The challenge to Washington County and the City of Tigard's 13-year-old system of assessing a fee on new development for its impact on our transportation system began in 1997, when Rogers Machinery of Tigard approached the City of Tigard with plans to remodel and expand.
In the normal course of development applications, the City applied a formula to their new square footage and came up with a TIF owed of $37,102. This decision came despite the fact that Rogers had already paid $40,000 toward street improvements made along his property.
Rogers appealed the tax to the County's Hearing Officer. When that appeal was denied, Rogers carried the case to County Circuit Court and eventually to the Oregon Court of Appeals. Rogers' attorneys raised constitutional rights issues, calling the TIF an unconstitutional "taking". Rogers was represented by Oregonians in Action, a statewide property rights organization.
The Oregon Court of Appeals said that TIF was constitutional, as it did not take real property and was non-discretionary, using a formula applied evenly, across all categories of property. Rogers petitioned the Oregon Supreme Court for review but was denied, prompting Rogers to appeal to the U.S. Supreme Court. By choosing not to hear the case, the U.S. Supreme Court let stand the Oregon Court of Appeals decision.
Approximately 72% of Washington County voters approved the Transportation Impact Fee (TIF) program in 1990. The measure was adopted as a tax on development and included an automatic escalator of 6% per year, unless the Board of County Commissioners takes an action.
The TIF program accounts for about 26% of the annual funds used to pay for capital projects and capacity improvements to local roadways. The county's fee raised $13.3 million in 2001.
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