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August 1st, 2012 AARON MESH | Cover Story
 

When Stacks Attack

The costly Multnomah County Library has never been controversial—until now.

lede_library_3839Photograph by Thomas Allen (courtesy of Foley Gallery, NY)
The Central Library in downtown Portland is a gorgeous 1913 building with 17 miles of shelves, ornate marble staircases and an eco-roof planted with flowers.

The flagship branch of the Multnomah County Library system also has seven of the few public restrooms on the west side of downtown, as well as some of the only free computer terminals.

On a recent Sunday, about three quarters of the 130 computer stations were filled. People logged into Facebook and watched trailers for the next Superman movie. And on the third floor, in the Helen B. Kroll Literature & Historical Library, a man in a baggy garnet sweater was watching videos on XNXX.com, a hardcore pornography site. 

His tastes, visible to anyone at the long reading table behind him, ran toward three-ways and forced sex.

A young woman at the reading table was writing postcards home to Australia. She seemed more amused than upset by the video in her line of sight. 

“It’s kind of a funny thing to write in a postcard,” she said. “You can tell taxpayers where their money is going.”

That’s wildly unfair, of course. 

The Multnomah County Library provides a wide range of unsung services. It assists children with their homework and helps unemployed people find jobs. It holds storytelling sessions and Kindle classes.

If the Central Library is filled with people who have nowhere else to go, that’s because it’s one of the last genuinely public spaces to get generous public funding.

Multnomah County commissioners will decide this week whether to ask for more. 

On Thursday, Aug. 2, they will vote whether to put a permanent library taxing district on the November ballot. This district would replace a temporary levy and be authorized to raise an estimated $65 million a year in property taxes for the library. 

If the county decides to make that move, it will raise the hackles of Portland officials and open old wounds between the city and the county—and pose questions about our expensive library system.

Multnomah County now spends twice as much money per resident on its library as the national average. The library cuts hours even when voters pass new levies. If the ballot measure passes, the library would operate with even less financial oversight than it gets now.

And it will force voters to face this question: Why should the library get protection from cuts while less popular but vital services—such as those for the homeless and mentally ill—aren’t protected?

“This is one more short-term solution for a good cause,” says mayoral candidate and former City Commissioner Charlie Hales. “I would describe it more as a rugby scrum than a pissing match. Everybody’s trying to shove through the same door.”


READING IS SPENDY: In her performance review this month—where she received high marks—county library director Vailey Oehlke wrote that she feels like finding secure library funding “has thus far consumed my entire tenure as library director.”
Regional tax politics is an Alice Through the Looking-Glass world.

There are three tax measures likely to appear on Portlanders’ ballots in November. One, a proposal to fund the arts in schools and throughout the city, would raise income taxes by $35 for every adult over poverty level. Another, a $449 million measure to rebuild and remodel a number of schools in Portland, would raise property taxes.

The library measure? It’s the only one that’s drawn wails of outrage from city officials.

“My interest isn’t in fanning the flames of who’s done what injustice to whom in the past,” says City Commissioner Dan Saltzman. “But this will impact the children of Portland. That much I know.”

To understand this long-simmering feud between the city and county, a bit of background is necessary:

Multnomah County government receives the $1.2 billion it spends each year mostly from state and federal dollars. The City of Portland receives the $2.3 billion it spends each year mostly from utility charges (paid by telecoms), license fees (paid by business owners) and lodging taxes (paid by hotel guests).

But both governments also get a large share of their general funds from property taxes—paid by commercial property owners and homeowners. If you rent, you pay, too: The building owner passes on the cost in your rent.

Those property taxes are capped—by state ballot initiatives and referendums from the 1990s—to $10 per $1,000 of real market property value. (Schools get to have up to $5 per $1,000 of real market value.) 

These caps have forced government to live within means—which was their intent. Governments can go around the caps in certain instances. Bond measures for brick-and-mortar items like new schools can fall outside the limits and raise taxpayers’ property-tax bills above the cap. 

But everything else local governments want to raise and spend from property taxes has to live within that limit—and if their reach exceeds their cap, governments experience a term that tax experts call “compression.”

And compression is a mysterious and feared monster—like sasquatch, but real. 

“There’s maybe 50 people in the entire state that understand compression,” says Tom Linhares, director of the Multnomah County Tax Supervising and Conservation Commission.

Let’s give it a whirl.

The Portland area is already clogged with property taxes. A homeowner in Southeast Portland, for example, is paying six agencies on a single bill, from the City of Portland to Multnomah County to the Port of Portland.

The formula used to calculate whether governments can collect all the taxes they’ve assessed is byzantine. But when property values go down, that $10 per $1,000 cap starts cutting into agencies’ revenues.

“Taxing districts take it in the shorts when property values are going down,” Linhares says.

That pain is called compression.

In addition, all taxes are not created equal. By law, permanent tax rates are compressed less than temporary tax levies.

Both the City of Portland and Multnomah County each assess about $4 per $1,000 of value in property taxes, and lose very little to compression.

But other taxes, particularly those funded by temporary levies, get compressed more. Current examples include the Oregon Historical Society levy and the Portland Children’s Levy. And also the library, which has been funded by a three-year levy that has been voted on and passed every three to five years for 36 years. The library hoped to receive $51.7 million via its levy this year, but lost $16.8 million to compression. 

That’s why the library wants to become a permanent taxing district—so it can escape much of the compression it now experiences. “It means it’s no longer a second-class citizen,” Linhares says. 

Voters funded the library with another serial tax levy again this May, by an unprecedented margin: More than 84 percent of voters checked yes.

“This community loves its library,” library director Vailey Oehlke tells WW. “It would be really wonderful for an institution that’s been around since Abraham Lincoln was president to have a more stable source of funding.”

But that’s not all the ballot measure would do.


A permanent taxing district would raise the library’s property-tax rate from 89 cents to $1.22 per $1,000 in assessed value—and would protect the library far more from compression, as well.

The consequence, of course, is that other functions of government would get less money.

“The library backers are justifiably excited about getting their funding stable,” says Courtney Wilton, a former Tax Supervising and Conservation Commission director. “They also need to own the fact that they’re going to cause bad things to happen to other services.”

Wilton’s right—and it’s making city officials angry.

An analysis written this summer by a city economist says a library taxing district would cost the city $9.5 million a year in property taxes.

The biggest hit? The Portland Children’s Levy, which funds programs for foster kids, early-education classes and intervention services for kids in potentially abusive homes. It would lose $1 million of the $11 million it annually raises from taxes.

That’s why Saltzman—the famously placid city commissioner who ran for office 14 years ago on a platform of fighting child abuse—is upset about the Children’s Levy, his pet project.

He’s seething, actually. 

“I can’t tell them what to do,” he says. “What I find to be sad is that the library folks give us all the lip service on the Children’s Levy, but when it comes right down to it, they don’t give a damn.”

That doesn’t sit well with Multnomah County Chair Jeff Cogen, a veteran of battles with Mayor Sam Adams over funding the Sellwood Bridge.

Now he’s irate about the city’s analysis—which also points out that a library taxing district would raise an additional $7 million for the county general fund and put more compression pressure on other government services. 

“Hearing the city’s tone,” Cogen tells WW, “brings to mind my grandmother’s favorite expression: That is chutzpah.” 

Cogen’s resentment stems from years of the city passing urban-renewal districts, which fund big developments and remove property from the tax rolls, bringing about its own form of compression.

Not to mention, he says, the Portland Fire and Police Disability and Retirement Fund, which eats up $2.63 per $1,000 of assessed property value and forces the county to cut programs to pay for these costs.

Cogen doesn’t mind getting some of that money back, even under the guise of the library.

“We’ve cut mental health programs, we’ve cut community clinics, we’ve cut jail beds,” he says. “If at the end of the day, we get the library on stable, long-term funding, and we have [an additional] $7 million that we can invest in things like after-school programs for kids, and drug and alcohol treatment, I think that’s a good thing. And I’m not afraid to say that.”

Most Portland officials don’t dare mess with the library. Two of the most combative City Hall residents—Mayor Adams and Commissioner Randy Leonard—are sitting this fight out. And the mayoral candidates—Hales and state Rep. Jefferson Smith (D-East Portland)—support the library district.

Cogen is still scrambling to appease all sides. On the morning of July 31, he listened to a roomful of citizens urging him and county commissioners to put the library measure on the fall ballot. 

An hour earlier, Cogen was at City Hall, listening to Saltzman complain about the measure—and assuring him that preserving funding for foster kids is “top of our minds.” (No doubt: Cogen was Saltzman’s chief of staff from 2003 to 2006 and helped his boss pass the Children’s Levy. Cogen’s wife, Lisa Pellegrino, is now the Children’s Levy director.)

“I’m guessing that family dinners over at your house get pretty lively,” Commissioner Nick Fish quipped at the meeting. 

In an earlier interview, Cogen’s initial reaction to the city’s complaints suggests he isn’t amused: 

“To have the city self-righteously whining about, ‘How dare the county impact our general fund!’ to me brings to mind the bully on the beach who spent the summer kicking sand on the little skinny kid, getting outraged when at the end of the summer the skinny kid gets up and decides to get himself a sandwich.” 

But the library is one gourmet sandwich.


SOURCE: 2012 Public Library Data Service Statistical Report
As politicians argue over who gets the biggest slice of tax pie, they’ve mostly avoided something—the operation of the library itself. 

If the library gets its own permanent funding stream, it will be less financially accountable than it is now—freed from worries about how much other government bodies will give it.

Oehlke, the library director, praises her system.

“I can run a darn good library,” she says. “This library has everything to be proud of.”

A librarian for 20 years and the library director since 2009, Oehlke is quiet and welcoming, with honey-brown hair and tortoiseshell glasses. Her favorite book is John Irving’s A Prayer for Owen Meany, but the one she carries around is a spiral-bound notebook that recycles the hard cover of a retired library book: Richard Peck’s mystery novel Here Lies the Librarian.

Oehlke has much to brag about. Books in this library get used a lot.

The library system, which has 19 branches, circulates the second-most books, CDs and DVDs of any public library nationwide: more than 24.7 million items a year, behind only New York City. Among the nation’s top 10 circulating libraries, it ranks second in checkouts per resident: 34 items annually per person living in Multnomah County. The number keeps growing. In the past five years, checkouts have increased by 31 percent.

The library’s storytelling programs gather nearly 120,000 children a year. Its kids’ programs include 17,000 different classes and events in a year. Its recruitment efforts begin literally in the cradle: Every family having a first child gets a welcome basket with a library-card application. 

As libraries go, Multnomah County is driving a Cadillac—with a sticker price to match.

The Multnomah County Library is one of the most expensive public libraries in the U.S.—costing twice the national average.

During the 12 years when the county has cut $50 million in basic services, the library has steadily grown.

American Library Association statistics from 2011, the most recent available for comparison, show it cost $81 per county resident to run the library. That’s more than double the national average, and systems of similar size are spending about $38 per person. The only cities roughly Portland’s size with more expensive libraries are San Francisco and Cleveland.

Yet Multnomah County’s library system can’t afford to keep its doors open. On July 1, the library’s 19 branches began closing on Mondays for the second time in a decade. The library also laid off 43 employees.

“In order to keep the Monday hours, we would have had to raise taxes,” says county spokesman David Austin. “People, I think, understand that you get what you pay for.”

Patrons are upset, but they’re mostly confused. Take the woman in a purple tie-dyed shirt, sitting in a conference room of the Hollywood neighborhood library branch on a recent Thursday evening as the county holds “listening sessions” to gauge public support. She’s mad that she voted for a levy that didn’t keep the library open seven days a week. But she’s not sure who to blame.

“Why didn’t we know beforehand that there were going to be closures?” the woman asks. “I’m really worried, actually.”

This isn’t the first time it’s happened. In 2004, Suzanne Flynn gave the library a scolding that now seems prophetic. 

Flynn, who then was Multnomah County’s auditor, issued a report chastising the library for expanding without knowing whether its funding would grow with it.

In the boom years of the late 1990s, the library grew at a prodigious rate—costs jumped 64 percent between 1997 and 2001—and then had to cut back when the economy declined. 

The result? Monday closures and staff layoffs in 2003.

The audit warned that the county should have seen trouble coming. With the threat of compression always lurking, Flynn said the library should think twice about hiring new staff, or building any more branches.

“Although long-term funding appeared uncertain, the county continued to pursue expansion of the library,” Flynn wrote. “As a result of these increases, the county may have created a library system that is difficult to support in today’s economic environment and into the future.”

The library promised to be more careful. Then it kept growing.

In the past decade, while the county has made service cuts, the library budget has grown by more than $15 million to $58 million—adding two new branches.

Multnomah County hasn’t audited the library’s performance since 2004. That’s not unusual—the county normally audits its programs about once a decade. But it means the library is asking the voters for a budget hike without a recent full audit or any detailed county appraisal of its performance. 

In 2005, the year after its audit, the system endured a public embarrassment. A police officer uncovered hundreds of stolen CDs and DVDs in the home of a patron who had simply walked out the front door of the Central Library—because the security gates had been turned off by employees who found false alarms annoying. 

Being a Multnomah County librarian remains a coveted gig. The starting salary for a librarian here is $51,000. (The median starting salary for an American librarian is $37,000.) Most library staffers, who don’t have master’s degrees, make less. 

They’re unionized with American Federation of State, County and Municipal Employees Local 88, and protect their jobs fiercely. When the library started a teen intern program in 2006, the union stewards forced it to stop almost immediately, saying it was a way for the library to keep from paying full wages and benefits. (Those benefits are another big library cost—$20 per county resident, far exceeding the national average. Librarians, like most Oregon public employees, get Public Employee Retirement System packages.)

Shown these numbers, Oehlke says the library kept the expansion commitments it made to voters, until it couldn’t afford to anymore.

“My goodness,” she says, “people have been trying to get a more stable funding source for this library for 37 years. This isn’t like somebody woke up and said, ‘Oh, shoot! This sucks.’”

But some parts of the library are very new. The way people read has changed more in the past decade than it did in the previous century. And the library’s transition into the information age hasn’t always been smooth. 

While the library offers popular classes on how to use Kindles, it was slow to adapt to e-books. Last year, when King County Library in Seattle was already spending more than $1 million on e-books, Multnomah County Library’s annual budget for e-books was just $146,000. 

“It’s happening really fast,” Oehlke says. “We are iconic institutions. Culturally, it is not in our DNA to turn on a dime.”


The fight over the library is fundamentally about how we afford nice things—and what we choose not to afford instead. 

“More money for the library is good,” says Wilton, the longtime tax economist. “But less money for the Children’s Levy isn’t good. You have to decide what’s more important to you.”


Under Compression

Your property tax goes a lot of places. For example, if you own a house in Southeast Portland, it goes to six government agencies for 11 purposes (and that’s not counting the school taxes!). But it doesn’t go everywhere equally. Thanks to the economic phenomenon called “compression,” some taxing districts are squeezed—and local option levies are strangled.  That’s why the library wants to change its funding to a permanent taxing district. Here’s what happened in 2011-2012, in order from least to most compressed, by percentage. SOURCE: Tom Linhares, Multnomah County Tax Supervising and Conservation Commission

Port of Portland
Taxes expected: $9.9 million
Lost to compression: $162,223


Metro 
Taxes expected: $12.3 million
Lost to compression: $223,065


East Multnomah Soil and Water Conservation District
Taxes expected: $4 million
Lost to compression: $146,205


Multnomah County
Taxes expected: $249.9 million
Lost to compression: $9.8 million


City of Portland Permanent Rate
Taxes expected: $211.8 million
Lost to compression: $10.3 million


Portland Urban Renewal Special Levy
Taxes expected: $14.9 million 
Lost to compression: $736,226


Portland Fire and Police Disability and Retirement Fund Levy
Taxes expected: $114.2 million
Lost to compression: $5.6 million


Portland Urban Renewal Division of Tax
Taxes expected: $106.4 million
Lost to compression: $9.7 million


Library Levy
Taxes expected: $51.7 million
Lost to compression: $16.8 million


Historical Society Levy
Taxes expected: $2.9 million
Lost to compression: $954,716


Portland Children’s Levy
Taxes expected: $18.8 million
Lost to compression: $7.6 million
 
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