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Mac taking right tack to finance street needs

Jun 20, 2014 | 19 Comments


By The News-Register Editorial Board

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Comments

05:55 pm - Fri, June 20 2014
kona said:
This tactic is so predictable that it is disgusting. The McMinnville City Council discussed and diverted five years of street maintenance revenue to pay the down payment for the Newberg-Dundee Bypass. This "down payment" was highly controversial and slipped in by our former Commissioner Lewis with very little resistance from the McMinnville City Council. McMinnville ended up paying a larger proportion of this "down payment" than Newberg and Dundee combined under the guise of "being good neighbors". Now the city council would like everyone to believe that this shortfall in revenue for maintenance is because "keeping abreast of needs has become more costly". That is dishonest. The reason is that same well-worn government tactic of robbing Peter to pay Paul and then asking to have Peter reimbursed. Obviously the News Register editorial group fell for it and most likely the lethargic public will fall for it also.
10:05 am - Sat, June 21 2014
Lulu said:
This voter is unwilling to finance any more projects. Property taxes here are outrageous. All you're proposing is another form of highway robbery.
08:12 pm - Sun, June 22 2014
Don Dix said:
So the city wants to fix the streets, but doesn't have the funds. And the reason given is the gas tax increase didn't produce enough because gas sales were down. To my recollection, the reduced revenue was predicted before Kitz and the gang passed the measure, but you will never hear that explained.

But back up there! Haven't the citizens been encouraged to drive less? And the auto makers mandated to increase mileage? And every where it's available, use mass transit? It appears big brother has been enabling all the little brothers ability to levy new taxes all along!

And just recently, Mac used its portion of the stimulus money to pave several streets -- that didn't need paving. The story was 'others were not shovel ready'. So basically, waste the money instead of getting needy streets 'shovel ready'. Just another foolish catch-phrase designed to make the speaker appear to be informed and in control ( that didn't work).

If the city had shown some sort of fiscal intelligence ( in several money-spending decisions), maybe there would be some support. As it is now, many people dislike how a bad decision seems to be shined on and pretend it never happened, yet it's imperative the wasted money be replaced by someone else ( in government's eye ).

At some point, other people's money will not be enough to fill the government trough! Then what? Oh yeah! Print some more!
11:03 pm - Sun, June 22 2014
Jeb Bladine said:
A bit of additional perspective:
The federal stimulus money had “use-if-or-lose-it” timelines. Federal rules caused the city to spend money paving streets that were not at the top of its priority list, but long term, the projects opened up funds for other city needs. McMinnville received about $700,000 for the street overlay projects, and about $400,000 for installation of 150 handicapped-accessible curb ramps on local streets.
The News-Register was not tricked, nor did it forget about the city’s bypass funding. We have supported the bypass. We didn’t like the surprise commitment of city funding, but with all that federal and state money coming in for the project, but we don’t have a problem with McMinnville sharing a small part of the cost. The city agreed to pay $3.2 million over 15 years – not a lump sum that otherwise could have gone to other major road projects today.
Over 6 years, city transportation system needs costing more than $65 million were identified, prioritized and discussed in great detail by a top consultant, competent city staff and an engaged citizen advisory committee. In the interest of full disclosure, I was a member of that committee, which appears ready to recommend a funding request to cover about one-third of those needs.
The bypass money would not have made an immediate serious dent in those needs. And every year, new basic street maintenance needs exceed available funding. The transportation bond proposal includes major improvements in traffic flow and public safety, including the highest priority street pavement and sidewalk projects, and it certainly isn’t the product of dishonesty in local government.
07:39 am - Mon, June 23 2014
kona said:
The "bypass money/downpayment" was directly borrowed from future street maintenance revenue from the state. It was very significant for future maintenance projects for McMinnville. That was the testimony from Mike Bisset at the city council meeting the night of the shift of funds. I thought it was an interesting testimony. There was considerable concern in that testimony. He suggested the projects which would not be completed because of the shift of funds.

There is no doubt that McMinnville could use more revenue for street maintenance. Every city could use more. I agree that the amount involved was considerably less than the total needs of McMinnville streets, but very significant for the maintenance of city streets. The (and we will disagreee) shift of using McMinnville street maintenance money, which was earmarked for five years into the future for McMinnville street maintenance projects, to fund the down payment for The Newberg-Dundee Bypass was dishonest. Then compounding the devious action by asking the citizens to reimburse for that decision is equally dishonest.
07:48 am - Mon, June 23 2014
kona said:
The primary point of dishonesty is that regardless of a person's support or non-support of the Bypass, the two projects are entirely different situations which shouldn't have been co-mingled. It started to get "shifty" as soon as Commissioner Lewis got "shifty". Then the City Council just went with the flow and continued the "shifty" behavior. Now there is the request for new tax dollars to cover up the "shifty" behavior. It smells of Portland, that "weird" city to the North.
08:18 am - Mon, June 23 2014
Don Dix said:
Jeb,

It was no secret that the federal stimulus was use it or lose it. But where in that mandate is the option to simply waste it on unnecessary paving? And the replacement of some handicap ramps would not have been necessary if someone had bothered to do them correctly in the first place.

The citizenry gets advice from the government on a daily basis. The passage of a new addition to the gas tax was said to be the cure to road repair needs. It was an easy sell to the to those who vote without suspicion whichever way our state leaders advise (again).

Was that hope, or just another angle for the state to increase revenue? Based on a variety of predictions, it appears the sellers (state) were ignoring the prospect of being wrong -- but they were (again).

How many pleas for extra money do we need to hear before someone asks 'what happened to the last pile' -- and get an up front answer? Enter the crickets!
09:26 am - Mon, June 23 2014
Lulu said:
I don't consider it an "affordable financial package." They'll have to chisel it out of my bones.
Enough.
No more.
The well has dried up.
09:45 am - Mon, June 23 2014
kona said:
Don,

I think there are so many ways to look at the way the stimulus plan was executed. I understand the problems with the political/government method of spending money "because it is there to spend". There was money thrown at projects which might not been at the top of the priority list. However, I don't have a problem of the City of McMinnville taking advantage of available revenue even though the projects were not on the top of the list. Fighting the bigger battle of whether the stimulus package was right or wrong would not have been a productive stand for our city. My biggest concern was that much of the work was done by out of the area contractors and much of the work was below acceptable standards. To correct that work will come out of the city maintenance budget.
07:42 am - Tue, June 24 2014
Don Dix said:
kona,

We seem to differ on accountability. I have a big beef when government chooses to 'take advantage' of any extra cash. They throw dollars away like a child in a video store! If the true total numbers of wasted spending were available for public inspection, the entire crew in D.C. would be standing in line at the employment office immediately. That 'spend it while it's available attitude' is about the only hint of the so-called 'trickle down theory' and it's effect at the lower levels of government.

My street was recently torn up and paved along with others in the area. There were no ruts, potholes, or any 'sinking cuts' across any section. As the work began, every neighbor encountered wondered why this street was being redone. One neighbor had called the city to find out why -- the answer --'It was time'. What!

To put this in context of this discussion, the complete redo of my street had nothing to do with the stimulus. It was just time! If that is all the criteria needed to spend several hundred thousand $, it doesn't take a genius to deduce why there is no money for 'needed' street repairs.

In the case of Portland, not only are they proud of being weird, they have a much smaller tax contribution than the population should produce. Why? It is no secret Portland has long been a destination where young people go to retire!

02:35 pm - Tue, June 24 2014
kona said:
You said, "I have a big beef when government chooses to 'take advantage' of any extra cash."

I am in complete agreement with you. I do think that the 2008-2010 period was special and was handled very well. They were throwing money at the situation and that was necessary at the time, but not a typical time period. The purpose was to get liquidity into the economy by any available method. One of the methods just happened to be your street. As a general practice I agree that government spending is very inefficient.
09:21 pm - Tue, June 24 2014
Jeb Bladine said:
Lots of intermingled issues, here – anti-tax, anti-bypass and anti-government. Leslie Lewis and others did pull a bit of a fast one by secretly committing local governments to $20 million in matching funds to the state’s $192 million bypass commitment. In a highly publicized process, McMinnville City Council reluctantly contributed what it considered its fair share to that fund. Yes, it was a transfer of money from the increased gas tax that could have been used for road maintenance, but our region also got a huge share of that tax hike for the bypass. The city's maintenance fund “transfer” was approved because it was the only available funding mechanism for local governments to borrow that money from the state. It had to come from somewhere in the city budget. Transportation bond talk started years before the bypass-funding issue, and was delayed because there were no prospects for funding at the level needed to make identified improvements. That would be true, even without those bypass costs. This proposal simply asks if the array of significant roadway projects is worth the estimated cost of 80-90 cents per $1,000 valuation for 15 years. If not, campaign and/or vote against it on the merits.
01:56 pm - Wed, June 25 2014
Don Dix said:
Jeb,

The estimated cost of a project in the private sector is usually a fair and accurate assessment of what to expect. But government estimates have been anything but accurate, almost exclusively and shockingly low (when the considerable dust settles). From that, one might fairly surmise this one follows the same pattern

If this transportation bond is estimated @ $.80 - .90 per $1000 valuation ( for 15 years ) today, there's a very solid chance the total take won't be adequate. And back to the taxpayers they will go. ( M66, M67, gas tax increase, raising every fine and fee in sight, etc.)

Another point of interest from the small print -- if today the bond taxes property @ $.80 / $1000, in 15 years, 80 cents will effectively be $1.24+ / $1000 using today's valuation. The county is allowed to raise valuation 3% yearly, which raises total taxes assessed. To my recollection, the county has never passed on the raise. It's safe to say they won't, and in my opinion, never will.
03:40 pm - Wed, June 25 2014
kona said:

How many times (over and over) have government bodies told us that they cannot use operating revenue of the budget for capital assets or capital asset revenue for operating expenditures. Yet, that is exactly what they did by transferring operating revenue (street maintenance revenue from the state) for a capital expense of the Newberg Dundee Bypass.

Is this newly proposed bonding for maintenance or newly constructed roadway systems/additions?
04:14 am - Thu, June 26 2014
Jeb Bladine said:
It's a combination of capital projects, safety projects and preservation projects (overlays). Here's a link to summary of all projects discussed in the multi-year transportation planning process -- far more than what has been selected by the citizen committee for the bond proposal, which then goes to the city council for discussion and final action.
http://www.ci.mcminnville.or.us/images/stories/departments/Planning/documents/TSP/Appendix_D_TSP_Project_Summary.pdf
08:15 am - Thu, June 26 2014
Spongebob said:
Don,

I'm not really clear on your point, here: "The county is allowed to raise valuation 3% yearly, which raises total taxes assessed. To my recollection, the county has never passed on the raise. It's safe to say they won't, and in my opinion, never will."

With the passage of M47/50, back in 1996 and '97, property tax assessment changed in Oregon. Assessed values were cut 10%, and capped at 3% annual growth - regardless of what kind of growth occurred to the real market value of the property. This has saved taxpayers (collectively) hundreds of millions, if not billions, of dollars over the past 18 years. I don't even know if the assessor has the authority to forego the annual 3% increase in assessed value.

The county's property tax rate has not changed since 1996. Under the old system, new development, and increased market values, did not necessarily increase revenue for local taxing districts, such as the county, cities, schools, special districts, etc; the effect of increasing values was to drive the tax rate down. That is why local districts were periodically going to the voters to increase their tax bases, allowing them to effectively increase the tax rate.

Under the new system (M47/50), new development actually adds money to the public coffers, without changing the rate all of us pay. For the first ten years after M47/50, real market values increased much faster than 3% annually, so there was a significant gap between assessed value and market value. When the housing market crashed, real market value fell dramatically, without affecting the assessed value, in many areas. Once market value falls below assessed value, we get compression, and the 3% annual rise in assessed value is affected.

Since 1996, this has been a pretty good value to property tax payers, overall.

08:42 am - Fri, June 27 2014
Don Dix said:
Spongebob,

The 'cap' (raises to property valuation) is 3%. If your home was valued @ $200K in 2013, the cap raise would increase the value to $206K in 2014. If the millage rate (dollars per thousand in tax assessment) remains the same, your tax bill would increase 3%.

The cap was a limit on raising valuation of property. Before 47/50, valuations were at the mercy of the assessor in each county. My personal experience was several 'auditions' before the board of equalization. One year my property valuation was raised 93% ( which also raised my tax liability by the same %). That's why M47 passed easily, in my opinion.

Since the 47/50 took effect, counties can only raise valuation 3% yearly. If Yamhill County has passed on this yearly raise, please advise otherwise. There is no requirement that taxes or valuation be raised yearly, but placing a limit on at the top end keeps government somewhat within their means in terms of spending. (That last sentence is more hopeful than true).

The gap between market value and assessed value was never an issue. The gap was usually 10 - 20% below market value. Property sold was reassessed to reflect the sale price, and the sale price became the new valuation. Improvements to property we're assessed to building permit values, so anything additional would also be included in the next year's tax liability.


08:49 am - Fri, June 27 2014
Nana50 said:
I think it would make more sense for individuals who own vehicles to pay personal property taxes on their vehicles every year. Not every home owner drives a car and uses the roads, but if you own a vehicle you're using the roads. Tax the bicyclists as well it takes money to build in bicycle lanes for them to commute on as well. It's unfair to continue to tax homeowners for everything while renters live in the community and assume no responsibility for the community.
11:12 am - Fri, June 27 2014
Don Dix said:
Renters do pay property taxes. It is reflected in the rent/lease agreements and subsequent payments. It would be financially unsound not to include taxes when determining the amount to charge renters.

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