Tigard mayor says city is on a budget precipice
TIGARD - It wasn't all good news during Mayor Craig Dirksen's annual State of the City address Tuesday night.
In his annual address to residents, Dirksen outlined some of the city's recent accomplishments including the completion of major construction on Pacific Highway, but said that he had to address what he called 'the other side of the coin.'
Dirksen said that the city was at the edge of a 'budget precipice' that all of Oregon's cities and counties would fall into unless fundamental changes happen in Salem soon.
Many cities and counties across the state are in financial trouble, Dirksen said, and the problem isn't because of the still struggling economy.
'The problem is caused by a fundamental problem with the way tax revenue is collected in Oregon,' Dirksen said. 'Not the overall tax rate, but the process.'
Part of the problem, Dirksen said, is Measure 50, the Oregon law passed in 1997 that limits the rise of a property's maximum assessed value to no more than 3 percent per year.
But while the state is taxing homes at the same rate each year, the cost of doing business continues to rise.
'Though the assessed value only rises by 3 percent, the municipal costs increase in Tigard by about 4 to 5 percent in order to provide the same level of service as we did the year before,' Dirksen said.
Tigard isn't in financial trouble yet, but Dirksen said that the 'cliff is still there in front of us' and said that the city could face some tough decisions if a solution isn't found in the next three years.
If the Oregon Legislature doesn't address the issue, Dirksen said that the city would have two options.
The first option would be to pass a local option levy to ease the gap, in the same way that Hillsboro and Gresham have.
A local option levy would have to be approved by voters, Dirksen said.
The second option would be to make significant cuts in city government, Dirksen said.
The layoffs would likely include police officers, library staff and city planners and engineers, Dirksen said.
In 2010 the city laid off 11 people to weather the economic recession.
The layoffs included library staff and public works employees. The library also had to reduce its hours.
Dirksen asked the City Council to put together a special task force to look at the problem and recommend the best course of action.
'This way the city can address the problem proactively before we reach a crisis, something some other jurisdictions have not done,' Dirksen said.
Dirksen said that the city's financial stability would require 'considerable Council attention for the next few years.'
In the meantime, Dirksen said, the city would continue to move forward with its current projects, including revitalizing downtown, working with Lake Oswego on a new water system by 2016 and purchasing park land.
Dirksen also said that the city would explore creating a recreation program. Dirksen said such a program could be a partnership with the Tigard-Tualatin School District.