Mayor Potter and the Millions Slipping By

Mayor Potter, said in his recent opinion piece, that "diverting [city] funds to schools will have an immediate impact on programs the community deeply values — for instance, swimming pools, backlogged street paving, jails and parks maintenance. Many will be scaled back or stopped altogether."

The Mayor must have just recently discovered this dynamic. Otherwise he may have voted against the $10 million property tax exemption (abatement) for the planned Alexan, SoWa apartment tower. An exemption which failed on a 3 to 2 vote by the council but would have provided nothing in return had it passed.  A closer look at other recent decisions and the urban renewal funds would reveal millions in budget dollars being diverted for questionable purposes.

His concern for schools and other programs which the community deeply values may have been more front and center had he realized that diverting city funds may have adverse effects.

This may be good news for the city should the Mayor apply his new observation to current and planned projects which divert massive amounts of city funds.

Whether it be the Tram, the $1/2 billion for SoWa development, the $557 million for a new transit mall and light rail, or the convention center hotel, City management must come to grips with the size and impacts of diverting city funds.

A good start would be to get the Portland Development Commission to start obeying the State law which requires yearly reports on the impacts of diverting city funds. Exactly what needs to be known.  ORS 457.460


In addition to other means of diverting city funds, Urban Renewal now diverts some $65 million in city funds away from programs the community deeply values.

It is reassuring, however late in coming, that Portland Mayor Potter may be providing the leadership necessary to begin anew an effort to protect those values and the city funds they require.   

As an added bonus the Mayor, and the city, may pick up desperately needed support for solving the school funding debate. 

Steve Schopp   


  • Steven Plunk

    For years urban renewal districts have been siphoning money away from general government purposes including schools. The beneficiaries usually are a select group of merchants, property owners and contractors who exploit the “free money”.

    We need to rethink the whole urban renewal concept and look closely to see if it has paid off. I doubt it has.

  • I realize this is becoming a mindnumbing mantra with me. Great post Steve but you left out the fact that most of these urban renewal projects are paid for by Tax Increment Financing bonds that are paid back from property taxes that otherwise would be destined to finance the statewide schools budget.

    If mayor Potter really wants to help school funding he should work hard to retire this TIF debt and begin to return the excess funds back to the state. If education was his number one priority this would be proof.

  • Jeff Rempfer

    As usual, a deeply intellectual and factual commentary from Steve Schopp. I don’t know him, but I hope he runs for political office again.

    I’m not an expert on TIF and the whole urban renewal process but it seem like a myth to me. For nearly twenty years we’ve been using this process to fund rail, trolleys, luxury condos and such, and the results speak for themselves. Wapato jail sits vacant, Jefferson High is nearly 100 years old and most other schools are over 50, goods cannot travel through the area without major congestion and businesses aren’t flocking here at all. What good has it really done?

  • Steve Schopp

    I usually do include that but this piece was working off of Potters. It becomes too lengthy to iclude everything every time.
    UR is actually worse than just taking property taxes from schools etc. because it is borrowed spending and the Increment repayment incures debt service costs.

  • Steve Schopp

    The CoP now has 12,000 acres and approximately $3.2 BILLION of assessed value in their Urban Renewal “increment”.

    That’s 3.2 BILLION in assessed value NOT getting taxes for schools and other basic services.

    The PDC and city are covering this up.

    $3.2 Billion X $5.00/1000 for schools = $16 million in diverted school funding this one 05-06 fiscal year alone in the CoP.

    County wide it grows. I don’t have Mult. Co numbers.

    Clackamas County has $1.34 BILLION of assessed value in their UR increment which is diverting $25 million this year away from basic services, of which $6.7 million is from school funding.

    Clackams county is about to spend $23 million in UR borrowed funding to help expand Clackamas Town Center.

    Portland is about to ramp up their UR borrowing and spending.

    Apparently no one is going to say or do anything about it.

  • Steve Schopp

    The continued misrepresentation by public officials on the use of Urban Renewal promises to extend chronic misspending on boondoggles.

    I have broken down Urban Renewal abuse in Portland to these very simple bullets.

    1) Portland now has 12,000 acres within 11 Urban Renewal districts.

    2) The total assessed value for the property within these districts is $7.5 Billion.

    3) Property taxes from $3.5 Billion go to basic services: Schools, Parks,
    Libraries, Police & Fire.

    4) Property taxes from the other $4 Billion, now $62 million per year,
    DO NOT. Instead they go to pay, with interest, the debt incurred by
    spending on light rail and private development.

    5) Schools get $5.00 per every $1000.00 of property value.
    $4 BILLION in property value is NOT supporting schools.

    6) With 70 Urban Renewal districts around the State the common school
    fund and other struggling local government services lose hundreds of
    millions every year.