New Property Taxes or Reduced Employee Compensation?
***Curry Coastal Pilot, Saturday, August 4, 2012-Page 5A***
Curry County should consider four ballot measures
Public Forum (1,100 words)
By Gary Milliman, City Manager, Brookings
The federal government has broken its decades-old agreement with the people of Curry County by not permanently reauthorizing the revenue stream created to replace timber tax revenues when thousands of acres were taken out of production by federal action. Somehow, continuation of this funding is now seen as an “earmark” or “pork barrel” funding in the eyes of most federal legislators.
So, the people of Curry County have been subjected to a fiscal roller coaster ride for several years now, and we have largely come to rely upon eleventh-hour bailouts delivered by the Oregon Congressional delegation. Even so, the funding is declining and no one should be surprised if it comes to an abrupt end. As that end draws near, the debate over how to deal with the lost revenue is fueling more local political debate and newspaper headlines.
The July 28 issue of the Pilot reports that County Commissioners are still considering options for placing a tax measure on the ballot in the coming months. Commissioners noted that they have taken some dramatic actions to reduce the cost of County government by shifting a number of services to nonprofit organizations and enacting other cost-cutting measures. A few of these are mentioned in the Pilot article; I urge the Commissioners to prepare a comprehensive report of all of the actions they have taken in this regard and post it on the County website.
As a member of the Curry County Citizens Committee, I was among those who supported the concept of exploring a sales tax as a mechanism for generating sufficient funding to sustain County government operations. We have a lot of visitors to Curry County and, on its face, it would seem that a sales tax would pass a portion of the cost of providing services on to people who don’t live here. Good for us, right?
Maybe not. Since serving on the Citizens Committee I have learned that just over the border in California, state and local government is lamenting about a phenomenon generally referred to as “retail sales leakage.” In short, there is increasing alarm in California that, as their sales tax rate now approaches 10 percent, more and more residents of border counties are crossing over into Oregon to take advantage of the zero sales tax. As a result, there is a movement afoot in Sacramento to reduce the sales tax rate in border counties in hopes of keeping those retail sales dollars home … in California.
So, while it could reasonably be argued that a Curry County sales tax of 2-3 percent would not be a major deterrent to out-of-state retail customers, that argument quickly fades if California reduces the sales tax rate in Del Norte County by a percent or two.
I propose submitting three property tax measures to the voters:
Sheriff’s Patrol Services. The County should form a law enforcement district solely for Sheriff’s patrol services. First, the County Commissioners need to determine, in consultation with the Sheriff, what level of staffing is needed to adequately handle the need for Sheriff patrol and response services in the unincorporated areas of the County. Build a budget based upon that level of staffing, and determine what property tax rate needs to be applied in the unincorporated area to fund that level of service. Put that tax measure on the ballot in the unincorporated area only. If it fails, curtail patrol services in the unincorporated area when the federal money runs out.
General Government Services. This includes services that benefit all residents of Curry County, including those who reside in cities and unincorporated area residents. These services include everything from the assessor to juvenile probation and would include operating a County jail. Determine the cost of maintaining these services at the current reduced levels and calculate the property tax rate needed to fill the funding gap left by the federal de-funding of SFS. Put that tax measure on the countywide ballot.
Include in that ballot measure that the property tax rate would be proportionately reduced if federal funding is restored, or by the amount of new timber tax revenues are received. Include provisions that these property tax revenues cannot be used to pay increased employee compensation above the annual CPI and cannot be used to fund any new service. Provide also that the County must appoint a citizens oversight committee to review the use of the additional tax revenues and issue an annual report to the public on how the funds are being used.
Jail. The Commission and the Sheriff need to make a decision on whether to repair the existing jail or build a new one. Since the existing jail is in a tsunami inundation zone, replacing it is the best course of action. The County needs to prepare a construction budget for the new jail and engage financial services to determine the appropriate term and estimated tax rate needed for a construction bond. Put a property tax bond measure on the countywide ballot to fund the construction of a new jail. By taking advantage of the current incredibly low government bond interest rates and stretching the payments over 40 years, the tax rate needed should be low.
The County Commission has at its disposal the resources for calculating what the tax rates would need to be if a tax plan was presented as suggested above.
But before any tax measure or combination of measures is placed on the ballot, the voters need assurance that the County has done everything it can to reduce operating costs and that the County will be well managed going forward. The current Board of Commissioners has taken this part of the way. The next step … which was my Number One item on the Citizens Committee list of recommendations … is to restructure Curry County government.
What really brought the need for restructuring County government home to me was a presentation by members of the Coos County Citizens Committee. Think about this. Curry County is a multimillion dollar corporation, managed by a tri-partied board of directors … each of whom individually oversees a segment of the organization and may have a different approach, ability and goals … and who are not allowed to make any decisions outside of meeting once a week. It is a structure designed for failure.
So the first ballot measure needs to be one that would restructure County government to mirror City government, with volunteer or part time Commissioners that set policy, and a County Administrative Officer to manage the day-today affairs. County government needs to be reformed … needs to be updated … before the voters are asked contribute more tax dollars.
Curry Coastal Pilot, Wednesday, August 15, 2012-Page 5A
Collective bargaining in Curry County must be radically revised
In this 1,100 word Public Forum [above] not one sentence focused on reductions to wages or benefits in collective bargaining agreements. Aside from the last paragraph, the recommendations are for more taxes to generate more revenue to feed the public sector’s insatiable appetite and addiction to spending.
Mr. Milliman first suggests placing a tax measure on the ballot for Sheriff’s Patrol Services in the unincorporated areas of the county. He recommends the county and Sheriff determine a staffing budget.
During recent Citizens’ Advisory Committee hearings, the Sheriff provided actual staffing scenarios and costs which included employee benefits. He was asked to provide a breakdown of the 40 percent benefit figure he used. He forwarded the request to the county accounting manager. The accounting manager and county commissioners refused to respond to the request. A member of the Citizens’ Committee later calculated the actual benefits and reviewed the worksheets with the Sheriff. The actual benefits were 65 percent of gross payroll; not 40.
The second tax proposal suggested was a ballot measure for everything else that has been previously funded by Secure Rural School (SRS) funds. Such tax revenue could not be used to increase employee compensation above that of an annual consumer price index. Milliman then states the county “must” appoint a citizens’ oversight committee to review the use of the additional tax revenue.
Such a committee is nothing more than a SHAM as was the case in November of last year with the Citizens’ Advisory Committee. December 15, 2011 Commissioner Itzen spoke to the committee and stated elected officials already had met and determined a property tax of $1.40 per thousand of assessed valuation would be necessary, and that the optimum date for such a ballot measure to go to the voters would be May 2012.
A committee member then asked Itzen if the commissioners were going to take committee members suggestions seriously and follow through on them. The reply from Itzen was: “This is an advisory group. You serve at the pleasure of the board.”
The third proposal was to place a 40-year low interest bond measure on the ballot to fund construction of a new jail. No cost estimates were provided.
Mr. Milliman then states that before any tax measures are placed on the ballot, voters need confidence in their elected officials. Agreed, but how is such trust gained after decades of fiscal irresponsibility?
He concludes by recommending a ballot measure which restructures the current form of county government. The recommendation is for volunteer or part time commissioners and a county administrator with responsibility and authority to run the day to day county business. Although last on the list, this measure is the “First” recommendation to be presented to citizens for voter approval.
Should this measure be approved by voters and successfully initiated, then and only then would one or more of the three tax proposals even be considered and referred as a ballot measure in the future. There was no mention of a similar Home Rule Charter form of government.
I would encourage and look forward to Mr. Milliman submitting a second Public Forum piece, expanding on his restructuring recommendation including a projected timeline, and also providing an “estimate” for construction of a new jail. Is it $10, $15 or $20 million?
Sadly, Curry County Commissioners could have referred such a county restructuring measure to the voters a year or more ago. They will do no such thing. Their current combined compensation including benefits exceeds $22,000 per month.
Below is the root problem behind this current financial debacle that must be addressed head on and corrected before Curry and other Oregon Municipalities finances will stabilize.
The last agreement between Curry County and members of law enforcement (Teamsters) was signed by two incumbent commissioners (Rhodes; Waddle) and resulted in a wage and benefit increase of around 25 percent over the length of the 3-year contract that ends June, 2013.
The wage and benefit increases above exclude increased employer (taxpayer) contributions to the Oregon Public Employees Retirement System (PERS) required by the Oregon legislature to shore up deficits in the retirement system. PERS investment losses in 2008 alone totaled some $17 billion dollars which exceeded the entire Oregon general fund biennial budget. Beginning July 2011, employers statewide were required to reallocate their budgets and increase their PERS contributions over a two year period approximately $1.1 billion.
This same scenario will be mirrored again beginning July 2013 when employer PERS expenses over a two year period are expected to increase by another $1 billion to partially backfill the shortfall. Final numbers from Mercer, the PERS actuary are expected to be complete next month.
Curry County PERS contribution rates are similar to those statewide. County rates from July 2009 to June 2011 including the 6 percent employee “pickup” paid by taxpayers averaged about 15 percent of gross payroll. From July 2011 to June 2013 the rate averaged about 20 percent. Beginning July, 2013 the PERS contribution will average around 25 percent of gross payroll and be fully paid by taxpayers. This retirement system is in addition to Social Security (FICA) which is also provided. Download PERS: By The Numbers – April 2012 at: http://www.oregon.gov/PERS/docs/general_information/pers_by_the_numbers_4_12.pdf
One underlying reason wage and benefits packages in the public sector have ballooned to where they are today at the state and local municipal level is that elected officials and other interested parties who negotiate with the unions receive comparable benefits. Curry County officials have over the years negotiated and given away the entire farm and shared in the benefits, which in itself is a massive conflict of interest. Public employees have become our masters and we their slaves.
Oregon taxpayers cannot continue to have billions in taxes diverted from where they were originally intended to go and instead provide public employee’s unparalleled benefits and a second Rolls Royce retirement system. Collective bargaining agreements in Curry County must be radically revised, or the county of Curry must demand the Oregon Legislature allow the county to financially reorganize under Chapter 9 of the Federal Bankruptcy Code.