By editorial board • 

City budget pressure eases, but by no means disappears

The city budget process was raucous, heated and disjointed last year.

Facing a $2 million general fund shortfall, a badly divided council ended up: 1) rejecting two of four staff revenue proposals; 2) approving one roundly disliked by the residential community; 3) calling for continued negotiation on one roundly disliked by the business community; and 4) borrowing federal ARPA funds to close the remaining gap.

About 75 citizens turned out at one session, largely to oppose various tax and fee hikes the city had under consideration. Many of their remarks turned testy, as did councilors’ remarks to each other during six hours of debate during the climatic showdown.

What a difference a year and the prospect of several million more dollars makes. That and comfortable approval of a package of measures creating a new fire district with $2 per thousand in independent property tax funding.

The city is by no means as flush as it would like to be. It still views itself as falling well short of being able to fully serve its citizens when it comes to streets, parks, libraries, police protection, planning services and such. And that view is shared even by the most conservative of its elected leaders.

In a recent story, city hall reporter Scott Unger noted, “Several department heads mentioned a feeling of stability returning in crafting this year’s budget following several hectic years of addressing budget shortfalls and dealing with the COVID pandemic.” As a result, the city seems poised to approve a $140 million budget with relatively little fanfare come Aug. 16.

The local property tax would account for $14.6 million or 19%. Other sources, mainly state and federal in nature, would account for the other $125.8 million, or 81%.

Truth be told, that makes it an amazingly good deal for taxpayers, even with the new $13 a month utility fee and $2 a thousand fire levy factored in.

We would all love to pay less and get more, but that’s just not how it works in the real world. Providing all the services of modern urban life in America doesn’t come cheap.

Here’s the rub in a nutshell:

The city hasn’t had an increase in its basic, general fund taxing authority for almost half a century. Statewide property tax relief measures have been holding annual assessed valuation increases to 3%, but historically, the cost to the city of providing services has been increasing at something more like a 6% clip.

The inevitable result is a growing gap between cost and revenue. And it would be vastly larger if it weren’t for the relatively limited role the local property tax take actually has in funding city services.

In addition, public agencies at all levels have been saddled for almost 80 years now with an unsustainably overgenerous pension system in Oregon. It’s come to the point where payments into the state’s Public Employee Retirement System account for very nearly one-third of total payroll for the city and county.

Finally, the pandemic both added costs on the expense side and reduced funds on the revenue side. Like households and businesses, units of government are just now beginning to fully dig their way out.

Instituting the new utility fee Jan. 1 promises to add about $2.3 million a year to city coffers. Retaining and repurposing the $1.50 of taxing authority formerly devoted to funding the fire department would add about $4.6 million.

The city has promised not to levy any of the freed-up fire money next year, and is leaning toward phasing it back in over a three-year period on down the line. That figures to ease the impact and better match it to growing city needs.

Even so, the city remains under concerted citizen pressure to better meet some of its service obligations. The two that perhaps come first to mind are streets and police protection.

At present, 57% of city streets carry a “very good” rating, leaving 43% needing attention or moving that direction. Fully keeping up would require an annual outlay of $1.75 million, but the budget now nearing approval would allocate only a bit over $500,000.

The problem? The pandemic depressed auto travel, thus cutting into state and federal gas tax revenue. Meanwhile, our nation embarked on a crash course toward powering cars with electricity rather than gas, and making remaining gas-powered cars ever more efficient.

The result? Roughly the same wear and tear on roads, but diminishing revenue to cover upkeep.

Police manpower in McMinnville has historically run well below state and national standards for cities its size, and has never caught up. What’s more, recruiting and training qualified officers poses an increasing challenge, currently leaving us six short of our full budgeted complement.

The best we can hope for on those fronts is beginning to plug in freed-up fire funds as they gradually begin to become available.

That assumes, of course, that the city ends up opting to retain most if not all of its historic $5.02 per thousand taxing authority going forward. And that will require fortitude, as it will no doubt come until strong pressure against.



If the taxing authority is insufficient, then isn’t presenting that issue to the voters the right thing to do?
I understand it’s a tall order, but adding “service charges” & reallocations of tax levy’s seems like an end run around the voters.

Bill B

So, why are city services increasing at a 6% clip? News Register seems to be fine with that.

Don Dix

A perpetual 3% raise, annually, and it isn't sufficient -- appears to be a spending issue, or ignorance of the guaranteed funds available.

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