School board considers tax exemption proposal for low income housing facility Hacienda

In a recent meeting of the Lake Oswego School District 7J Board, discussions centered around the financial implications of a tax exemption request from Hacienda, a low-income housing provider. The exemption, valued at approximately $120,000 annually, has raised questions about its impact on the school district's budget and local tax revenues.

During the meeting, it was noted that the school district would forgo about $50,000 in property tax revenues due to this exemption. However, officials emphasized that the overall financial burden on the district would be minimal, with the net effective tax rate increasing only slightly—by mere pennies on the dollar. The primary loss of income for the district would come from local option taxes, estimated at around $10,000 per year, which is relatively insignificant compared to the district's total budget.

The discussion highlighted the complexities surrounding tax exemptions for 501(c)(3) entities like Hacienda. Board members sought clarification on why certain portions of the property are not covered by the tax exemption, despite Hacienda's nonprofit status. It was explained that state laws allow for specific tax exemptions that require local jurisdiction decisions, particularly when the property serves low-income populations.

The board acknowledged that the tax exemption is just one component of a broader financing strategy that includes various funding sources, such as equity investments and grants, aimed at supporting low-income housing initiatives. This multifaceted approach is crucial for ensuring the sustainability of such housing projects.

As the board deliberates on the request, the implications of the tax exemption extend beyond immediate financial considerations, touching on broader issues of community support for affordable housing. The decision will ultimately fall to the city for ongoing renewals, indicating a long-term commitment to addressing housing needs in the area.

In conclusion, the meeting underscored the delicate balance between supporting low-income housing initiatives and managing the financial health of the school district. As discussions continue, stakeholders will need to weigh the benefits of such exemptions against their potential impact on local education funding.