Several years ago, it became painfully obvious that the City Council of Bandon was going on a political spending spree funded by public tax dollars. They planned to expand the budget of the city’s Urban Renewal Agency (URA), which was going to increase the local debt, while draining necessary money from ten other overlapping taxing districts.
As expected, Bandon, a city of 3300 residents, increased the maximum indebtedness of the URA area Plan #1 from $5 million to $12 million and extended it out to the year 2033. This is just one of seven Urban Renewal districts in Coos County. In Fiscal Year 2012, these agencies drained over $3 million dollars in property taxes, which is 5% of the total collected annually for the county. That amount is increasing by 5.6% every year and that percentage is growing. Currently, Multnomah County sacrifices 25% of every dollar collected in property taxes to Urban Renewal and much of that money goes into the pockets of very wealthy developers and private consultants.
Last year the State of Oregon lost over $182 Million in taxes due to “tax increment financing,” which is the process Urban Renewal Agencies use to skim money from schools, colleges, hospitals, fire departments, law enforcement and many other taxing districts that provide the basic services on which people depend. The state’s school districts suffer the largest loss of money, up to 45% of the funding comes from their coffers, and the state has to backfill that loss with the revenue provided by our income taxes. The Oregon legislature has to approve the backfill program annually. Then cities and counties use Urban Renewal funding to leverage grant money from state and federal government agencies. Those grants also come from other sources of tax revenue paid for by us, the taxpayer. It becomes apparent that the entire process is a pyramid scheme developed as a mechanism to provide sustainability to the corporate welfare system, with only a minimal input from citizens.
Eventually this process will start to consume too much of our taxes and will leave many municipalities financially ravaged. Cities and counties cannot go into bankruptcy according to OR law, so they use the debt from Urban Renewal to subsidize their budgets through varying infrastructure projects. A city or county does not suffer damage to their credit rating if their Urban Renewal Agency goes belly-up, because under current law it is an independent entity legally separate from the city or county of origin.
In February, Senator Jeff Kruse introduced Senate Bill 478, a measure that would take Urban Renewal out of the hands of greedy, misguided politicians and put those agencies under the control of the voter. Senate Bill 478 will allow the voters of Oregon to decide the fate of these over-bloated, bungled bureaucracies. The bill would allow the voter to decide on the creation of an URA plan, or an increase in the URA debt or any expansion of any existing URA areas.
The people of Oregon have to support this bill by calling or emailing their Senator and demand that they vote in favor of the people by voting for SB 478. Right now, the bill is in the Committee on Business and Transportation of the state senate. The following Senators are on that committee and people can contact them via email.
Sen. Beyer Sen.LeeBeyer@state.or.us
Sen. Starr Sean@BruceStarr.org
Sen. Edwards Sen.ChrisEdwards@state.or.us
Sen. Girod Sen.FredGirod@state.or.us
Sen. Monroe MonroeR@leg.state.or.us
Sen. Thomsen Sen.ChuckThomsen@state.or.us
Please, send a message telling the Senators to support SB478 by sending this bill to the floor of the Senate for a full vote and passing it onto the House of Representatives. Urban renewal matters should be under direct control of the voting public, as it is the public, and the public’s children, burdened with this very heavy public debt.
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