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Shifting the Costs

City uses popular public services for leverage

What might Bernie Sanders have to say about Eugene’s $2.7 million a year property tax increase for the public library? Well, it’s definitely “socialism,” which is defined as a redistribution of wealth. But, it’s the opposite of Bernie’s brand of socialism because it enables the redistribution of wealth up to the top of the economic ladder, instead of in the direction of average working people.

Eugene’s city leaders are continuously shifting the costs (library levy included) of providing government services onto average working taxpayers while enriching the elite few by giving them special tax exemptions and subsidies. Freebies given to private interests cause deficits for funding public services — as a result, the city shifts the cost of the shortfall on to the average taxpayer. 

You don’t have to take my word for it. The state publishes a biennial report detailing all the income and property tax breaks, waivers and credits that are given away. 

The “Oregon Tax Expenditure Report” says, “The property tax is unique in that exempting property from property taxation may result in both a revenue loss to local governments and a shift of taxes to other taxpayers.” Therein lies economic inequity.

Locally these losses are significant. Multiple Unit Property Tax Exemptions (MUPTE) are currently removing $2 million every year from the General Fund (GF). The city plans to expand these giveaways in the very near future to developments like Brian Obie’s 5th Street Market area project and the South Willamette rezone. The cumulative impact of tax exemption losses to the GF is staggering and can never be recovered even when the (depreciated) properties eventually go on the tax rolls after 10 years.

Eugene’s two Urban Renewal Districts (URDs), Downtown and Riverfront, are draining $3.3 million every year. Again, city leaders are already positioning for their next URD spending cap increases. These tax-skimming schemes have been draining the General Fund continuously since the ’60s and ’80s. 

Adding insult to injury, a portion of the revenue from the levy, if it passes, will be diverted to both URDs, reducing the amount of money going to the library, but again enriching private interests. 

Just to make things worse: MUPTE projects, like Capstone and The Hub, will not pay their share of this levy. Not only do these rental properties get a free pass on taxes, but the people who live there utilize city services, which increases the demand for the very services they are not paying for. Even without this levy, your property taxes are going up in 2016. 

New taxes, like this levy, enable city leaders to continue giving away public money to bolster private profits while forcing average working taxpayers to pick up the tab. 

This tax increase is framed like a popularity contest. The city is literally banking on the likelihood that if you love the library you will reflexively vote “yes” — unaware of their cynical manipulation.

In reality this levy is the “city service fee redux.” City leaders have just broken the service fee down into smaller bites to make it easier to swallow. First they float the levy; next they institute a new stormwater fee for parks maintenance; and if they succeed, the sky’s the limit. 

Like the ill-fated city service fee, which voters trounced in 2013, this levy removes an essential service from the GF and seeks to establish a separate and additional funding mechanism for it outside the GF. Essential services such as the library should be funded by the GF using existing taxes, not additional fees and taxes. 

Removing services from the GF and tying them to new funding mechanisms leaves more money in the GF that city leaders can spend on activities that lack voter approval or community support such as tax breaks, pet projects or fiscal excesses. Like: the next phase of City Hall construction for $44 million; 8 percent raises for upper management including the recent $15,000 raise for the city manager, increasing his salary to more than $200,000 per year, almost double what the governor earns; sweetheart deals to private entities; public property giveaways; system development charge waivers; taxpayer subsidies for site improvements, demolition and pollution clean up; guaranteeing profits for downtown property owners with 10-year lease commitments for city offices, costing $1.5 million to $2 million each year.

Independent spending oversight is nonexistent. The mayor and council are not exercising checks and balances on behalf of average residents. Taxpayers have no avenues to demand accountability for the city’s skewed spending priorities except to vote down money measures which only serve to perpetuate economic inequity. I will be voting “no” until the city reforms its taxing policies so that they are fair to hard-working taxpayers who actually pay the bills around here.

Unless voters say “no” to multiple revenue-producing schemes, the city will continue to give away money, and then float levies and impose fees using the most popular community services as leverage. 

What would Bernie do?