Candidates for state House District 17, along with state Sen. Fred Girod, weighed in on issues important to city governments, including property tax limitations, transient lodging taxes, shared state revenue and water rights, in a forum held on Sept. 14, City Hall Day, at the Sweet Home Police Department.
Running for House District 17 are incumbent Republican Sherrie Sprenger of the Scio-Lacomb area and Democrat challenger Richard Harisay of Sublimity. The district covers east Linn and Marion counties.
City of Sweet Home councilors and staff explained the issues, which are priorities for the League of Oregon Cities in the upcoming legislative session.
Property Tax Limitations
Couching the issue in terms of local control, Mayor Craig Fentiman asked the candidates and politicians about making changes to property tax limitations imposed by voters in the 1990s.
Restrictions on voter choice are prohibiting communities from determining appropriate public safety levels and the type and amount of other services to provide, according to the LOC. The current restriction of five years on local option levies, which fund law enforcement and the library in Sweet Home, limits predictability. Compression, the effect of a $10 per $1,000 limitation on property taxes, reduces the resources that local voters need to make decisions appropriate to their community.
The LOC is going to ask legislators for a constitutional referral to allow 10-year local option levies and to allow jurisdictions to ask voters for a levy renewal in the eighth year of a levy. The LOC also will ask the legislator to exempt voter-approved levies from the effects of compression, allowing such levies to bypass the $10 per $1,000 property tax limitation.
“If you ask if I’d have a problem raising that to 10 years, the answer is probably no,” said Girod, a Republican. He also would likely support allowing jurisdictions to seek new levies in the eighth year. He would oppose moving local option levies outside the property tax limitation.
“Compression is such a valuable part of Measure 5,” he said. “No way yours truly will go against Five. The compression part is really gutting Measure 5.”
It’s a restraint on local governments. He pointed to the state and its other tax streams as an example of what happens without restraints.
“Government is still expanding even under Measure 5,” he said. He sympathizes with small jurisdictions that must deal with issues from the state, such as the increasing cost of public employees’ retirement.
Sprenger agreed about allowing longer levies and earlier votes on renewals, she said. “I think we do need the ability to make long-term plans.”
As a police officer, Sprenger said, “I remember being scared to death of Measure 5.”
The local option levies are compressed before permanent rates. The proposed Linn Library League would have compressed local law levies, and the sheriff was sweating bullets. In Sweet Home, the library and Police Department are both affected by compression.
“Now you’ve pitted your cops against your libraries,” Sprenger said. “We now pit two great things against each other.”
Harisay said he wasn’t well-versed in the issue.
“Does any of this involve an increase of funds to the city and how so?” he asked Fentiman, who told him it would only if compression were removed.
“I certainly have no objection to that,” Harisay said in support of local control.
The area is losing the jobs that produce real wealth, the best jobs, he said. That’s what brings wealth to the state, and the state should concentrate on that as much as budgetary accounting practices.
“I can agree you need to be able to plan ahead,” he said. “If there’s a way to get more money to city coffers, I would do that too.”
The people need to feel empowered, that they can do something about the situation, Harisay said.
Transient Lodging Taxes
Councilor Jim Gourley outlined the transient lodging tax issue.
In 2003, the state legislature passed a bill requiring that 70 percent of revenues from any new or increased local transient lodging tax be used exclusively for the promotion of tourism and tourism-related facilities. Tourists benefit communities, but they also increase demands on local infrastructure and services. The preemption has prohibited cities the flexibility to use the revenues to address tourism impacts and generally meet the needs of their communities. Previously, decisions on how to allocate transient lodging taxes were made locally.
The LOC will ask the legislature to repeal the requirement.
“I’ve always objected to hotel taxes,” Harisay said, but said control should be local, especially at a time when the local jurisdictions are having such difficulties.
Jobs are the crux of it all, he said, “but local control, I certainly think more of it should go to the cities.”
“Sweet Home’s nailed tourism,” Sprenger said. “The Jamboree is, I think, the most stellar example.”
She said she remembers when the hard times hit Sweet Home, how it impacted the area and an example of its response in the Cedar Shack and its Owl Burgers.
The Jamboree has helped focus on developing tourism, she said, providing a bigger chunk than 30 percent of the transient lodging rate.
“I think the cities, districts and counties usually do a better job,” she said, and the Jamboree shows why they should control those funds.
This is all about Salem and Portland, which contribute more substantially than the small towns, Girod said. Sublimity has one hotel.
In all honesty, Girod would oppose the elimination of the law, he said. He would need to talk to the hotel-motel industry, but he would be hard-pressed to go against it.
His district has three economies, timber, agriculture and tourism, Girod said. The timber is in shambles, and the agriculture is not doing well.
The remaining economy, tourism, helps the commercial cores, he said.
“This is good for the smaller cities,” Girod said, as they receive the benefit of the taxes paid in the large cities.
State Shared Revenue
Scott McKee Jr. outlined concerns about state-shared revenue.
Cities receive revenue from liquor, beer, wine, cigarettes and 9-1-1 taxes. Those funds are used to fund services, such as public safety, economic development, parks and senior services. When the state imposed the taxes, it preempted the local governments from doing so with the understanding that the local governments would receive a share of the revenue.
The LOC wants to maintain and strengthen the shared revenue formulae, incorporating any new taxes or surcharges the legislature may impose. The LOC specifically opposes attempts to reduce the revenues.
“What would Waterloo do without OLCC money, cigarette money?” Sprenger asked. “That’s a city that it’s fair to say is totally, 95 percent dependent on that money.”
Waterloo has no permanent rate, Sprenger said, so the shared revenue is critical.
And she supports protecting the program.
“I love to tell people what they want to hear,” Girod said. “It doesn’t happen very often.”
He supports cities receiving this revenue, he said. With the last gas tax hike, the first thing the state did was a $50 million renovation of an Oregon Department of Transportation Building.
Harisay agreed he would object to any attempts by the state to jump on this funding.
Municipal Water Rights
Public Works Director Mike Adams described issues with municipal water rights.
Normally, cities grow into water rights over time before the rights are certified. State administrators have recognized the decades-long planning efforts to develop the infrastructure associated with those water rights, but in 2004, an Oregon Court of Appeals decision upended the longstanding state policy, ruling that municipalities must construct the infrastructure within five years.
In 2005, the Legislature passed a bill restoring much of the ability of cities to grow into their water permits over a longer period, but recently other interests have sought legislation to place strict limits on municipal water use, which is less than 10 percent of the water used in Oregon.
Sweet Home has enough rights to serve its citizens for the next 50 to 60 years, Adams said. It has three separate water rights claims. One is certified for 400,000 gallons per day. Usage is close to 1 million gallons per day. The total existing rights are for 8 million gallons per day. At full build-out, Sweet Home could use up to 10 million gallons of water per day.
Other interests are likely to propose limits on municipal water use that will interfere with new and approved water rights in the next session. Some environmental groups have argued that new protections for peak and ecological flows should restrict new and existing water permits and water storage projects.
“I love this question,” Girod said. “It’s the most important question.”
Long-term, the state is facing problems with winter steelhead and summer salmon, which will impact water rights, Girod said. The state must take a look at how to get those numbers up, so there is not the push on water rights that cities are looking at.
“Minimum stream flows will put everybody’s water rights into compression,” Girod said. “It’s going to be a huge issue.”
It will be the biggest issue on any of the Willamette River tributaries in the next 15 to 20 years, he said.
“This is your water guy,” Sprenger said of Girod. When she was first elected, she heard that, in a few years, realize it or not, water would be the big issue in the state, she said.
“I believe it is now,” she said, noting that fish studies and issues are driving the decisions.
It’s more than municipal rights at stake, she said. Municipal water rights are the end game with this issue.
And that is why cities and legislators must mobilize and be vigilant, she said.
Sweet Home and Oregon are not unique, Harisay said. “This is going to be a major issue worldwide. There are going to be forces that are going to try to corral your water rights. I couldn’t agree with Fred more. You would have an ally in me.”
He asked if there were a way for the legislator to force approval of certification.
“Yes,” Girod said, although that can place the right below other rights.