The Wasco County Board of Commissioners passed a resolution May 23 to begin initiating plans for a new roads district following a joint meeting with The Dalles City Council.
“We just had to show a bit of leadership and that we were really willing to step up on this one,” Commissioner Rod Runyon said. “It’s a big decision, but ultimately we’ve got to give the voters an opportunity to decide their own destiny.”
The issue will be put to voters on the November 2014 ballot, Wasco County Public Works Director Marty Matherly said, and as far as the committee is concerned, the need for a solution to the road department’s current lack of funding is very serious.
If the road department were to continue operating within its current funding parameters while still maintaining its already reduced service levels, Project Manager Arthur Smith said all its reserve funding would be “depleted within four or five years,” with both paved and gravel roads further deteriorating in the process.
Federal or “safety net” funding the department received in previous years is “no longer even on the radar,” Smith said.
“The formation of a new road service district is really the only funding tool the counties have that can generate the $1.6 million a year we need,” he said. “We have 300 miles of paved road, 400 of gravel and 120 bridges. It’s a $300 million to $500 million transportation system, which is why we need about a million and a half a year to keep it up.”
One downside of forming a county-wide road district that includes the city of The Dalles, however, is the potentially substantial compression increase that could impact other taxable agencies, resulting from the $1.23 per thousand tax needed to levy the $1.6 million.
Compression occurs when a property’s tax bill exceeds the legal limit of $5 per $1,000 of a property’s real market value for education or $10 per $1,000 for general government.
Once that happens, the amount collected is reduced uniformly among taxing agencies, essentially “squeezing” each, and at times resulting in significant revenue losses.
However, temporary levies are compressed before the taxes that fund permanent districts, thereby reducing the potential impact it can have on other agencies’ budgets. Since the tax rate per thousand is lower for people living outside the city of The Dalles, the city would receive no additional benefit by being part of the road district, but taxpayers would also not be required to pay additional property tax, as discussed by city officials. A temporary solution, however, is not what the roads department said it is looking for.
“It’s important that taxpayers are aware they have never been asked to pay property taxes for the maintenance of their roads before,” Matherly said. “Originally, the great majority of our funding came from timber receipts, but the federal monies we received to make up for the loss of that revenue resource has all but gone away. We’re only asking for taxpayer’s help now because, a, we need it, and, b, we have no other choice.”
In response to a citizen audience member’s question of whether the city could instead levy a higher gas tax in cooperation with the county to generate the necessary funds and simultaneously avoid the compression issue, City Manager Nolan Young said the increase “would need to be extremely high in order to generate enough revenue. In other words, 9 cents would only get you about $90,000. So, you can already see you’re just not going to get there.”
Councilor Tim McGlothlin said the only way the city and county could decrease the potentially very negative impacts of compression would be to expand the property tax base through economic growth including new residential, industrial and commercial growth, and rising property values.
Commissioner Rod Runyon pointed out that if there was ever such a positive upswing in real market value in the area or any unforeseen revenue put forward by the federal government, the board of commissioners has the power to reduce the $1.23 tax rate paid by citizens within the road district to reflect those changes.
“The board would have the authority to reset the tax rate each year if need be,” he said, “so there is enough flexibility in the plan to allow us to make those reductions, should they be warranted.”
Walter Denstedt, resident of The Dalles, said he thought it was very important citizens be aware of the potential impact increased compression rates could have on various agencies around the county.
“There are districts that are going to be impacted that aren’t being talked about here,” he said. “These other districts are not going to get any money out of this deal, they’re going to lose it, and they’re going to get a lot more money yanked out from under them if it goes through.”
“Every bit of this,” he continued, “impacts the fire district. Nobody in the county’s saying we’re not for better roads, but some of us are basically hanging on by our fingers as it is.”
“Compression is a really difficult thing to understand,” Councilor Linda Miller agreed. “Everybody wants something done about their streets because the deterioration is so bad and we know it’s just going to get worse if we leave it, but I think they need to be aware of what’s going to happen as a result of making the decision to improve them with the resources we have available to us.”
Mayor Steve Lawrence concluded the city was not yet prepared to make a vote on whether to opt-in to the county’s proposed road district or not, but that further discussion, particularly in regard to the compression issue, is warranted.
“These are tough decisions we have to make,” Commissioner Steve Kramer said, “but we need to work together as much as possible in order to move forward with this before we start seeing more and more declines in our road system over time. Yes, the compression is going to hurt us no matter how you look at it, but we need to be able to at least sustain and maintain what we have now in order to keep us on track for the future.”
Kramer made the motion to initiate the formation of a county road district shortly before the meeting ended, excluding any cities who vote not to be included within its parameters, and the resolution passed the board unanimously.
In order for the proposed road district to make it onto the November 2014 ballot, the county will need definitive answers from the cities by mid-June and to adopt the resolution no later than June 26 to allow the road department enough time to apply for the district’s formation.