In May, 2009, Corvallis is going to vote on establishing an urban renewal district (URD) in downtown Corvallis and paying for it with tax incremental financing. The reader is referred to URD Report (2008) for details on the URD and how tax incremental financing works. No matter how often people say that there will be no tax increases due to this URD, there will be financial consequences. Money will be diverted away from financing general government to financing the URD over a twenty year period.
This analysis is a work in progress. As I learn more, I will update it. For example, I do not know how the Educational Service District (ESD) is affected. However, there is not much money involved in the ESD so the conclusions would not change much. And, as I learn more, I may change some of the assumptions.
To summarize, urban renewal districts in other cities have cost the Corvallis School District over nine teachers so far. If we vote in our URD, Corvallis will lose a fraction of another teacher each year for 20 years. Our other local taxing bodies will lose $23.4 million dollars (in 2008 dollars) over a twenty year period. Oregon's economy and government finances are in terrible condition. Will our local governments try to raise taxes to cover the loss in revenue from voting in the URD?
The reader is referred to table four (page 11) in the URD Report (2008) for an exhibit of the revenue foregone by the various taxing bodies in the Corvallis area. That table, with an additional column, can also be seen here under "plan_table_four". The table shows that $35.6 million (in 2008 dollars) will be foregone by local governments over a twenty year period; however, that is slightly misleading. The revenue foregone by the Corvallis School District (SD509J) will be reimbursed from the state school fund. Therefore the revenue foregone by local taxing bodies is actually $23.4 million (in 2008 dollars) plus the little bit from the state school fund that SD509J does not receive because the reimbursement reduces the amount of money in the state school fund that will to be allocated to all school districts. The result will be that each school district will have a little bit less than it would have had if Corvallis had not approved the URD.
The little bit that SD509J does not receive from the state school fund equates to a small fraction of one teacher over a twenty year period which adds up to 1.845 teacher-years. The calculation of those teacher-years can be found here under "SD509J".
Corvallis is not the only city to have an urban renewal district. And, like Corvallis, the revenue foregone by all the school districts is reimbursed from the state school fund. I estimate that SD509J has lost more than nine teachers because of the foregone reimbursed revenue to existing urban renewal districts. The details of the computation can be found here under "Est_teach_lost"