Trina Baughn
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.
Joseph Lee says
For those wondering what was coming next the wait is over. I find it odd that a sitting Council member would damage business prospects, our market and this city with talk like this. What’s your problem Ms. Baughn? Would be to much to expect from you to have you say one good thing about Oak Ridge?
Matt Bailey says
Joe, haters are gonna hate. This is a planned strategy on Trina’s part-lose on the OOP claim, lose on the turnover lie, so now she needs to divert the attention to other areas. Only a truly miserable person could be filled with this much venom and unhappiness.
Emilee Smith says
How did Market Square and the surrounding areas in downtown Knoxville became so populated with thriving businesses. TIFs. How did Turkey Creek become a reality and become so populated with thriving businesses? TIFs. How does any thriving business area, whether it be retail or industrial development usually end up in a particular location? TIFs Ask any business person how the development came to be and they will tell you. TIFs are important in growing the economy in any area. One thing Ms. Baughn fails to point out about Farragut not paying property taxes is that they also don’t have the services that we pay for. They especially do not have their own police and fire departments, as well as many other services that Oak Ridgers enjoy. Farragut is a bad comparison because they are not even close to be the same size (with respect to area) that Oak Ridge is.
Sam Hopwood says
TIF’s Emilee? Kroger is thriving and giving a large boost to OR and they did it the old fashioned way, by investing their OWN money… NO TIF”s… That is capitalism at work, not socialism.
And Farragut? They continue to eat our lunch by attracting new residents who simply get more bang for their buck in housing. That’s the name of the game that OR still hasn’t learned. Nothing new there.
You and Joe and Matt really need to get your heads out of the sand. Shooting the messenger won’t get it, never has.
Emilee Smith says
You are correct, Sam! Kroger did not take advantage of TIFS, however, the did take advantage of new market tax credits which saved them several million dollars. Have a GREAT day!!
Joseph Lee says
Sam, Your favorite, soon to be former, council member continues to missrepresent and tell lies about the facts. For example, she states as fact:
“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.”
The fact of the matter is that the full amount of the property tax is paid by the property owner on the improved property. The value of the improvements and the property tax generated by them is applied to the TIF loan. The full value of the sales tax generated goes to the city and county and has nothing to do with the TIF. After the TIF loan is paid off the full value of the property tax also goes to the city and county. TIF is a great tool to use when needed to move an important project forward.
The Anderson County Commission voted unanimously (16/0) in support of this TIF. Six of seven Oak Ridge Council members voted (6/1) in support of this TIF. Ms. Baughn voted NO.
Tell me again Sam. Who is it that has their head in the sand?
Matt Bailey says
Good afternoon, Sam. I haven’t said a word and you’re already picking on me! Good grief! I might suggest one thing: Anyone can whine. That’s easy. I really think what we ought to be doing is trying to find solutions. Surprise me. Make one. If you have already, I apologize, but I don’t recall one single positive solution. Something creative. You went to school here, played ball here, right? Remember what it took? A positive effort by a whole team, if I remember correctly. Teamwork. Come on over, Sam. The water’s fine.
Sam Hopwood says
Good to hear from you Matt. A positive solution you say? Gee, that’s not a hard one, just live within our means. You know, like most of us have to do. Our little village is up to our eyeballs in debt and we still keep giving it away. I suggest that is a good place to start.
Matt Bailey says
I’m sorry Sam. I should’ve known better. Certainly people would leap to live in Oak Ridge if we just simply adopted the adage “Oak Ridge, where we live within our means”. I think you should recommend that we adopt that slogan.
Sam Hopwood says
I wonder if Greece wish’s they had lived within their means. What do you think? I live within my means but maybe you don’t. Good luck…. 🙂
Matt Bailey says
I could not agree more, Sam. I’m sure we all aspire to live within our means. But to attract more business and more residents, we have to be creative, wouldn’t you agree? Why not pay a realtor an extra 1% to sell a house here, or pay the new homeowner’s property tax the first year, or free dinner one night a month for a family of four to move here? NOW, some of those – or all – may not be legal or feasible. But let’s kick some ideas around instead of the same old tired “live within our means”. How about free wi-fi all over OR like Morristown? Or work out a program with the labs for new kids to have some involvement with programs there? Free pool membership? Let’s do something!! Maybe we are and I don’t know it. We have a few thousand brilliant minds in this town, let’s try using them. Instead, some folks listen to the increasingly negative Ms. Baughn and apparently her new best friend, Mr. Chinn – who by the way gave me a completely different impression of his vision of OR prior to the election – and too many of us spend too much time defending her bogus claims to the media, her out and out lies about our schools, and her continual sour demeanor. Let’s try something new. Let’s try something positive. Let’s develop a panel to meet with the Labs (maybe it already exists) to find out what we can do to enhance the attractiveness of Oak Ridge to new employees. In other words, let’s try! Let’s quit whining. Let’s work together instead of running to WATE with our new fabricated conspiracy of the month. Whatta ya say?
Sam Hopwood says
Oh my Matt, I did so hope that you would slow down just a bit on giving away the store to try to entice more affluent folks to move to our little village. As I stated before, attractive and affordable housing is the name of the game. Seventy year old cemesto’s won’t cut it and attractive housing is simply available at more bang for your buck than in OR. That is why a large percentage of city and school employees – and those who toil at the local bomb factories – choose to live elsewhere and commute. We are what we are and we just can’t seem to accept that. Oh well, for me, I shall continue to do it the old fashioned way, live within my means. Works for me… 🙂
Mike Mahathy says
Hey Sam. I can’t remember. Were you against the Target investment?
I’m glad there are those with vision to grow our economy. I hope people wanting to do business in our city are not run off.
Sam Hopwood says
Hey Mike good to hear from you. Hope all in going well at the Outpost. But yes, I was against the GREAT TARGET ATTEMPTED RIPOFF. You are aware that there never was a deal for Target to come into OR. Wishing thinking won’t get it. OR dodged a real bullet there.
Incidentally, I support a city and county tax increase. I AM surprised that the increases were not larger.
Mark Caldwell says
Quarter-million dollar bathrooms? I agree Ms. Baughn, let’s not build anymore of those. But city employees deserve a raise.