On Wednesday, the City Council votes on whether to approve an urban renewal district so that Bend can use tax increment financing , or TIF, to implement the Core Area Plan and make the vision for a vibrant, healthy and inclusive Bend Central District possible. But TIF is a financial tool that is easily misunderstood, and recent Bulletin editorials don’t provide the larger context around what the numbers really mean or how this plan will benefit all of us. Because there appears to be a lot of misinformation about what the TIF is (it’s NOT a new tax), where the money will come from and why, I will attempt to clarify some of these points.
Bend’s population is exploding, and we need a strategy to accommodate the growth. one that utilizes underdeveloped parts of our city instead of sprawling onto our farms and forests. We need well-laid plans that prioritize efficient use of land and protect what we value most about living in Central Oregon.
The Core Area Plan presents a solution. It focuses growth in the inner east side of Bend along Third Street, an area that currently houses one resident per acre but has the potential to accommodate thousands of additional residents and add new jobs in the heart of Bend.
The vote on Wednesday is just the next step in this 30- year plan. It does not raise taxes on anybody — property owner, business or resident. It doesn’t put in place anything drastic or immediate. Instead it makes our existing taxes work better for us.
Since the Bend Central District and much of the surrounding Core Area is underdeveloped, the “taxing districts” such as schools, parks, library, city, and county don’t get much tax revenue from this area. In fact, the increment Deschutes County receives from the Core Area each year is less than 0.0104% of its annual budget.
Recent editorials about TIF claim that our schools, parks and policing will suffer severe financial hardship if it is approved. Taken out of context it’s easy to draw this misleading conclusion. For example, yes, the sheriff’s taxing district could have its revenue reduced by about $20 million over 30 years. But the increment the sheriff’s office receives from the core each year is only about 0.103% of its annual budget. Plus county law enforcement doesn’t spend much time in the Core Area, which is under the jurisdiction of the Bend Police Department.
There was a recent editorial entitled “Bend Councilors will decide on $87 million in school funding.”
Yikes! And not exactly.
Since school districts send their taxes to the state and the funds are redistributed to local schools, the impact to the Bend-La Pine school district would be closer to $5 million over 30 years. Since cities across the state use TIF, Portland urban renewal districts actually have a bigger impact on our local schools than the Core Area TIF would.
In order to invest in this plan for more sustainable growth, the taxing districts only need to forgo that 3% increase in revenue generated by the area each year. TIF leverages that increment to not only achieve the goals of the Core Area Plan, but also to stimulate private investment that grows the overall value of the area. At the end of the 30 -year plan, all of the taxing districts would get about four times more revenue from the area.
Taxing districts are supposed to be looking out for all of our future — the Core Area Plan offers a long-term plan for sustainable growth that will benefit all of Central Oregon. It just needs to take the next step. For more TIF FAQs, visit www.bcdinitiative.org/whats-happening/2020/7/30/faq-about-tif.