Sixteen years ago, Partners for Progress successfully lobbied the city to spend over $15 million of your (the taxpayer) money to launch a major development on the West End of Oak Ridge. The promises were enough to make people starry eyed. There was to be a picturesque subdivision of nearly 4,000 homes along with an industrial complex that, when all was said and done, would produce 17,000 jobs, $1 billion in payroll, and nearly $13 million in additional annual property taxes.
Three years ago, many of the same folks behind Partners for Progress began a similar PR campaign touting the sale and redevelopment of the mall. “More shopping choices are coming!” they proclaimed. To date, the city has approved the use of $1.5 million of your money for infrastructure costs and a $13 million TIF (tax increment financing), which will suppress property tax revenue at current levels for the next 30 years. In other words, no matter what happens, the 64 acres will continue, as it has for the last decade, to produce only 10 percent of its original value because any increases will be used to repay the TIF loan. Developers and city officials claim that the project will produce $1 million (or 20 percent) in additional sales tax revenue to the city, though, historically, the national retail sales growth rate range is between -11.51 percent to +11.18 percent. Even if we find a way around the notoriously stringent Wal-Mart non-compete covenants and actually bring in real retail, it is absolutely impossible to expect these projections to materialize, since, even in the best of times, we’ve not seen half that level of growth.
Three months ago, CVMR announced their move to Oak Ridge by stating that they’d hired its first employee, would hire 620 more and would begin operations by May. This month, we learned that CVMR is seeking a 14-year, 100 percent tax abatement on its personal property. No dollar value of that abatement has been shared publicly as of yet.
What do these three scenarios have in common? All have been touted as major developments that would save our city, all involve taxpayer subsidies and, as of today, none of them have actually transpired. Rarity Ridge flopped. The mall has yet to sell, and contrary to what we were led to believe, the CVMR deal has not been sealed.
I share all of this not to celebrate failure but to avoid repeating it. According to a report recently released by Leonard Abbatiello of the Equalization Board, “Property tax-exempt properties are increasing at a rate five times the growth rate of taxable properties.” This means that you, the homeowner or small business, are subsidizing the very entities that are supposed to counterbalance your property taxes. To grasp just how large the problem is, consider this: 1,000 acres valued at $6 million yields no taxes and another $60 million in properties yield only half of the required taxes due to city-approved tax abatements. Imagine how much the city could shave off your home’s property taxes if we were collecting the full amount on all of these properties. Better yet, ask for the exact calculation of the next person who tries to tell you how little a tax increase will cost the average homeowner.
Mr. Abbatiello’s report underscores just how important it is that we exercise fiscal restraint at this point in our history especially considering that some of the same proponents of these initiatives are also pushing council to increase property taxes. Yes, those who are quick to forego taxing a chosen few want you to pay more. Not only that, but many of those same people either directly benefit from tax breaks and/or have their salaries paid for by the you, the taxpayer.
In a recent letter to City Council, Oak Ridge National Laboratory Director Thom Mason warned us not to wait on the mall or CVMR revenues to materialize before taking more of your money. Never mind that you fund his salary to the tune of over $700,000 per year; or that the majority of his employees live in Farragut (which does not charge their homeowners a property tax); or that his facilities reside on thousands of acres of nontaxable land within Oak Ridge. No, if we want to attract new residents from the jobs we’ve been promised are coming, Dr. Mason says that we need to increase property taxes now.
Another advocate for taking more of your money is Board of Education Vice Chair Bob Eby. Mr. Eby has asked that you give up Starbucks coffee for water to fund a property tax increase. Ironically, Mr. Eby’s former company, USEC, for whom he is identified as an owner within the PILT application, was given multiple 50 percent tax breaks by the IDB in 2008. Those tax breaks were based on a number of promises that never materialized, including that of 408 jobs. Yet now, Mr. Eby’s current company, which regrouped after USEC filed for bankruptcy, continues to reap the benefits from USEC’s tax breaks.
Finally, the loudest cheerleader for taking more of your money is also one of the largest beneficiaries of your generosity. Every year, the Chamber of Commerce, which is largely made up of non-tax paying members (non-profits, government organizations, and non-Oak Ridge businesses) urges its members to pressure council to increase the property tax rate. What they aren’t saying is that nearly two cents of your property taxes ($175,000) is budgeted annually just for them; that they are squatting on city-owned land for less than $800 per year; or that they pay zero property taxes on that land and their $755,000 building. Of course they want more of your money. Look at how much they stand to lose if they were forced to operate like a real business-supported Chamber of Commerce!
At some point, you’ve got to start holding us accountable for your money. If all of these tax incentives were so lucrative, why does your local government need to keep asking you for more? Why should you pay more taxes when those who are asking for it don’t want to pay their fair share? And why should you trust the city and the schools with more when they waste so much of what you already give them (think quarter-million dollar bathrooms and parking lots)?
I will not vote to increase your property taxes. It’s wrong in every sense of the word. But I am only one of seven. You are 29,000, and we’ve started to see a glimpse of your power in recent months. The only way to prevent further waste by government is to limit its access to your pocketbook. You have multiple opportunities to be heard at City Council and Board of Education meetings. At the very minimum, you may speak for three minutes on any subject not on council’s agenda and, at the most, an additional three minutes on each and every item on the agenda of any given meeting. You can also make your voice heard via letters to the editor, social media, phone calls, and emails. The finalization of the 2016 budget has yet to occur and may not for at least another month. I encourage all Oak Ridgers to use this gift of additional time to make your voices heard on this and any other city matters that concern you. This is your government. Of the people, by the people, for the people.
Trina Baughn is an Oak Ridge City Council member.