BOARD OF COMMISSIONERS'
November 1, 2005
Lane Community College, Center for Meeting and Learning
4000 E. 30th Avenue, Bldg. 19, Room 104
Commissioner Anna Morrison presided with Commissioners Bill Dwyer, Bobby Green, Sr., Peter Sorenson and Faye Stewart present. Recording Secretary Melissa Zimmer was also present.
1. Task Force Report
Jim Johnson reviewed the Task Force Report. (Copy in file).
2. SECOND READING/Ordinance No. 5-05/In the Matter of Amending Chapter 4 of Lane Code to Add Provisions for a Lane County Sales Tax and Use Tax, to Dedicate the Revenues, to Adopt Administration and Collection Provisions, To Renumber Differential Tax Provisions, and to Set an Effective Date (LC 4.400 through 4.462).
3. SECOND READING/Ordinance No. 6-05/In the Matter of Amending Chapter 4 of Lane Code to Add Provisions for a Lane County Gross Receipts Tax, to Dedicate the Revenues, to Adopt Administration and Collection Provisions, To Renumber Differential Tax Provisions, and to Set an Effective Date (LC 4.500 through 4.563).
Terry Wilson, County Counsel, explained the two ordinances that had been crafted were generic forms of a sales tax and a gross receipts tax. She used the state of Washington as a general guide to put the taxes together. She said the premise on a sales tax is that it is the purchaser who pays the tax. With regard to the gross receipt tax, a business will pay a tax on the gross income of the business activity that occurs within the county. She added for a business there would be an apportionment of their income if they do business within and outside of the county. She commented that if either ordinance were to be adopted, there would be significant administrative rules to help guide the taxpayer in how to prepare a tax return.
Commissioner Morrison opened the Public Hearing.
Lindsey Haskell, Cottage Grove, encouraged the Board to go forward with a sales tax. He said the City Council of Cottage Grove passed a resolution in support. He noted there is a meth problem, and asked the Board to do something to solve the problem soon.
Sorenson asked if the task force was going to have a proposal for a sales tax and then a reduction in property tax. He asked Haskell about the recommendation he wanted.
Haskell responded that he was not in favor of a sales tax without a property tax roll back. He believed most of the members of the task force echoed that sentiment: a new tax would only be acceptable if replaced by one of the older taxes.
Carol Berg Caldwell, Pleasant Hill, commented that there was a need for incarceration measures. She said they need reliable money for crime prevention. She indicated that people recognize what is important. She said they must fund programs that work. She stated she appeared before the Public Safety Task Force and the Board to present a proposal to fund prevention programs. She said a dedicated prevention services fund built upon voluntarily donations would be an approach or taking a tax proposal to fund all of the public safety needs and include prevention programs. She suggested having a two percent tax rate instead of one percent.
Don Lance, Creswell, stated he is the Tax Director at Monaco Coach. He encouraged the Board to avoid a gross receipts tax. He said it would be a negative factor to increase new business into Lane County. He said the problem with a gross receipts tax is that it gets applied in different ways. He said a sales tax is spread across the board. He thought a corporate or individual income tax surcharge that was across the entire base would benefit public safety, as everyone would participate.
Craig Wanicheck, Eugene, said he works at Monaco. He commented that a gross receipt tax would have an economic impact. He thought they should look at business and individuals to fund public safety. He thought there should be a middle ground where corporations and individuals pay because they all benefit from public safety in Lane County. He thought having the gross receipts tax would be misguided. He encouraged the Board to look for other ways of funding. He indicated that the education of the public was needed. He added that there needed to be cross-jurisdictional cooperation.
Terry Connolly, Eugene Chamber of Commerce, Eugene, commented that they had not been educated about the ordinances and are forced to react to a new tax proposal. He said they surveyed their membership and a sales tax and a gross receipts tax are unpopular within their membership. He added there was a 69% disapproval of the sales tax and there was an 84% disapproval of a gross receipts tax. He noted the businesses wanted a solution that was broad-based. He said there was concern about it if it would make a difference for business development in Eugene or Lane County if the County is the only one in the state to have a sales tax or a gross receipts tax. He indicated that perception was a part of the concern of the businesses. He said if there were a role for education, they would want to help engage the business community. He hoped the Board would not go forward with this tax.
Green asked Connolly what source of revenue the chamber would support.
Connolly thought they would support an income tax surcharge. He thought they should have a broader discussion with the business community. He said there should be trade offs.
Morrison commented that even if they were to receive the reauthorization money, the County remains status quo regarding public safety. She asked the chamber membership to go through and prioritize the programs where they expend property tax dollars and see where they come out. She commented that the Secure Rural Schools Act would not be the total answer.
Dwyer thought they should revisit the surcharge on income tax, as that would be his preference. He thought if they provided more for prevention and build coalitions that were necessary, it would be the way to pass it.
Connolly said they heard from the business community that the two taxes that had been proposed will not be popular and are going to be opposed. He said if there is going to be revenue to come from somewhere, they have to engage in the conversation. He added that this would be part of a learning curve.
Sorenson was concerned where the money would be used in the public safety context. He asked if it was too much on one side or the other. He wanted the perspective of the business community.
Connolly said the concept of creating a public safety system that is removed from the general fund had merit. He said the challenge they face is unpopular taxes. He said there is more review that needs to be done.
Sorenson commented that he didnít vote to hold the hearing on the taxes. He asked about the timing issue and if the federal legislation fits into their recommendation that they roll this out over time.
Connolly indicated that they were concerned about timing as well. He said if a new tax is to be approved and if federal forest monies are not re-authorized, they have a financial crisis in Lane County. The publicís perception will be that they thought taxes were just raised to deal with a public problem. He thought from May to September 2006, they needed to find out what the financial landscape of Lane County would be.
Morrison indicated that in May it could be stated that there would be an adjustment made if the Secure Rural Schools Act comes in. She said they could put the information out that if they were successful with the re-authorization it would impact the amount levied.
Cynthia Kokis, Eugene, said she has no objection to paying her taxes. She objects to a retail sales tax because it is flat and hurts low income people. She was against corporations receiving refunds. She said they were asking a correction system to handle things that could be better handled elsewhere.
Bruce Pratt, Springfield, was concerned about a meth lab in one of his rental units. He said they need to re-instate the INET and rural patrols. He commented that if the Countyís economy doesnít thrive with new jobs and industry, the tax basis will decline and they will need to look for ways to cut spending. He said they need to increase funding so they could prosecute all misdemeanor crimes. He commented that whatever mechanism needs to fund public safety, needed to be done now.
Jim Welsh, Eugene Association of Realtors, indicated there are concerns about public safety in the community. He believed that public safety is an important segment of quality of life issues in a community where they want to live. He said they opposed a sales tax and gross receipts tax. He said they had not developed a solution on a tax they could support. He thought the best way to fund it would be a revenue that would come from property tax, timber sales revenue or from Secure Rural Schools. He thought long-term answers had to involve county, state and federal land use policies. He said they wanted to support the County in anything they do, but they couldnít support the two tax options. He said they are looking at this at the state level.
Morrison commented that one potential tax that was not considered was the real estate transfer tax. She said every time that had been discussed at the state and local level, there had been opposition.
Welsh didnít think a real estate transfer tax would be supported at this time.
Dwyer asked if real property was taxable.
Wilson explained that the sales tax is applied to the sale of personal property and doesnít apply to the sale of real property. She said that when a business calculates its gross income, in order to calculate how much tax would be paid on a gross receipts report, it is allowed to deduct from its gross income the amount from the sale of a fee interest in real estate and a real estate transaction will not be subject to a tax.
Jim Hale, Eugene, didnít like the two taxes presented. He liked an income tax, as it is progressive. He said the lower the income, the less is paid. He commented that a property tax is a regressive tax. He said the County needs to have rural patrols and there are buildings that need to be improved. He said they need to expand the jail to increase capacity. He recommended a three percent income tax as something that everyone could afford.
Sorenson asked why Hale would favor an income tax measure when the voters had already voted overwhelmingly against it.
Hale said they need to find a way to fix the problem and not wait until they receive money from the Secure Rural Schools Act.
Chris Pender, Eugene, said he smokes marijuana and wanted to be taxed. He commented that 15 million people smoke marijuana and by legalizing it they could get the money which is currently going to drug dealers.
Randy Prince, Eugene, supported full funding of prevention programs. He thought a plan for voluntary funding should be established. He said people donít realize how bad County funds had been shortchanged. He said it would eliminate tax limits. He thought they should take money from people who had sold real estate. He thought if a voluntarily approach was used, money could be used locally. He thought they should tax luxury items instead of necessities. He said they should challenge the realtors and the Chamber of Commerce to come up with new taxes and they would get better results than the tax measures they have.
Morrison thought people would really contribute very little in comparison to the amount of money they are trying to generate.
Sorenson didnít think voluntary funding of public services would work.
Prince said he would zero in on the services featured in the paper that werenít getting money. He said he would also zero in on the point of sale when people had money and find the places where people would be willing to put the money. He thought it would be a place to start. He added they could also tax alcohol and tobacco.
Dwyer doubted a voluntary program would work.
There being no one else signed up to speak, Commissioner Morrison recessed the meeting at 3:10 p.m.