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County library district could shuffle funds

Commissioners poised to OK plan to shore up popular service
by: Christopher Onstott Multnomah County libraries would get dedicated property tax funding if voters pass a proposed library district.

Multnomah County libraries - among the most heavily used and beloved libraries in the nation - have relied on 'temporary' tax levies to keep the doors open for 35 years.

That could be about to change.

Multnomah County commissioners are poised to put a county library district measure on the November ballot. The measure, which proved popular with voters in a March poll, would provide permanent property tax funding for the library system, starting at about $63 million a year, freeing $10 million a year in the oft-pinched county budget.

The catch? The city of Portland would lose an estimated $5 million a year, because of voter-approved property tax limitations.

But after complaining for years that the city keeps too much property off the county tax rolls via longrunning urban renewal districts, county commissioners expect to vote this month or next to put the library district on the ballot.

'I don't think there's going to be a lot of suspense about the vote,' says County Commissioner Judy Shiprack.

Shiprack and fellow Commissioner Diane McKeel both say they'll support the library district idea. Commissioner Loretta Smith would provide the third and deciding vote. 'I think she's inclined to support it,' says Smith chief of staff Chris Warner.

County Chair Jeff Cogen is 'leaning' toward supporting the district, says county spokesman David Austin. Commissioner Deborah Kafoury says she's still undecided, 'not that it matters.'

Cogen has already assured Local 88 of the American Federation of State, County and Municipal Employees, which represents some 500 library workers, that they'll keep the status quo on wages and benefits once the library district is formed. Library workers must form a new collective-bargaining unit and negotiate a new contract if voters OK the library district.

Library backers enthused

'I haven't heard anybody who says this is not a good idea for the library,' says Jerry Hudson, vice chairman of The Library Foundation, which raises private donations for the county libraries.

Multnomah County library circulation has grown 182 percent in 15 years, despite the advent of Facebook, smart phones and other demands on peoples' time. In one sign of the library system's popularity, the library foundation has raised $38 million in the past 16 years. The volunteer group Friends of the Library includes 1,100 members.

The two support groups plunked down a combined $221,000 on June 28 into the Libraries Yes! Committee, a political action committee expected to run the library district ballot measure campaign.

The only suspense has been whether the commissioners would vote to put a library district on the November ballot or choose another five-year library levy, to replace the one expiring next July.

The owner of a typical house with a tax-assessed value of $174,000 pays 89 cents per $1,000 in property taxes, or $155 a year, for the library levy. That's expected to rise to $1.18 per $1,000, or $205, with a new library district.

Total property taxes collected in Multnomah County could rise an estimated $12.9 million, or 1.7 percent, if the library district is passed. However, taxes could rise a comparable amount if the county opted instead for another levy.

Multnomah County voters approved the first library levy in 1976, and have since approved nine more temporary levies.

It's hard to argue the libraries aren't permanent, says Tom Linhares, director of the Tax Supervising and Conservation Commission, a watchdog for local government budgeting. 'My personal opinion is it's probably time to give the library a district and give them some permanent funding,' Linhares says.

City impact at issue

Portland City Council voted to oppose a library district the only other time it was proposed, back in 1987. That meant the district couldn't raise property taxes inside the city of Portland, negating the benefits of a permanent taxing district.

Now, different rules are in place. Multnomah County voters approved a county charter amendment last November that lets the county start a library district without the approval of area cities.

Property tax limitations approved by voters in 1990, 1996 and 1997, plus other local-government actions, mean local governments in Portland have the authority to raise more taxes than allowed by the tax limitations. That forces approved levies to shrink, disproportionally, via a process called 'compression.' Temporary property tax levies, such as the city's Children's Levy or the county library levy, are a low priority, and compressed more, than taxes for permanent government units. So switching from a temporary library levy to a library district crimps funds to other layers of government.

One of Cogen's early concerns was the impact of the library district on the city, particularly the city's Children's Levy. Cogen helped create the levy while serving as an aide to City Commissioner Dan Saltzman, and Cogen's wife manages the program, which raises property taxes beyond the regular city budget to pay for children's programs.

But new calculations by county economist Mike Jaspin show the impact on the Children's Levy is relatively minor. A new library levy, with the amount raised to adjust for inflation, would cut the $12.4 million collected for the Children's Levy by $725,000, versus $938,000 if voters OK a library district, Jaspin says.

A library district would reduce the city of Portland's property taxes by $6.3 million, Jaspin says, but $2.3 million of that could be recouped by the Fire and Police Disability and Retirement Fund. In addition, the city would wind up raising an extra $400,000 for urban renewal, so its losses would be less than $4 million, Jaspin calculates.

City economist Josh Harwood says the city would lose at least $4.8 million, and likely more, because compression increases as property values decline, as has occurred so far this year.

Compression isn't a factor in Gresham, Troutdale and Fairview, because their tax rates are lower than Portland's, so the library district won't affect those cities' finances.

Portland Mayor Sam Adams has raised concerns in the past about the loss of city money. But so far, 'the opposition just hasn't shown up,' Shiprack says. 'I have not heard from the city of Portland, and I would expect if this were a big deal to them, they would be weighing in on it, and they haven't.'

Adams now says he leans in favor of the library district, and is encouraged by Cogen's assurances that the $10 million freed up in the county general fund could pay for services the city supports, such as health care and district attorney prosecution.

'I'm a big fan of the libraries and would love to see them funded from the creation of a district,' Adams says.

Adams adds that he'd like the library district to provide some support to public school libraries as well.

If voters approve a library district, that would free up the equivalent of 2.4 percent of the county's general fund that now goes to supplement the library levy, while cutting about 1 percent of the city's general fund.

That would reverse a recent trend that has seen more local property taxes go to the city and less to the county, Linhares says.

Downtown Portland property owners paid 62.3 percent of their property taxes to the city in 2002-03 and 65.3 percent in 2009-10, Linhares says. Those same property owners paid 36.4 percent of their property taxes to Multnomah County in 2002-03 and 33.4 percent by 2009-10. The increasing share of property taxes going to the city are primarily due to the Children's Levy, police and fire retirement, and urban renewal, Linhares says.