Like many, I was appalled at the moral turpitude evidenced by Fortune 500 companies and high net worth institutions applying for and securing millions of federal stimulus dollars intended to shore up small business operations during the pandemic. The amount of pork-barrel loopholes in federal stimulus funding guidelines sans important fiscal oversight has resulted in many applicants “gaming” the system. Only swift, scorching public backlash shamed these entities into returning their “award” money.
The April announcement that the city of Corvallis had applied for and secured $7.3 million in stimulus funding authorized by the federal government placed Corvallis in the same shameful Fortune 500 ranks. Here’s why. The money was part of a $25 billion funding carve-out in the federal CARES stimulus funding package to help keep public transit systems operating during pandemic conditions. Communities typically secure funding for city bus services primarily from ridership fees, property taxes, and on-going annual government grants. This is true for all Oregon communities save Corvallis.
In 2011, the city transitioned transit service revenue generation away from property taxes and ridership fees to monthly utility fees (sewer, water, storm water, etc.) that we all pay for regardless of whether we use or have ever used the city bus service. At the time it was argued that the monthly utility fees would provide financial stability for the valued service to offset unanticipated economic events that could affect service operations (like pandemics). Indeed it worked. Corvallis remains the only city in Oregon that pays for its public transit services through monthly utility fee payments, pandemic or not.
About 50% of the city transit revenue is generated from federal government transportation grants unaffected by the pandemic. An additional 20% to 38% (according to city records) is generated annually from monthly utility payments. The city’s total transit service budget for 2018-2019 was $3 million. In 2019-2020 it was $5 million. With the added $7.3 million windfall, the proposed 2020-2021 transit budget is now a whopping $13.2 million with utility fees continuing at current levels.
Like the Fortune 500 companies, Corvallis applied for and secured millions of federal stimulus dollars they knew they didn’t need to respond to the pandemic, even though the federal government allowed for this. The application filed by the city details a $200,000 allocation to buy buses serving the handicapped, with the remainder $7.1 million listed in a single line item for “operating assistance." Worse, if the city tries to return all or a portion of the windfall funds, they risk being penalized in future federal grant requests.
There are two actions the city must take to regain moral leadership. First, city utility fees for transit services should be suspended for several years. This is particularly important as 30% of our city’s population (even before pandemic unemployment rates get counted) lives at poverty level (OSU students account for only 3% of that). Of the 240 cities in Oregon, only 22 (including Corvallis) have a poverty rate of 25% or higher. Of the 22 cities, all but Corvallis have populations of less than 7,000.
Second, $3 million of the windfall funds should be used to establish free community-wide COVID 19 testing. As we all pay for the public transit system, we all are affected by the potential for the spread of the virus via the use of public transportation — especially with OSU’s plans to at least partially reopen the campus in the fall. Plus, at least half of those using the city’s “free” city bus services are OSU students and employees).
This last proposed correction is particularly important. Oregon ranks second to last in virus testing in the nation in large part due to a dramatic lack of test kits promised by Governor Kate Brown’s office back in April but never received. Instead, the governor delayed the purchase of test kits, then secured only half of what was promised. This has resulted in a significant, shameful, and undocumented denial of virus testing for many in Corvallis who have presented with symptoms.
We can’t rely on aggregated moral leadership from the federal level right now, so it is up to our state and local leaders to provide that balance. It’s easy to exhibit moral leadership when the going is good, but it really only counts when the going gets tough!
Catherine M. Mater of Corvallis is the former chair of the Oregon Transportation Commission.
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