American Dream

Oregon voters are learning how politicians use tax-increment financing (which in Oregon is called "urban-renewal money") to fund political favorites and steal money from schools, libraries, and other services. The politicians know that voters are much more likely to vote for more money for schools and libraries than for ridiculous pork-barrel projects, so they divert funds from the former to the latter and expect voters to make up the difference.

Here are just a few items in today's news:

• Oregon Health Sciences University proposes to use urban-renewal money to fund the huge cost overruns for its aerial tram. OHSU wanted the tram when it was expected to cost $15 million; now the cost is up to $55 million and it expects taxpayers to fund at least some of the overrun. No one at city hall made any effort to montor the tram's costs. For more on the tram, see Jack Bog's Blog.
• Clackamas County is using TIF to help pay for a light-rail line, and by an amazing coincidence says that many of its libraries are out of money and may close unless voters cough up some extra taxes.
• Multnomah County schools are running out of money, so the county council proposed to give the schools $10 million it doesn't have because it spent all its available cash on other pork barrel projects.
• Meanwhile, in southern Oregon, the city of Medford wants to spend $25 million in TIF money to attract Lithia Motors' business offices away from land the auto dealer owns near the airport to Medford's downtown. I wonder when Medford's libraries will run out of money?

For those who don't know, tax-increment financing means that all property taxes on development after the urban-renewal district is started are dedicated to subsidies to developers (or light rail or whatever) rather than to the schools, fire, police, and other services needed to support the development. Colorado also has something called a "property improvement fee" (PIF), in which sales taxes on retail shops in the development are dedicated to development rather than to whatever sales taxes are normally used for. For more information, see my two-page paper on TIF and PIF.