Billboard tax draws fierce resistance
City councilors say they are prepared to take on any fight against their proposed ordinance
A billboard ordinance before the Madras City Council has drawn exactly what the city's highest governing body had expected: A promised fight from sign companies if the council doesn't back away from the proposed tax.
At its Nov. 13 meeting, the city council was told by a sign company's lawyer that the billboard tax ordinance was "unconstitutional."
"I know that if a tax is adopted it would be something we would oppose with all we could muster," said attorney Dominic Colletta, representing Meadow Outdoor Advertising, which owns several billboards in Madras. Colletta said it would limit free expression, equate to a confiscation of property because of its high fee and stir a legal battle that could reach the highest level.
But Mayor Rick Allen told Meadow and other sign company representatives attending last Tuesday's meeting that his stance wouldn't waiver.
"We hope this doesn't have to go to the Supreme Court," he said, "But I can tell you we're more than willing to go there."
The proposed ordinance would tax billboard companies $4 for every square foot of their sign's surface area. There are 17 billboards within Madras' urban growth boundary; most are about 300 square feet in size. That would equate to a tax roughly $100 per month, or $1,200 a year, per sign.
Only billboards defined as "Off-Premises Signs," or billboards advertising products or services "existing elsewhere than upon the same lot where such sign is displayed" are eligible to be taxed. Businesses with billboard-style signs on their own premises would not be taxed.
Critics of billboards detest them for many reasons, from being eyesores on the urban landscape to drawing business away from the local community.
Colletta, who had met with some city officials earlier, reiterated his client's desire to work on an alternative solution to the issue some have deemed a "problem."
"There are other ordinances we feel could address this issue," Colletta said.
While Allen and others council members indicated they were leaning toward approving the ordinance despite legal obstacles, at least one councilor indicated he was in favor of a more middle-of-the-road approach.
"I'm not in favor of going to the well with this in litigation," councilor Bob Sjolund said.
Sjolund, council members and the billboard companies will have plenty of time to work out an agreement if they choose to do so. Discussion was ultimately tabled for a future meeting, but not before two other sign company reps and a few local business owners voiced their opposition to the ordinance.
"You're going to tax me right out of the park," said Troy Boyd, owner of Great Earth Natural Foods. She told councilors the billboard space she rents draws commuters who wouldn't know of her business, which is two blocks east of the highway traffic.
Joe Davis, owner of Black Bear Restaurant, told the council he was in favor of limiting billboards but not in the manner proposed.
"To reach travelers I need those billboards," said Davis, who rents space on two in Madras and another in Redmond. "There comes a point where you'll put the price out of my reach."
The ordinance does not specify whether the tax should be absorbed by the sign company or passed on to the renter.
Chris Zukin, owner and general manager of The Dalles-based Meadow Outdoor Advertising, said the tax could put him out of business in Madras. He said if the City Council passed the ordinance without considering other alternatives, their legal challenge would be backed by the Oregon Outdoor Advertising Association. "All the big boys in the Willamette Valley would get involved," he noted.
The city's sign ordinance is also currently being updated as part of a "two-pronged approach" to managing billboards, city officials have said.
In April, Meadow applied to build five more billboards, officials said, when it caught wind of proposed changes to the sign ordinance that would outlaw the construction new billboards.
In response, the city passed an emergency ordinance that put a moratorium on new billboards for six months, rejecting the five applications and buying the city time to finalize its sign ordinance review.
However, Meadow appealed its five rejected applications to the Land Use Board of Appeals and the emergency ordinance has since expired.
LUBA has not ruled on the appeal. A draft of the sign ordinance changes has yet to be looked at by the Madras Planning Commission.
Billboard companies do not usually own the property they are constructed upon. More often, they lease a small patch of property, pay the owner rent and also pay some property taxes. But they do not have to pay for a business license.
Allen told citizens at the Nov. 13 city council meeting that Meadow's behavior was "gross and negligent" when it applied for five billboards.
"I think they're good people but they're trying to profiteer off our town," he said.
Allen added: "We're going to win this battle and we're not going to be a dumping ground for anybody."
Colletta told the meeting attendees that Meadow would work in good faith with the city to reach an alternative to the billboard tax if the council would go that route. That could even lead to a withdrawal of its five pending applications.
In Redmond, Bend and Prineville -- cities that have long ago implemented billboard limits -- the values of the existing signs have increased.