Naito proposes routing Gresham funds

Naito proposes routing Gresham funds to center

$4 million - Commissioner would pay for a mental health center with tax revenue
Friday, September 14, 2007
ROBIN FRANZEN The Oregonian Staff

GRESHAM -- Multnomah County should phase out business-income tax revenues it now shares with Gresham and use the money to help pay for a mental health crisis triage center, county Commissioner Lisa Naito has proposed in a self-described "provocative" memo to her board colleagues.

Naito said she is trying to spark discussion about funding priorities and the tax's future.

"As the fourth-largest city in the state of Oregon and as a jurisdiction that is prospering in terms of population, commerce and municipal service provision, the city of Gresham is more than ready to stand on its own," Naito wrote in her Sept. 7 overture. It shouldn't get a county subsidy, she said, "particularly while the county is not able to financially support its own vital services."

Gresham Mayor Shane Bemis and Multnomah County Commissioner Lonnie Roberts, who represents east county, oppose the idea, which would take a giant bite out of the city's budget.

Gresham's share of the tax this year is about $4 million -- or 10 percent of the city's general fund. Most of that goes toward police and fire services, and its potential loss -- brewing for more than a year -- is of urgent concern to local officials who see no easy, or immediate, way to replace it.

"I think it's a lack of understanding on her part," Bemis said. "That's huge money. . . . It's one thing to say we're the fourth-largest city in the state. It's another thing to say that we have one of the lowest tax rates in the state, with most of the region's problems right here."

Gresham not only faces growing problems with poverty and gangs but has had to raise fees to maintain basic services. The city will even consider asking voters to approve a public safety levy, Bemis said, even if the county continues to share the money.

In turmoil with their own budget troubles, county officials notified Gresham and neighboring Wood Village, Fairview and Troutdale in June 2006 that they planned to end a 30-year revenue-sharing agreement with the cities in June 2008, prompting alarm among east county leaders. Jointly, those cities received $5.9 million in 2006-07, according to the county.

The tax is 1.45 percent of a business's net income, with 0.15 percent distributed to east county cities based on population and an assessed-value formula.

Since then, intense discussions about the tax's future, and a county budget office study of the issue commissioned by county Chairman Ted Wheeler, have unfolded, with the culmination of months of crunching and haggling anticipated to hit the board later this month.

Naito, beyond her mental-health memo, also has introduced resolutions scheduled for the Sept. 20 meeting that seek to maintain tax revenues for the three smaller cities. On Sept. 27, Roberts hopes to present his own resolution that would preserve tax-sharing for all four east county jurisdictions and call for a more site-specific analysis of where taxes are generated, his chief of staff Tom Mack said Thursday.

A draft of the county budget office study recommends continuing the current tax-sharing arrangement for at least one year, so additional negotiations can occur. Controversially, it also concludes that east county cities receive about $2.8 million in taxes that are actually generated elsewhere in the county -- a point that Roberts and others dispute.

Naito acknowledged Thursday the provocative nature of her proposal, noting she met with Bemis and understood that diverting Gresham's portion to the center could seriously affect Gresham's public safety.

"It's something to discuss," she said, noting any phase-out might require several years.

At the same time, Naito said she didn't want the county's critical need for a 16-bed mental health triage center -- with an estimated yearly operating cost of $2.8 million -- ignored.

"Lives hang in the balance," she said.

Robin Franzen: 503-294-5943; robinfranzen@news.oregonian.com. Catherine Trevison of The Oregonian staff contributed to this report.