Funding issues may put city's next mayor in a budget bind
by: CHRISTOPHER ONSTOTT A mother and her daughter enjoy a children's picture book at the Troutdale Library. Multnomah County voters may be asked to support a permanent taxing district for libraries in November, if a stopgap library levy passes on the May primary ballot.

Most everybody likes libraries, but do they want to pay for them?

Multnomah County voters may vote twice this year on library property taxes, so when the three contenders for Portland mayor appeared before the Portland Tribune editorial board, they were grilled on how they felt about the library levy and a possible library taxing district.

At first glance it might seem a minor or irrelevant issue, since the mayor has no say on the county-run library system. But answers by Eileen Brady, Charlie Hales and Jefferson Smith provide a textbook case on their approach to City Hall spending, and how they'd address tense relations with Multnomah County leaders.

First, a little background. Short-term property tax levies have kept the popular county library system afloat since 1976, and the latest levy expires June 30 unless voters extend it at the May 15 primary. If that three-year levy renewal passes, Multnomah County commissioners likely will ask voters in November to authorize a library district, which would bring permanent, stable property taxes to the libraries and end decades of shaky temporary funding.

How City Hall views the library district, if it gets on the November ballot, could prove pivotal. That's because, due to Oregon's quirky tax system, a voter-approved library district could slice about $5 million a year from city funding -- while giving the county an extra $10 million or so each year by freeing up money it spends to supplement the library levy.

City-county flashpoint

Opposition from Portland city commissioners killed the last library district proposal back in 1987, and there have been rumblings that city commissioners, and unions representing city employees, might try to kill it this time as well.

That doesn't sit well with county leaders and library supporters, especially since the city's expansive urban renewal program has kept a large chunk of the city in decades-old urban renewal districts, denying the county property tax collections from much of that property, while siphoning much of the taxes to the city's Portland Development Commission.

In the past decade, an increasing share of property taxes collected in downtown Portland has flowed to the city, with a corresponding reduced share of taxes going to the county, according to Tom Linhares, director of the Multonomah County Tax Supervising and Conservation Commission.

A voter-approved library district could reverse that trend, cutting city funds by the equivalent of 1 percent of the city general fund, and giving the county an additional 2.4 percent in discretionary funds.

So how do the three leading candidates for mayor weigh in on this delicate issue?

Brady wants tradeoffs

Eileen Brady was up to speed on the issue and knew it could mean a $5 million annual hit to the city's coffers.

"In the end, I'd probably support a library district," Brady told the editorial board. "It's "probably a really good idea."

However, Brady suggested she might condition that support by seeking concessions from the county in exchange.

Brady said the library system serves the city's children and workforce, and provides important neighborhood centers that the city should support.

However, she said if the city loses $5 million a year from its general fund, she'd like to see the county agree to pick up some programs now funded by the city, such as rental assistance.

"There are real programs that will have to be eliminated if (the library district) occurs," Brady said, adding that the mayor and county chair should negotiate some tradeoffs.

Hales alters stance

Though Charlie Hales is the lone City Hall veteran of the three contenders and possesses the most inside knowledge of how the city works, he struggled with the library issue.

Initially, Hales said he'd oppose a library district, branding it as an unnecessary extra layer of government. But later, after a staff member briefed him on the issue, Hales changed his position.

"I will support both the district and the levy," Hales said in a followup interview.

Hales said he was aware of the budget hit to the city from a library district, but said the city and county need to cooperate on provision of local services, "and that's a two-way street."

Hales noted that the city has been "maxing out" its use of urban renewal funds, reducing potential taxes to the county.

"I think it would be greedy of the city to say, 'We've got ours and now you can't have yours,' when these public services belong to everyone," he said.

Smith 'neutrally supportive'

Jefferson Smith said he'd be "neutrally supportive" of the library district, meaning he'd support it but not actively.

Smith noted that the city's liberal use of urban renewal has limited the county's funding.

"We need to make sure the whole city works," Smith said, pointing out that county libraries benefit city residents. "We've got to have a commitment to look at the whole picture."

Besides, he said, "I don't have a better idea" for funding libraries.

His major concern, Smith said, would be to assure that the libraries are "nodes of the 21st century knowledge economy."

County Chair Jeff Cogen said he'd like to speak with the mayoral candidates to hear their concerns about the library district, and address those issues. But Cogen said that's premature given the pressing need to extend the temporary levy in May. "If we don't pass this levy, frankly, it's all moot."

A two-month-old public opinion poll, showed a majority of voters were inclined to support the levy, Cogen said. But it was a slim majority.

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