Corvallis Bleeding Property Taxes…Do We Care?
April 30, 2010 5 CommentsFraming the Economic Development Discussion for Corvallis. The economic base of Corvallis city operations is eroding because of the slow loss of manufacturing jobs and the hemorrhage of HP jobs. Corvallis is bleeding business property taxes.
1. Does the community (that means you reader) care that the economic base of Corvallis is crumbling with no end in sight because of the slow loss of manufacturing jobs and the hemorrhage of HP jobs? Corvallis is bleeding business property taxes (which are levied on both buildings and equipment), which constitute the City’s General Fund. This year the city is facing a $2.5 million shortfall in property tax revenues, predominantly due to declines in property taxes paid by businesses. Next year the shortfall is expected to be worse. This slow bleed is uniquely complicated in Corvallis by the growth of OSU and Samaritan Health (a non profit), organizations which fill buildings and employ people, but PAY NO PROPERTY TAXES to the city. This means that the underlying health of the city, its financial foundation, is in a serious decline, with no fix in sight. Without more private sector businesses and jobs (anything that is not a state job, a city job, a school job, a federal job or a non-profit job), the bleeding will continue.
2. Does the Corvallis community believe that the quality of life in our city, as augmented by City Govt (meaning; parks, bike trails, libraries, festivals, human services, arts funding) are worth keeping at their current levels? Or are we content to let services decline with the inevitable decrease in city funds over the next one to five years as our property tax base continues to erode?
3. Does the Corvallis community want to stabilize the property tax base for the city by encouraging businesses to work here, paying property taxes for the privilege? Or would we prefer to have higher residential property taxes (the growth of which is limited by state law to 3% per household), or an increased number of households ? (sprawl anyone?)
4. Does the Corvallis community believe that small, in-fill growth from encouraging (via economic development) local start up business to take hold here and grow is an appropriate kind of growth (aka Economic Gardening)? Is this more appropriate to the Corvallis community’s values (green overlays, living wages) and resources (limited industrial land) than recruiting large companies?
If yes, then we, the Corvallis Citizens, have to invest in that Economic Development work.
We need to tell our city councilors that the city government should invest in helping create those businesses and jobs. That is what public economic development funding is all about. It’s about the community’s best interest. No one sector benefits more than others, businesses have no more to gain than citizens, and in most cases, citizens have more to gain than businesses.
As a citizen using city services, each of us benefits from effective economic development when it increases the property tax base. History across the US shows, in thousands of communities, that without some investment in economic development, (paying for someone to coordinate the plays and call the action), very rarely are enough businesses established and jobs created.
The private sector is already investing.
We’ve got a large number of businesses, large and small, giving privately to help support John’s work with Economic Gardening, but its not enough. Corvallis needs the public sector to invest, to commit to helping repair the property tax infrastructure.
The Economic Development committee (former Economic Development Partnership board- all community volunteers who have spent from 6 years to 3 decades committed to Corvallis’s economic vitality) think “John’s” style of economic gardening is aligned with the city’s values (local, unique, value-added), goals(modest job growth with modest infrastructure impact) and interests (clean tech, micro nano, nutriceuticals, green building), and we know from the metrics that it’s being effective. Results don’t show overnight, but that’s why its called Gardening…you plant a whole bunch of seeds, and then nurture them to make them grow to seedlings, then transplant them for better conditions, and keep growing until you can harvest. John has been leading our economic gardening for 3 years now, and many of the seeds are planted, seedlings are growing all around town, and a few, like Perpetua, have been transplanted as saplings.
The goals for the Economic Development Director position, (funded by the city, previously by the county, and by private donations), is to have 100 businesses with 10 employees each, and 10 businesses with 100 employees each over the next 5 years. 110 new small businesses is a challenge, but with support we, as a community, can do it. This number of business and jobs will not mean a larger Corvallis, but will help replace jobs, diversify our business and property tax base, maintaining our quality of life.
Why have the economic development director position outside of city government?
- Because it more effectively creates a public/private partnership and encourages private donations of both time and money, by giving both citizens and businesses a stake in the outcomes.
- Because it offers more flexibility and leverage.- the economic director works with city, county, neighboring city and county, state, regional and outside organizations to effect the outcomes.
- Because it is more cost effective. City positions are darn expensive.
Not one comment…what does that say?
Katherine well states the Corvallis/Benton County problem. I would add that another loss we are experiencing is to youth population (including school enrollment) as high-wage private jobs languish, land-availability-constrained housing remains expensive, and the “community conversation” seems to reflect the preferences and pet ideas of comfortable retirees and other financially secure people.
People I respect from other parts of the state have wondered how a city with so much going for it can perform so poorly. I have come to think the reason is that we are, in fact, getting exactly what we really want. But where all this is headed (a great university surrounded on all sides by memory-care facilities?) should worry us.
I am sorry to see that there is an apparent consensus against having the Chamber host contracted ED services. It is certainly not a fundamentally unworkable idea, and Katherine nicely summarizes why it is also a dollar-efficient one.
But perhaps it is a good thing that the City and County have now shattered the status quo – and on the heels of the illuminating Brown et al report documenting the inexorable playing-out of a situation HP local management began warning local officials about at least 15 years ago.
If they didn’t before, city and county elected officials must know now that they now truly own economic development responsibility, and are expected to take positive leadership steps rather than simply levy criticism and manage decline.
The first steps I suggest are for both jurisdictions to appropriate funds (in the amounts they believe ED is worth to their citizens) and to issue new RFPs for contractors (private, but perhaps also allow OSU/LBCC) to bid against. If they should choose to do this jointly with Albany/Linn County, terrific.
This is, by the way, how ONAMI (which has been quite successful) works with the state of Oregon. We are private (no one running up a PERS liability here) and operate under the terms of an administrative services contract which clearly spells out goals, metrics, use of funds, reporting and other responsibilities.
Thank you Skip for your candid contribution here. Is current ED funding allocated through an RFP process? My understanding is that it is currently an open application process.
The next big question is how is that RFP created? I would find the responses to RFIs very interesting. I have found quality information on this topic to be sparse.
I don’t know the full history, but I believe EDP (formerly independent, now hosted by CBCC) defined/proposed its own mission then requested – and received – county and city funding, It also raised private contributions. Besides tax collectors, other beneficiaries of economic development tend to be banks, insurance companies, retailers and professionals/service providers.
This approach puts public officials in a reactive rather than leadership position. Turn it around and there may be more upside than people think. One of those upsides will be consciously choosing to invest (or not) in economic development rather than responding to begging and pleading.
I am a relative newcomer (12 years :-) to Corvallis and don’t know all the history that you know however, I know a few things. Whenever I speak with people who are trying to start a new business or who are building something, I hear only complaints and frustration.
Although in one way people here are very involved in the city (and being involved with a non-profit myself I know how many volunteers there are), in another way we are not involved. One of the reasons is that it seems so difficult to make any changes. So, many people withdraw from the civic involvement and are active in other areas they are passionate about.
I love that forums such as this are springing up from ordinary people who are interested and do think it will make a difference in changing attitudes.
Thanks for doing this.