It's "for the children," but is it legal?
It's time to get cracking on the ballot measures for the upcoming election. Let's start with what should be an easy one -- the proposed continuation of the City of Portland "children's initiative," under which property taxes are collected by the city and dedicated to programs for kids. Here's the actual language of the provision, Measure 26-94:
Pursuant to Section 7-112 of the Charter of the City of Portland, the Council shall levy for each of five successive years commencing with the fiscal year 2009-10, at the time taxes are levied for the payment of expenses of the City, a special tax at a rate of $0.4026 per thousand dollars of assessed value, on all property in the City of Portland not exempt from taxation. The proceeds from such levy shall be placed in a special fund to be designated as the Children’s Investment Fund. The money in this fund shall be expended only for purposes of cost effective, proven early childhood programs, child abuse prevention and intervention, programs targeted at foster children, and after school, summer and mentoring programs for children. No more than 5% of the fund may be spent for expenses associated with administering the fund. The fund shall be subject to annual audit. An Allocation Committee, composed of at least five members, shall make recommendations regarding the expenditure of funds from the Children’s Investment Fund to the Portland City Council. This local option levy is specifically authorized, and it shall not be counted as within the limitation provided in Sections 11 of Article XI of the Constitution of the State of Oregon. This levy shall, however, be subject to proportional reduction under Section 11(11)(c)(B)(I) of Article XI of the Constitution of the State of Oregon. This special tax hereby authorized shall be in addition to all other taxes that may be levied according to law.Measures like this one always amuse me greatly. The city wastes tons of dough on needless frills, then comes begging for an extra handout "for the children." Well, there doesn't seem to be any opposition serious enough to stop this at the ballot box, and there's no sense resisting the inevitable.
But I have just one question: Is this measure legal under state Ballot Measure 5?
Now, trust me, I have no special expertise about Measure 5, the property tax initiative passed by Oregon voters in 1990. But I do know that around the same time that Portland started its children's fund in 2002, the City of Eugene tried to do something quite similar, and the Eugene tax levy was held to have run afoul of Measure 5. The Oregon Supreme Court case on the issue, Urhausen v. City of Eugene, was decided on Aug. 31, 2006, and it is available here.
Under the court's ruling, most of the Eugene levy was classified as going to the "school system," and thus it was limited by Measure 5's specific limits on overall levels of property tax being used for "educational services." The special school tax went down in flames as a result, and there were lots of hard feelings about it.
I see that the Portland measure currently before the voters declares that "[t]his local option levy is specifically authorized, and it shall not be counted as within the limitation provided in Sections 11 of Article XI of the Constitution of the State of Oregon" -- that being Measure 50. Can the city override the state constitution that easily?
How is the Portland deal different from the Eugene deal? The Eugene tax was also passed by the city's voters, so that can't be a distinction. One key difference may be that a lot of the Portland money goes to private nonprofit organizationss, but still, a fair amount of it is spent on, or at least in, public schools. A spreadsheet showing last year's expenditures is here. At least some of that would appear to be "school system" money under Urhausen.
Anyway, I hope someone out there who understands the arcane worlds of school funding and Measure 50 can fill us all in.