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Library may try for stable funding

County considers asking voters to create a district
by: L.E. BASKOW Multnomah County voters could be asked to approve a tax base for the popular library system in November.

Multnomah County commissioners are considering asking voters in November to approve a property tax base for the library system - a move that would stabilize funding for libraries but cause some angst for other jurisdictions that would have to give up a portion of their revenues.

Roughly two-thirds of the county library system's $61.9 million annual budget comes from a five-year serial levy that expires next July. The balance of the budget includes $15.1 million in county general fund dollars and revenue from fines, interest earnings, grants and beginning working capital.

Replacing all of the county's funding with a tax base would provide financial stability for the system and free up millions of dollars for the county to spend on other programs. And because of a quirk in Oregon's property tax relief system, the new tax base would not cost property owners any more than would renewal of the serial levy at a higher rate - approximately $1.18 per $1,000 of assessed value.

County spokesman David Austin says no decision has yet been made on whether to place such a measure on the ballot. But Mayor Sam Adams is already criticizing the idea because it would cost the city more that $6 million a year in property taxes - also because of the quirk in the property tax relief system.

'That's money that would not be available for city services,' Adams says of potential $6 million loss.

A library district would cost the city money because not all tax rates are treated the same under Oregon's $10-per-$1,000 property tax limitation for general government. Permanent tax bases have priority over serial levies - which means a permanent tax rate for the county would compress the rates for all other jurisdictions and levies that must live under the $10 cap.

As a result, a new library tax base would reduce the amount of money Portland could collect for its general fund as well as for the Portland Children's Levy that helps fund services for low-income children. A permanent library district also could influence tax collections, to a lesser degree, for other entities such as Metro.

County commissioners are not yet ready to discuss the potential library tax base in public. But they have long complained that Portland's multiple urban renewal areas are costing the county more than $20 million a year - again because of particular provisions in Oregon's property tax system that prioritize urban renewal areas over both tax bases and serial levies. Adams is working to create a new URA around Portland State University, perhaps by the end of the year.

Regardless of the potential controversy, county commissioners must place a library-funding measure - either a serial levy or a permanent district - on the ballot on Nov. 8 or May 15, 2012. Those are the last two elections before the system's current $40.4-million-a-year serial levy expires.

Will voters be willing?

The library-funding question arises at a time when local voters are sending mixed signals about government spending. Despite the recession, Multnomah County voters approved a five-year serial levy for the Oregon Historical Society last November. They also favored TriMet's bonds to buy new buses, even though the measure was defeated by voters in Clackamas and Washington counties. In the same election, Portlanders approved money for new police and fire equipment. Then in the May election, they defeated a $548 million bond measure for Portland Public Schools, while approving a five-year school operating levy.

Political observers have sifted through the elections looking for a pattern. Portland Commissioner Dan Saltzman, the architect of the children's levy, believes voters are willing to increase their taxes to pay for vital services if the requests seem reasonable.

'The school district asked for over half-a-billion dollars, which is just a lot of money, any way you look at it,' Saltzman says of the losing bond measure.

Multnomah County's library system has always been one of its most popular services. It consistently has among the highest circulations of any system serving less than 1 million people in the nation, according to the annual Public Library Data Services Statistical Report. The 2010 report said 22.7 million items were circulated in 2009.

Before now, county commissioners did not have the option of asking voters to approve a tax base for the library system. A county charter change, easily approved by voters last November, opened the door to that possibility. Now the commission must decide what measure to submit to voters this November or next May - one to create a district with its own tax base or a proposal for another serial levy.

The county currently spends approximately $55.5 million a year on the library system - $40.4 from the serial levy and $15.1 from general property tax dollars. If voters approve a $55.5 million tax base for the system, the county would have an additional $11.5 million to spend on other programs. The county wouldn't get back the full $15.1 million, because the library district also would compress its overall tax collections.

Although Portland would lose about $6.2 million in property tax collections, Gresham would not be affected because its total tax rate is currently below the $10 per $1,000 cap, which is applied to real market values, not assessed values.

Not the only measure

The library tax base is one of several funding measures already under discussion for coming years. For example, Saltzman says he will ask voters to renew the five-year children's levy at the May 2013 special election. It currently collects and spends around $10 million a year on nonprofit organizations that serve low-income children.

Arts advocates are committed to asking voters in 2012 to approve a measure to support nonprofit arts organizations and arts in the schools.

That idea is being promoted by the Creative Arts Network, a non-profit organization formed in 2008 to increase public support for the arts. Executive Director Jessica Jarrett says the organization has identified a funding source that would generate approximately $10 million a year. According to Jarrett, the organization is not yet ready to discuss the source publicly, except to say it is not property taxes. Negotiations are currently under way over which government will sponsor the measure and when it will be placed on the ballot.

Portland Commissioner Nick Fish is also having discussions with people over two measures related to bureaus under his control - Portland Parks and Recreation and the Portland Housing Bureau. Fish says no decision has yet been made on when or even if to place a parks or housing measure on the ballot.

However, Fish says city parks have more than $100 million in unmet capital needs. He also says that city urban renewal funds, a major source for financing affordable housing projects, are projected to decline significantly in coming years.