There are still many unanswered questions surrounding what BS Oregon refers to as the “community enhancement plan”. The plan calls for 25% of the annual fees paid in lieu of taxes from the Jordan Cove LNG terminal to be distributed to the taxing districts. Who is responsible for making those distributions? The non-profit corporations? Will they have paid staff?
FERC still hasn’t announced a date when we can expect the draft EIS or a Final Record of Decision on the Jordan Cove project. It is unlikely, even if approved, this project will break ground before 2016
In the decade since the Canadian company behind Jordan Cove Energy Partners first revealed its intention to construct an LNG terminal on the North Spit, proponents have consistently listed invigorating the county’s tax base as one of its prime benefits. At a recent meeting to explain a proposed community service fee hosted by members of the newly formed Boost Southwest Oregon, presenter Todd Goergen speculated that the estimated $4 billion terminal would “double the county’s tax base.” Goergen added, “it is definitely a game changer” to which Coos County Assessor Steve Jansen heartily agreed.
Indeed, absent urban renewal districts and enterprise zones, if the project were built and taxed properly it would be a tremendous boon to the local taxing districts.
Jordan Cove would pay $40.3 million in annual taxes, including $22.5 million into the Oregon State School Fund. The struggling North Bay Fire District would receive $4.5 million annually. The Coos County Library Services budget would increase by $2.9 million and other taxing districts would see similar windfalls. Coos County’s general fund would see an influx of $6.3 million yearly.
“The county’s funding problems would be solved,” said Commissioner Bob Main.
Jordan Cove’s champions have been trumpeting the tax benefits all along, and with tax revenue numbers like these many problems would be solved. So why now are these same “boosters,” the very same who have lauded the enormous tax potential, now working hard to effectively take Jordan Cove off the tax rolls for the next 20 years?
According to Goergen, who happens to be chairman of the Coos County Urban Renewal Agency, part of the problem lies with the urban renewal district. Those funds not dedicated to education, or $17.7 million, assuming Jordan Cove was paying its full share, would go to urban renewal. So a mechanism was needed to avoid diverting such a large increment away from the taxing districts. The community enhancement plan was born.
Utilizing a long-term rural enterprise zone tax abatement, the plan reclassifies taxes as “fees” and funnel those funds, albeit at a significant discount, into two private non-profit corporations controlled by self-appointed directors. During the meeting, however, it was revealed that the county could, with the stroke of a pen, abolish the urban renewal district and in fact, the plan is dependent upon just that.
Another reason given for offering a tax savings, upwards of $500 million over the life of the abatement to Canadian shareholders, is Oregon’s system of ensuring that all students have equal educational opportunities. The South Coast Community Foundation was formed, according to Bill Lansing, at the request of Jordan Cove. Lansing is one of three people along with Joanne Verger and John Whitty tapped to direct the distribution of fees paid by the company to benefit local schools in such a way as not to trigger the state to withhold funding through “equalization.”
Oregon ensures all schools receive a minimum funding allowance per average daily attendance by backfilling any shortage not supplied by local taxes. In the event local property taxes cover the required allowance, the state provides no additional funding. In order to provide additional assistance for schools many communities have established school foundations.
“We have built an impenetrable wall,” says Lansing. “To keep Salem from taking the money away from us.”
The boosters’ plan, conceived outside of public view, calls for Jordan Cove to pay an apparently arbitrary $12 million in community service fees rather than property taxes. Of that figure, $6 million is earmarked for the education foundation and the directors have decided they will distribute half or $3 million through grants to local schools. The remaining half will build up an educational endowment says Lansing.
Efforts to help our struggling schools are laudable, but uses of the foundation funds may be limited precisely because of the state’s equalization rules. If implemented, the $3 million a year this plan dedicates to area schools will deprive the state school fund of half-a-billion dollars over the term of the tax abatement.
The boosters are, nonetheless, determined not to share the Jordan Cove spoils with the state. In one of the more revelatory statements of the meeting, Lansing explained that the education foundation’s bylaws don’t require the money be spent on education at all.
“Our big hammer that we put in the bylaw document,” explained Lansing. “Is that if the state comes after a $6 million equalization, we will just not give it to the schools. We will either hold it in the endowment, rebuild the port or give it to other 501 (C)
It remains to be seen whether Oregon will allow four Coos County taxing districts to hijack statewide school funding but its all moot unless Jordan Cove is built.