BUDGET COMMITTEE MEETING
December 2, 2008
Harris Hall Main
Chair David Crowell
presided with Budget Committee members Scott Bartlett, Bill Fleenor, Bobby
Green, Sr., Denis Hijmans, Alice Kaseberg, Tony McCown, Peter Sorenson and Faye
Stewart were present. Bill Dwyer was excused. County Administrator Jeff Spartz,
Budget/Financial Planning Manager Dave Garnick and Recording Secretary Melissa
Zimmer were also present.
I. Call Meeting to
Chair David Crowell
called the meeting to order.
Budget Analyst, reviewed the materials in the Budget Committee binders.
2009-2011 Biennial Budget and Potential Impacts on Lane County
Intergovernmental Relations Manager, reported that he just received the
governor’s budget. He explained
that the budget is analyzed by the legislature and the co-chairs will release
their proposed budget early in the legislative session. He indicated that budget bills will be produced and voted on
by the Ways and Means Committee and they will have the legislatively approved
budget by the end of the session.
Cuyler noted in the
governor’s proposed budget there are a number of areas where the governor was
relying on the legislature to act. Cuyler
indicated that there will be several tax increases the governor is proposing
including a 60 cent tax increase on a pack of cigarettes.
Cuyler recalled that the governor in the last legislative session tried
to impose an 80 cent per pack tax on cigarettes to fund Healthy Kids in the
state of Oregon. He indicated that
measure was referred to the voters and was voted down.
that the governor expected about $1 billion more in revenue for this biennium
and ended up with $1.2 billion less for this biennium than he had anticipated.
He said the governor has had to take cuts in the 2007/2009 general fund
appropriations across the board by 1.2 percent.
He added that it equates into about a five percent cut in expenditures
during this past six months. Cuyler thought there could be short term
implications for counties. He
stated the discretionary budget mimics the County’s budget as there are
services the public relies on in public health and public safety.
He added that this budget could go down as much as $1 billion over the
next biennium depending on revenues. He
noted that $6.4 billion for K-12 education is a slight proposed increase.
He heard it was actually $49 million less than the project need for K-12.
He indicated that the budget tries to pay attention to higher education
and proposes a $1 billion increase in capital expenditures for facilities.
He added the budget fully funds the Healthy Kids and Oregon Health Plan,
but in a reduced scope, through expansion of provider taxes.
He noted that a provider tax is one of the tax proposals the governor is
making paid by hospitals and insurance companies.
He said they are estimated to raise about $700 million in additional
revenue. He thought this would be
one of the major fights during the legislative season with the hospitals and the
insurance lobby coming out in opposition. He
indicated that the Emergency Board was asked to come up with additional funds
because cigarette taxes were lower than projected.
Cuyler noted this
budget reduces care for seniors above certain levels and mental health and
addiction services delivered at the community level.
He noted that this budget has a new proposal for transportation funding.
He recalled that the governor released his Jobs and Transportation Act,
and it proposes to raise $1 billion per biennium through an increased fuel tax,
an increase in registration, title fees and title fees that are new to the
state. Cuyler added that this budget proposes another round of transportation
infrastructure funding with Connect Oregon 3 being proposed in the budget. Cuyler
indicated that it raises the amount to $150 million funded by lottery backed
that the governor is placing a high focus on renewable energy.
He said the governor is proposing the creation of a renewable energy fund
for development of community scaled demonstration projects.
He added that the governor’s budget maintains state funding for county
juvenile departments. He indicated
that it maintains the funding currently in place.
He noted there is full funding for 24/7 coverage from Oregon State Police
patrol. He indicated that there was
enough funding to begin the state’s next prison in Junction City, beginning in
July 2009. He said there are
implications from Ballot Measure 57. He
indicated that it will impact the number of people that Oregon incarcerates over
the next biennium. He added there
would be an increase in health care cost to the prison population and they tend
to be a more expensive population in terms of health care costs than the general
public. He recalled within Measure
57 funding there are proposals for local funding to ensure the repeat property
offenders leaving prison receive community based addiction treatment, intensive
supervision and jail sanctions for non-compliance.
He added it would enable counties to enhance drug court programs.
Cuyler noted that
the funding for salary schedules for state employees assumes no cost of living
increases in the next biennium. He
added the budget assumes a five percent per year increase in health care cost
for state employees and the governor will ask the legislature to re-examine
salary increases for elected officials. He
noted $9.8 million was proposed in the governor’s budget.
With regard to
revenue, Cuyler said there is a proposal to increase the corporate minimum tax.
He indicated that the tax has not been raised since the 1930’s and this
tax has been continually debated. He
noted the federal government is asking the state for a return to a more
responsible management of federal forestlands in Oregon to allow growing jobs in
alternative energy development such as biomass.
that the prison population was 13,557 on July 1, 2008, a growth of .4 percent
during fiscal year 2008. He stated
the population is expected to grow in the next year by 324 beds or 2.4 percent.
He added that over the 2009/2011 biennium; the projected growth of the
population will be 730 inmates.
that there is a total of $13.9 billion proposed in Human Services.
He indicated that some of the increase will come from a provider tax and
an increase in the tobacco tax. He
noted for the Oregon Commission of Children and Families, there is a 6.4 percent
decrease from the 2007/2009 budget. He
indicated the reduction is a result of forecasted revenue shortfalls and it has
been shared equally across all programs in the administration.
Cuyler noted there
are cuts in the Public Health Division. He
said there will be reductions in medical assistance programs and in mental
health. He added that dental
services will be eliminated for everyone other than pregnant women.
He noted that outpatient mental health services for non-Medicaid adults
will be eliminated and in-patient psychiatric care will also be reduced.
He noted for seniors with the Department of Health Services there will be
an elimination of in-home care services to clients receiving less than 80 hours
of service per month. He indicated
that most of the services are implemented by LCOG.
With regard to
public safety, Cuyler indicated that it has been impacted by Ballot Measure 57.
He said a total of $3.55 billion is an increase in the legislatively
approved budget but the governor noted the consequences of the difficult choices
that must be made by implementing the voters’ choices regarding sentencing for
criminal offenders. He noted the
Criminal Justice Commission dealt with forfeitures and they will see an 88
percent increase on revenue through the sale of forfeited properties and other
items involved in criminal cases. He
reported that the Oregon Youth Authority’s budget is increased for closed
custody beds and it holds the counties’ safeguard payments to county juvenile
partners. He said it will be maintaining the 950 closed custody beds throughout
the state equal to current capacity, but does not fund all of the 1,150 beds
forecasted in the October 2008 Department of Administrative Services’ economic
that the governor is trying to maintain the current funding and his priorities
are with children and green infrastructure development.
Cuyler indicated the governor was dealing with the downturn in federal
pass through dollars and the governor has been forced to take additional dollars
from the general fund. He noted
that funding for LRAPA is reduced in the proposed budget and there are cuts for
Health and Human Services, reported that for Public Health there will be a
$600,000 cut statewide. He noted there is a $640 million cut for the
Developmentally Disabled. He
indicated that 24,000 patients will be pushed out of long term care.
He added there will be an additional $300,000 in managed care cuts.
He noted with regard to Mental Health, 90 percent of outpatient services
are scheduled to be cut. He
indicated that figure was $28 million biannually involving 5,860 patients. He reported that there will be a cut of $22 million for
family planning. He added
communicable disease work in the state lab is also being cut.
He commented with the cuts, there will be more indigent people who no
longer will have access to care, but more people will have Oregon Health Plan
Property Tax "Real Market Value vs. Assessed Value"
Assessment and Taxation, reported that as of January 1, 2008, the total value of
all property in Lane County (except for the 100 percent exempt accounts) was
$44.3 billion. She noted that under
Measure 50 rules only $24.5 billion is taxable. She noted there are over 170,000 property tax accounts and
15,000 more that are exempt from the cities, counties and the state.
She added 115,000 are residential and 17,000 are in farm forest special
assessment programs. She noted that Lane County has 14,000 manufactured homes, the
most in the state. She indicated
there was $379 million in property taxes due for 2008. She added that Lane County gets 9 cents on the dollar.
She said that totaled $34 million dollars for this year.
She noted that $31 million is for the general fund and $3 million is to
pay the bonded debt for the Juvenile Justice Center.
that 2007 was the real estate market that drove this year’s tax bills.
She added that during 2007 they added $1 billion of new market value to
the County as a result of new construction projects.
She noted under Measure 50 rules they are allowed to add new taxable
value for subdivisions and partitions and those totaled $387 million in new
market value. She indicated that the largest construction was in Junction
City and Creswell. She reported
that Eugene had new construction of $384 million but it is down significantly
from previous years’ activities. She
added that Springfield was up due to the River Bend Hospital construction.
She reported the total real market value increased 4.74 percent from the
previous year, lower than what they saw in 2004, 2005 and 2006.
She noted the activity that occurred in 2007 only resulted in a taxable
value increase of 3.27 percent. She
said the amount of general fund revenue for Lane County grew by $1.1 million
from the previous year.
that her department has completely caught up with all of the work of the
subdivisions and new property development.
She recalled it was a focus of their department several years ago where
they were behind two to three years in getting new tax lots added to the role.
She indicated that all of the properties are now on the role and
continuing at the three percent increase.
With regard to tax
collections, Spickard reported that they have already processed all of the
timely payments they received through November 17, resulting in $332 million.
She stated that represents 88 percent of the tax that has already been
collected. She added that over 80 percent of all accounts paid in full
and took the three percent discount and only 10 percent paid less than the
minimum amount due. She noted that
more than half of their accounts are paid through a lender or tax service
company and those businesses continue to pay the property taxes to protect the
assets from tax foreclosure even if the individual property owner is behind on
their mortgage payments. She stated
that the primary source of tax revenue in the County comes from residential
property owners. She added that
commercial properties represent 12 percent and they pay more than 12 percent of
the tax. She noted that most
residential properties are paying tax on 58 to 60 percent of their real market
value so any fluctuation in the real estate market for residential would have
little impact on tax revenue.
that based on what is happening with some other states, values are going back to
the pre bubble levels. She said that Oregon tends to lag the market nationwide
and market corrections happen later. She said they would have to see almost a 40 percent drop
between January 1, 2008 and January 1, 2012 to have an impact.
She said if they were to have something happen similar to what happened
to the recession of the 80’s, it wouldn’t be enough to bring the entire
value of the County below the Measure 50 assessed value impacting tax revenues.
that with the 2008 market, they are seeing more residential sales that are short
sales and bank sales. She noted
that the sales volume has dropped and there are fewer recordings with Deeds and
Records. She said they have seen a
decrease in the number of new building permits compared to prior years.
She said of those taken out, construction has not begun and many permits
are for remodels instead of new construction.
She noted that commercial multi-family construction projects have been
continuing. She indicated that they
have seen redevelopment up Coburg Road, the Oakway area, West 11th
and the Gateway area. She noted
that any effects after January 1, 2008 will not show up on the tax statements
until October 2009. She said
they have received approximately 2,000 sales that fell outside their normal
range, meaning they are plus or minus ten percent different than what they have
the house on the tax roles. She
explained that a short sale would not be considered a good sale for the purpose
of changing everyone’s house values.
With regard to
Measure 50, Spickard indicated that it requires that they continue to increase
the maximum assessed value on all properties by three percent per year and
compare it to the real market value. She
reported that most people still have a real market value significantly higher
than their assessed value so the three percent adjustment will continue.
She said that with the slow down in the real estate market, Measure 50 is
providing stability to local governments because they can still receive the
three percent growth in the taxable value of the properties.
that the total value of state industrial accounts located in Lane County and
appraised by the state as of October 2007, was $1.58 billion.
She said between October 2007 and June 30, 2008, as a result of appeals
or agreement to reduce values to avoid appeals, the Courts ended up reducing the
value of the accounts to $1.42 billion. She
added the newest values for the October 2008 tax role have the accounts at $1.38
billion. She noted over one year the properties have lost $200 million
in value. She indicated for the
County there is about $254,000 in lost revenue in the one year correction.
She commented that this economy is affecting the manufacturing sector and
they may see more reductions in the coming year.
that they are seeing less new construction activity, lower industrial values,
urban renewal continues to affect the tax levy and $348,000 was diverted from
the operating levy to support the seven urban renewal districts that currently
exist. She said there is another
one coming from the City of Lowell. She
said it looks like Oregon’s economy will be slow or in a recession through
2009/2010 and they are being affected by the credit crunch with the real estate
market. She noted the population
growth and income levels in Lane County are below state averages and they need
people coming in to buy things. She
added that the large scale construction projects are happening for public
entities like EWEB or the basketball arena and River Bend.
She indicated these projects were employing people but not generating
property tax dollars.
sure how the elections will affect property taxes.
She said the state budget doesn’t look good. She noted the state has less capital gains revenue coming in.
She recommended that for projecting property tax revenues, a best case
scenario for the next few years is three percent.
d. Public Comment
Caldwell, Eugene, asked if
the Steve Schriver survey had been provided to the Budget Committee.
She said it was a survey of 19 chairs and vice chairs of neighborhood
associations. She said in the past
the County has used fear, hype and marketing to try to pass public safety
measures. She noted the responses
from Schriver were that they felt safe in their neighborhoods.
She added in the past two weeks they have been inundated about criminals
released on the streets and making Lane County less safe.
She asked if they were going to ask for a real analysis from the
Sheriff’s Office on the types of crimes people are in the jail for, or whether
to fund more jails and Sheriff or to give more money for social services that do
so much to reduce crime.
asking the Sheriff about the crimes and people released would be good
information for the committee to have.
acknowledged that the Steve Schriver survey was not scientifically valid.
He said it was a pole of 19 community leaders and there was no sampling
or control group. He commented that it was more anecdotal than scientific.
Eugene, noted an often cited statistic is that Oregon ranks 50 in the nation on
per capita law enforcement and Lane County is the lowest in Oregon.
She said the fact is used by the District Attorney and Sheriff to justify
the transfer of limited Lane County tax money from Human Services to prosecution
and incarceration. She commented
that if there was a comparable measure of funding for social services, Oregon
would be at the bottom of that list and Lane County would be at the bottom of
the state. She said there is a lack
of diversity on the Budget Committee.
There being no
further business, Chair Crowell adjourned the meeting at 10:50 a.m.