Letter: Approving urban renewal district would lead to raiding school fund (May 8)

CORVALLIS GAZETTE-TIMES: OPINION 5/8/2009 Letter by John H. Detweiler - The money that will be accumulated to fund Measure 02-68, the Corvallis downtown urban renewal district (URD), is not “free money.” It is revenue foregone by governments that will not be available for other uses, such as police and fire departments. Reduced tax revenue may well result in local governments raising taxes to cover emerging requirements.

Yes, the state back-fills the money that comes out of school districts’ budgets due to urban renewal. However, that back-fill comes out of the money appropriated for all school districts. Therefore, less money will be available for all school districts. If this measure passes, Corvallis will just be the latest local government to raid the school system for urban renewal funds.

An estimate of the revenue foregone is shown in table four of “Report on the Downtown Corvallis Urban Renewal Plan,” which I have not been able to find on the Corvallis Web site. If you can’t find the report, ask your city councilor for a copy or check my Web site, http://www.peak.org/~detweij, for my analysis of the financial consequences of approving the urban renewal district, which includes table four.

It is not prudent to tie up tax revenue for long periods in good times, let alone in bad times, because we may need money for something else that is more important than urban renewal. If we want to fund projects, we can fund them individually when the details and need have been clearly stated. Vote NO on Measure 02-68.

John H. Detweiler, Corvallis Read More......

PERS shortfall should influence 'no' vote on URD

LETTER submitted to the Corvallis Gazette-Times by John Detweiler: On March 29th, the Sunday Oregonian ran a headline "PERS falls into a familiar chasm" with the sub-headline " The public pension is billions short again; barring a stock rally, your tax dollars will fill the breach". The accompanying graph shows assets of $37.1 billion and a shortfall of $18 billion. The next day PERS came out with a fact sheet,
which can be found at: www.oregon.gov/PERS/index.shtml, which tells us that the fund was valued at $42 billion at the end of February 2009.

The sheet does not tell us what the shortfall is; but it does tell us that unfunded liabilities are amortized over 20 years, allowing time for markets to recover, and that the current funding shortfall is due to lower investment returns, not a large increase in system liabilities as was the case prior to the 2003 PERS Reform.

In May 2009, Corvallis is going to vote on establishing an urban renewal district (URD) and paying for it with tax incremental financing that diverts money from general government. We know that life expectancies are increasing requiring changes in social security. Do we dare assume that PERS will not require similar changes or that markets recover quickly enough to amortize lower investment returns over 20 years? Corvallis may be faced with a PERS induced tax increase. It is not prudent to divert tax money to the URD when we are facing these kinds of unknowns. Vote against the URD.

John H. Detweiler; www.peak.org/~detweij Read More......