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Opinion - School Bonds and SDCs
By Bill Bodden, OCVA board member
Below is an opinion piece that was published in the Bend Bulletin on 12/9/2000. It was in response to an essentially good letter written by Wayne Shuman, who expressed disappointment at the failure of school bonds to pass. My point was to show the role I saw SDCs play in the issue. Since then I have been giving some thought on how a failure to pass school bonds could contribute to slowing of growth and will be working on a follow-up letter on this topic. In Marin County in California, voters used rejection of a sewer bond as a means of slowing growth in the 1980s.
School bonds and SDCs
Wayne Shuman (Education needs support - 11/26/2000) and I would probably agree on many points regarding education, but we differed on the recent school bonds. Although I would have preferred to have cast a “yes” vote, as did Mr. Shuman, I cast my first vote ever against a school bond. Previously, school bond votes were approved without question. On this recent occasion, however, I found a preponderance of argument in favor of a negative vote.
The system of paying for schools appears to be grossly unfair. New developments are the primary reason for needing more schools, but developers and new home buyers apparently pay nothing towards the costs of new schools for which they help to create a need. To the contrary, Oregon law (probably influenced by building industry lobbyists and campaign contributions) places limits on system development charges (SDCs) levied by cities. Consequently, it appears that developers are not only not paying for the full costs of their developments, but they are instead being subsidized by tax-paying residents where they do business. Presumably, this arrangement contributes to the profits made by the developers.
Now let us look at taxpayers who were asked to pay higher taxes for schools. Some were already in financial stress. In their cases, it would be improper and callous to refer to another $100 or so as “only.” If they are scrimping to put food on the table or pay for prescriptions, $100 is a lot of money. Others are more fortunate and could pay another $200 in taxes, but in some cases this may be at the expense of needy charities.
Now compare these two paragraphs. Developers are helping to create the problem and making profits in the process but appear not to be sharing the costs. Residents that have been paying taxes for years (and apparently subsidizing developments) are being asked to cover these additional costs even though it would put some residents in a financial bind.
Clearly, we need to scrutinize Oregon’s laws on SDCs. As an initial step, I would suggest that the new councils in Bend and Redmond (and perhaps other cities) get together to finance an unbiased study to determine the total costs of new developments, their costs and benefits to the cities where they do business, who has paid for what, and who should pay. If this study indicates a need for corrective action, then the cities (or concerned citizen groups) should go to the state legislature and appeal to have the laws rewritten.
In my opinion, Oregon should adopt a policy shared by cities in California and, I believe, Washington. I had to pay around $5,000 for a school assessment charge when I bought a house in a new California development in 1988. It was obvious that the new development was creating a need for a new school and more classrooms, and paying for schools is part of the homeownership equation. I accepted that addition to the purchase price even though I never had children in those or any other schools.
Justice Holmes was correct in saying that taxes are what we pay for a civilized society, and education is obviously one of society’s main building blocks. Accordingly, we must hope the rejection of the school bonds eventually proves to be only a delay in approval and not an irreversible decision. For approval in the future, however, there must be a perception that this tax, as with any other, would be fair. Otherwise, future school bonds will have little chance of success.
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