lucas County Board of Elections.

The levy would have cost the owner of a $100,000 home $182 annually.

It is the second time voters rejected a levy in the district since 2009. In August, 2009, voters defeated the same measure 3,605 to 1,119.

The school board had pinned its hopes on the levy passing this time because it made more cuts in the operating budget in the last year. In total, the board has cut $8 million from the budget in the last three years, including 32 teaching positions.

The district also negotiated concessions with both classified and certified teachers’ unions.

The revenue from the levy would have paid for staffing, services and the day-to-day operations for the schools. Without additional funding, the district faces a $2 million deficit in 2012.

“We are disappointed that the levy did not pass,” said Superintendent Dr. Mike Zalar. “We’d like to thank our volunteers for the tremendous job of getting information to voters. But, clearly, the current economic conditions played a key role.”

“The outcome isn’t what we wanted,” said Board President Diane Karoly, “and we know that we have a lot of work ahead of us.”

The board has a list of further cuts it plans to implement, including:

• cutting 20 additional teaching and staff positions, eliminating the Career & Tech program;

• reducing kindergarten from all day every day to all day every other day;

• increasing athletic participation fees;

• reducing cleaning services to buildings;

• eliminating or significantly reducing bus service for all high school students;

• implementing a process to close an elementary school and/or reconfigure the district.

“Discussions involving cuts are never easy, but we know we have to move forward in this difficult conversation,” said Karoly. “We are committed to working with the community, administration and staff through this challenging process.”

Other school board members could not be reached for comment.

Eric Heintschel, vice-president of the school board, would not comment for this article, saying it is the policy of the school board to only allow Zalar and Karoly to comment.

School officials blame House Bill 66 for much of the district’s financial problems. The district has lost over $10 million in funding, which is 20 percent of the annual operating budget, as a result of the bill, which phased out tangible personal property taxes in 2005 for businesses and created budgetary shortfalls for several school districts. Subsequently, the school board cut the budget by over $2 million in 2007-2008, $1.5 million in 2008-2009, and by $3.5 million in 2009-2010.

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