From time to time, my musings get pretty political. Most often I’m steamed about some miscreant whose gotten into office for the single purpose of long term employment at our expense and is behaving badly. Or I’m ranting at some dumb government policy or action.
This time, however, the political comment is a pat-on-the-back to some local Oregon officeholders and a civil servant or two who did something right; very right.
To do so, I’m going to get a bit wonkish but hang in there. There’s really no other way to describe what they did or how they did it.
We’re talking about a new public safety building in Roseburg … a marvelous blend of function, community enhancement, long range planning and proper use of an intricate tool of government.
That tool is tax increment financing (TIF). Because it does have some downsides, I’ve never been a strong advocate for using it. Fact is, I’ve seen it misused a number of times; opposed it and said so. But not here.
The Roseburg urban renewal area covers most of all the commercial property in the SW Oregon valley east of Interstate 5, extending from north to south city limits. Give or take some enclaves.
Let’s say, strictly for example, the assessed valuation for tax purposes within that UR district is a million dollars. It’s really much more than that but we’re talking example here. Also my simple math abilities.
Oregon law allows a 3% increase in that assessed value each year. So, for our purposes, next year’s income would be $1,030,000. The year after that $1,061,855. And on and on. Each year is worth 3% more taxes to the several government entities that rely on that income. That might be the Roseburg School District or the City of Roseburg or a local highway district. And some others. Each gets a piece of the tax pie.
Tax increment financing freezes that income at a certain point; usually the beginning of a tax cycle. So, those entities of government receiving tax income from that property essentially have their incomes frozen, too. That’s because new dollars over that base go to a purpose selected by, in this instance, the City of Roseburg. As those dollars build each year, the higher valuation income goes to the city to pay off bonds floated to build the safety center. Not a tax increase. But certainly a tax shift.
The downside is two fold. First, in time, frozen entities receiving taxes for their operations will see costs increase but not their income from the usual basic source. So they’ll have to look elsewhere. Maybe tries at one or more bond issues of their own.
Second, some see this maneuvering of our tax dollars as a way for governments to circumvent going to the voters to see if they want the new building or airport or whatever the subject may be. Sometimes they don’t. With TIF, they get it anyway.
Both of these negatives are very real. TIF has been challenged in various courts. Decisions have been mixed.
But there are upsides. In the Roseburg Safety Center case, both fire and police were suffering from ancient, totally inadequate housing so bad their missions of community protection were affected. Equipment necessary to maintain fire safety could not be housed. Required training of fire and police personnel was restricted or impossible locally given conditions. City safety and those who provide it were endangered.
Recognizing the need and their sworn responsibility (if not liability) elected city officials opted for TIF using the urban renewal area income rather than the delay and expense of one or more bond issues. Issues that could have been defeated.
The professionals who were to use the new facility were given great leeway to research what other cities had done, look for what worked and what didn’t, huddle with architects and come up with recommendations to fill not only today’s needs but those of 30-40 years down the road as the city grows.
They did it. In spades! I’m not an expert qualified to determine what the city needed. But after a room-by-room look, my sidewalk engineering expertise tells me they couldn’t have done much better.
Yes, those very real downside tax issues apply. No question. And some others I didn’t mention. But, in this instance, taxpayers were well-served. Too often, especially in school bonds, slimming down enough to get voter approval most often results in some real needs not being met, future needs ignored and temporary class rooms being used the day a new school opens. Outdated from the get-go.
I am, and will continue to be, critical of many aspects of politics and government. But in this instance, I’m an unabashed believer that the system worked and taxpayers (us) were well-served.