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Heritage tax off the table as governor helps look for funds
by: L.E. BASKOW, Happy Valley Elementary School students tour the “Oregon My Oregon” standing exhibit at the Oregon History Museum. Thousands of students visit the cash-strapped downtown Portland museum each year.

The cash-strapped Oregon Historical Society is taking a step back in time.

The 112-year-old nonprofit will put its campaign to create a local 'heritage tax district' on hold after the idea failed to win support from Portland Mayor Sam Adams and Gov. Ted Kulongoski, among others.

At the request of Portland city officials, Kulongoski convened a group to brainstorm new state funding ideas for the society, which operates the Oregon History Museum and research library in downtown Portland. The society's board voted unanimously April 17 to give state funding options another shot, says George Vogt, executive director. Those options include seeking $1.5 million from the Legislative Emergency Board, which meets in late May, and pursuing other possibilities.

The society's board has been laying the groundwork for a local taxing district after its state funding dwindled the past seven years. The 2007 Legislature enacted a law that enabled the formation of local taxing districts for history facilities. Such districts could raise property taxes, upon voter approval, much like library and soil and conservation districts.

The Oregon Historical Society, which expects its cash reserves to be exhausted by late 2011 or early 2012, had already retained political consultant Liz Kaufman and raised $130,000 for a heritage district ballot measure campaign, Vogt says.

But Adams and others feared a heritage taxation district on the ballot might confuse voters and make it harder to pass a planned arts funding measure, says Ty Kovatch, chief of staff to City Commissioner Randy Leonard. The Oregon Historical Society had discussed options for obtaining money from the arts measure. However, Vogt says that didn't appear to provide a solution soon enough to solve the society's financial crisis - nor did he foresee raising enough money from such a measure.

When the Oregon Historical Society started pursuing its own funding measure, 'that's when feathers got ruffled,' Kovatch says.

In response to interview requests, Adams spokesman Roy Kaufman instead released a brief written statement saying Adams prefers a state funding solution for the society and will continue working with the governor's office to pursue that.

The governor concurs. 'He does not support the local heritage district idea,' says Kulongoski spokeswoman Anna Richter Taylor. 'He does think we need to find a statewide funding solution.'

Oregon Historical Society leaders also would prefer state funding, which sustained the nonprofit with annual funding from 1899 to 2003. However, state funds were then cut off for four years. Kulongoski and the Legislature managed to restore state funding to $1.4 million a year in 2007-09, then it fell to $300,000 a year for the current 2009-11 budget, plus proceeds from sales of a new historical license plate.

Taylor says the license plate money should double state funding, adding another $300,000 a year. But the historical society budgeted $180,000 in license plate revenues this year, because it doesn't know how many plates will sell, says Sheri Neal, society finance manager.

'I don't think any which way we turn is a slam dunk,' Vogt says. But if the emergency board grants the $1.5 million request, that would be an important signal of the state's continued commitment, he says.

State Sen. Betsy Johnson, D-Scappoose, isn't holding her breath. She's a former member of the Oregon Historical Society board, as were both parents. And she's a member of the Legislative Emergency Board, often called the 'E Board.'

With the state looking at a potential budget shortfall in 2011-13 of up to $2.5 billion, there will be pressure to save the relatively small leftover funds for the next budget cycle, Johnson says. Money from the E Board 'becomes a less likely opportunity,' she says.

Even if the E Board provides some emergency money, that would be a short-term fix, Johnson says. Her earlier proposal - to designate the historical society and surrounding arts buildings as a cultural district eligible for state lottery funding set aside for parks - never got any traction in Salem, Johnson says.

It appears the heritage tax district drew new attention from city and state leaders to the historical society's precarious financial situation, Johnson says. She still likes the idea, noting that a poll showed the measure could pass.

But to be successful, a heritage taxing district would require the support of a majority of the Portland City Council. Adams is opposed, and Leonard, a 'history buff,' hasn't take a position on it and wants to see the renewed effort to garner state funding succeed, Kovatch says.

Johnson notes that other Portland cultural institutions, such as the Portland Art Museum, have had 'sinking spells' and been revived.

'I don't want this place to die on my watch,' she says.

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