The City of Salem discovered Tuesday that a required sentence was missing from the ballot title describing the November 2022 Community Improvement Bond appearing in the Marion County voters pamphlet. The required statement is intended to explain that the property taxes for general obligation bonds are not subject property tax limitations from the 1990s. The impact of bond passage on voters’ property taxes was included in the ballot measure and explanatory statement, and in the City’s informational materials provided to the public – in simple terms. The error, neglecting to include the sentence, was made in filing the measure with Marion County in late August 2022. The City is taking steps to correct for this error through a judicial process, set up for these circumstances. Cities have been successful in correcting this type of error through the judicial process, including one city on a measure put forward for the November 2022 election.
“We believe we can resolve this quickly through the judicial process available to us,” said Mayor Chris Hoy. “By taking care of this as quickly as possible, we will avoid any potential delay in issuing the bonds and making the community investments in safety and livability that the voters approved in November. Salem voters have spoken. We intend to honor the commitment we made to our community and to the broad coalition that came together in support of the measure.”
The language, required by ORS 250.037, that was missing from the City’s filing reads: “If the bonds are approved, they will be payable from taxes on property or property ownership that are not subject to the limits of sections 11 and 11b, Article XI of the Oregon Constitution.” The missing sentence was included in public notice of the ballot title, published in August in the Statesman Journal. This statutorily required notice was the only piece missing from the ballot. The projected effect on the taxpayer, that “the measure is not expected to increase Salem’s bond tax rate above the current rate of $1.20/$1,000 of assessed value thanks to payments for existing bonds decreasing in the future” was in the explanatory statement included in the ballot. The impact to voters was included in all available materials.
“You trust us to do important work and do it well and clearly we did not do that here,” said Keith Stahley, Salem’s City Manager. “We understand the gravity of this error, we will learn from this mistake and will adjust our processes and systems to prevent it from occurring in the future. Fortunately, there is a judicial remedy and we will be pursuing it as vigorously and quickly as we can. “
Next, the City will move forward with both the judicial process to validate the voters’ support for the Community Improvement Bond, and the work and required public notices to make the bond funds available when this issue is resolved.
“Unfortunately, the City will be unable to issue bonds until this error is addressed,” explained Dan Atchison, Salem’s City Attorney. “As early as Friday, the City will file a “validation” action in Marion County Circuit Court. This will ask the Court to determine that, despite the omission, the bond measure legally authorized the City to issue the bonds, because the measure and explanatory statement gave voters notice of the impact of passage of the measure would have on property taxes. Courts in other, similar cases, have determined that bonds could be issued. We deeply regret the error occurred and are working diligently to ensure the matter has no impact on the City’s ability to issue the bonds in response to voters’ overwhelming approval of the measure.”
Salem’s safety and livability measure, passed by voters in November 2022, will fund community-wide investments in streets, sidewalks, parks, fire trucks and equipment, two new fire stations to improve responses times, affordable housing, purchase of sites for affordable housing and branch libraries, cybersecurity for City operations, and Civic Center seismic improvements. Because several previous bond measures will be retired and removed from the tax rolls over the next decade, the $300 million in safety and livability bond projects can be funded without increasing tax rates.
More about the missing sentence. In the 1990s, Measures 5 and 50 capped the rate of property tax revenue growth available to fund local governments. Local property tax funded bond measures for capital improvement programs are brought before voters through a ballot measure at an election. By design, these measures are exempted from property tax limitations. After these measures were approved, the Oregon State Legislature added to the required language voters are offered to consider in the official ballot measure summary statement, to ensure voters are aware of the change in property tax rate for this purpose, when determining whether to support a locally funded bond measure. The language, required by ORS 250.037, that was missing from the City’s filing with Marion County Elections reads: “If the bonds are approved, they will be payable from taxes on property or property ownership that are not subject to the limits of sections 11 and 11b, Article XI of the Oregon Constitution.”
