One of the reasons given for the proposed sale and privatization of an invaluable public treasure like the Elliott State Rainforest is to raise funds to educate Oregon’s schoolchildren. Therefore, it may be of interest to all of Oregon that four rural taxing districts are on the brink of making a decision that will cost the State School Fund upwards of half a billion dollars over the next 20 years.
Estimated at $7.5 billion the proposed Jordan Cove LNG export terminal is touted to be the largest single development project in Oregon history. Sited on the North Spit of Coos Bay, supporters trumpet that the terminal will more than double the tax base of disadvantaged Coos County. From its inception in 2004, Jordan Cove LNG has been marketed by local proponents as a savior that will provide as much as $52 million in annual tax revenue, funding schools, adding more deputies and paving our roads. These claims are made despite the project’s location within both an urban renewal district as well as an enterprise zone. The latter will provide Jordan Cove Energy Partners, wholly owned by Canadian company, Veresen, Inc., with an automatic five-year property tax exemption.
In January, however, Coos County citizens learned that many of these same proponents have decided the Jordan Cove spoils simply cannot be left to the vagaries of established property tax revenue distribution and management and have devised a scheme they call the Community Enhancement Plan (CEP). The CEP will divert the revenue into two private nonprofit organizations one ostensibly to provide extra funds to local schools and the other for economic development and waterfront revitalization.
Veresen has long maintained that it does not want nor need the enterprise zone abatement and company spokesman Bob Braddock told an audience in July 2012 that it had “made a commitment” to make an estimated $30 million annual payment in lieu of taxes to the county tax collector. In order for the CEP to work, however, the plan architects asked the company to apply for not only the standard exemption but also for the fifteen year Long Term Rural Enterprise Zone Exemption. All four enterprise zone sponsors, the Port of Coos Bay, the cities of North Bend and Coos Bay and the county, must unanimously approve the extended abatement period.
According to the CEP architects, the application will only be approved on the condition Veresen agrees to pay “service fees” equal to the taxes into the two nonprofits. The conditions of approval coupled with the fact the company was asked to apply for the extension has led to a countywide debate as to whether these are private funds or if they should be treated as public funds subject to Oregon’s open meetings and public records law.
Like the sale of the Elliott Forest, one of the main reasons given for using private nonprofits rather than a public trust is to help educate our children. Thanks in no small part to legislative actions in Salem that provide special assessments to large timber owners and incentive programs like enterprise zones, Coos County realizes only 30% of its tax potential. Consequently, the State of Oregon must backfill 74% or $57 million annually to educate the county’s 9,400 students, thereby limiting resources available to each of Oregon’s 561,000+ students by $102 per year.
The Jordan Cove terminal would bring nearly $20 million annually to the Coos Bay School District, reducing the backfill provided to the district while at the same time raising the resources available to students everywhere. CEP promoters refer to this method of equalization as “claw back” and consider it “Draconian” so with a $15,000 contribution from Veresen, they formed the South Coast Community Foundation (SCCF) last summer. The CEP directs 50% of Jordan Cove’s service fees to SCCF.
The founding board members, Senator Joanne Verger, John Whitty and Bill Lansing, freely admit SCCF was formed specifically to circumvent claw back in order to retain the money wholly for local schools while continuing to rely on the State School Fund for three quarters of the county’s education costs. SCCF is so intent upon thwarting equalization it has inserted a “poison pill” into its bylaws where if the State dares to equalize funds distributed by the foundation, the board will simply not spend the money on education at all.
There are several other components to this potentially billion-dollar privatization scheme and it has divided the county. State Senator Arnie Roblan, a retired educator and Representative Caddy McKeown a former school board member have urged local officials to approve this plan. Opponents have labeled it money laundering and consider it a scam to put self-appointed power brokers in control of public money without any accountability. Regardless of which side you are on, the CEP, if enacted, will impact all of Oregon.
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