BOARD OF COMMISSIONERS'
June 28, 2006
Harris Hall Main Floor
Commissioner Bill Dwyer presided with Commissioner Bobby Green, Sr., Anna Morrison, Peter Sorenson, and Faye Stewart present.† County Administrator Bill Van Vactor, County Counsel† Teresa Wilson and Recording Secretary Melissa Zimmer were also present.
14. PUBLIC HEARINGS
a. PUBLIC HEARING/Income Tax Charter Amendment (NBA & PM 6/14/06).
Jim Johnson gave a presentation on the Income Tax Charter Amendment. (Copy in file.)
Van Vactor reported that they are close to the final deadline in getting the proposals into the voterís pamphlet.† He noted over the past few weeks citizens have come to the Board under Public Comment to consider different amendments into the ordinance.† He indicated a lot of people have done a lot of work on options and alternatives.† He thought people would make suggestions but due to the time constraints and staff limitations, he needed final direction from the Board in what they need to do to get ready.† He commented that it wasnít feasible to keep working on alternatives and new changes.† He added with regard to the income tax that it is an ordinance and the Board would retain authority to amend it.† He said if the income tax is adopted, it would be new to Lane County.
Wilson said this is an income tax limitation that limits the Boardís authority to increase the charter above the 1.5 percent of net income.† She added if the Board ever were to consider an increase above that, the voters would have to approve it.† She indicated it is dedicated for public safety, it contains property tax relief and sets up a rainy day reserve.
With regard to the ordinance, Wilson stated it has three components of tax:† personal income tax on residences, an income tax on non-residents and an income tax on business income.† She reported that all three of the taxes are set at the same rate.† She explained that the personal income tax on residents allows for residents who file singly to take a deduction of $2,500, or for residents who file jointly a deduction of $5,000.† She said it would be one percent of County taxable income.† She explained that County taxable income is defined to be Oregon Taxable Income, line 28 of Form 20.† She said Oregon Taxable Income is lower than federal income taxable income.† She stated it is a major exemption for residents who file a joint return and a combined adjusted federally gross income of $20,000 or less is exempt.† She indicated there are credits allowed.† She noted one credit is for paid property taxes.† She explained that is the methodology by which this income tax ordinance provides property tax relief.† She said if they pay income tax, they will be allowed a credit of about 75 percent of the property tax that is paid to Lane County for Lane County operations.† She said it would vary for each individual.
Wilson explained that the income tax ordinance requires withholding and payment of estimated taxes.† She said most businesses that use a computer payroll function have the ability to handle that type of withholding.
With regard to non-resident income, Wilson indicated the effort is to tax the income activity that occurs in Lane County by a non-resident.† She said the non- resident will have the same type of deductions and credits that a resident has.†† She said for the personal income of resident and non-resident, a credit is allowed for each for business income tax.† She explained that a business income tax is designed to tax the business activity in Lane County.† She said in taxing business income, it is the net income.
Wilson explained the general administration of the ordinance handles setting up a tax administrator, and adopting administrative rules and payment dates for returns.† She said they have tried to keep them consistent with the same dates as state returns.
Wilson recalled that last week the Board of Commissioners asked for the development of three options.† She noted on the back of the ordinances, the options are explained.† She indicated Option 3 is renter relief option that would allow a credit for renters of $30 for each personal resident subject to property tax.† She said Option 4 provides for a graduated income tax,.† She noted instead of one percent of income, if the County taxable income is $20,000 or less, it is half a percent.† She noted Option 5 changes the deductions.
Dave Garnick, Budget and Financial Planner, explained Option 1 (yellow sheet) is a low income exemption only.† He noted they have the task force recommendation of $24.53 million and additional $2.5 million for prevention and jail beds.† He indicated as a result of how they modified the property tax relief, they no longer will have to have any general fund transfer from the dedicated public safety fund to the general fund. He said they were able to subtract that out. He indicated that was why the new public safety program total is $23.13 million.† He added the proposal is to move Sheriffís Office, District Attorney and Youth Services over to the dedicated fund.† He said they would have to cover the portion of their budget currently covered by current property tax and discretionary revenue of $39.4 million.† He noted within the $39.4 million, public safety departments are receiving about $15 million of Secure Rural Schools funding.† He said since the Board is dedicating 100 percent of the general fund of Secure Rural Schools funding to public safety, the $5.5 million brings the total to $20 million. He noted the total public safety expense they need to cover is $68 million.† He said under the first scenario under the base ordinance it would take about 1.54 percent on personal and business income to generate the $75 million needed to cover the expenses.
Jim Gangle Assessment and Taxation, discussed the personal resident example. (Copy in file.)
Garnick explained Option 3 (green sheet) adds a renter relief option of $30 per residential unit. He noted Option 4 did not have the low income or renter tax credit but had a new concept, and a graduated tax rate that states instead of the one percent full rate, it is a half a percent from zero to $20,000 and above $20,000 is the full one percent.† He added the cost to do this option would be about $8.6 million.† He said that raises the upper rate to 1.66 percent†† He stated that Option 5 would cost about $12.9 million and drive the rate to 1.75 percent and 1.3 percent on the low end.† He said Option 6 brings back the graduated tax and builds in additional renter tax credit.† He noted those combined costs are $8.7 million with the upper rate at 1.66 percent and lower rate at 1.21 percent.
Commissioner Dwyer opened the Public Hearing.
Martha Brooks, Beaverton, addressed the Board on the critical issues of prevention and funding for law enforcement.† She said that Fight Crime Invest in Kids is an organization of over 125 police chiefs, sheriff, police chiefs and victims of violence dedicated to preventing crime by investing in proven programs that get kids started on the right track in life.† She said they are part of a national organization of over 3,000 law enforcement members.† She said the Board sees prevention as a part of public safety and accepting the challenge of financing the proven beneficial programs. She said Healthy Start improves parenting and prevents child abuse and neglect and reduces crime.† She indicated the savings to taxpayers for those types of programs is four dollars for every dollar spent.
Jeff Miller, Chair, Eugene Chamber of Commerce, said they believe there is direct correlation between the Countyís ability to provide a functioning public safety system and ability to promote responsible economic development, business success and community quality of life.† He said the Chamber is concerned about Lane County providing a public safety system that meets the needs of all Lane County residents.† He said it needs to be the top priority.† He stated the Chamber came to the conclusion that the Board canít wait.† He commented while the income tax is not a perfect solution, it is more fair and equitable than other taxes they considered.† He said the Board has the authority to enact a tax.† He said they have to make difficult decisions.† He said the public safety system in Lane County is in dire straits.† He asked the Board to fix the problem by enacting the tax.† He said the Chamber knows this is not a pleasant course of action and it could be an unpopular decision, but not exercising their authority could send a mixed message to the public regarding the severity of the problem.† He said if they enact the income tax, they will insist on a built-in safeguard to ensure limitation and accountability on how the tax revenues will be used.† He said their support is contingent on the Boardís commitment to spend the money strictly on the public safety system and under no circumstances use the revenue to backfill funding needs and other county services.† He asked for them to send a charter amendment in November that would cap the rate of the tax dedicated to public safety and offer property tax relief.
Mike Tailoe, Junction City, was against the income tax.† He said it is unnecessarily complicated.† He said they need to do something that is more reasonable.
Curtiss Greer, Springfield, commented that the meth problem the tax is based on is wrong.† He said until such time they institute a program that has been proven and works to stop the meth problem, he couldnít back anything.
Arturo Zamudio, Creswell, stated he is a recovering addict.† He said things are getting worse in Lane County.
Ellen Coleman, Junction City, reported that last year her son was found in an alley dead.† She said that crime victims from the District Attorneyís office helped her.
Lloyd Dolby, Eugene, thinks the concern in the community is high that something needs to be done.† He said no one is helping with the problem.† He commented that scenarios are complicated to access help in a short amount of time.† He thought they should minimize the impact on lower income people.
Jim Baker, Finn Rock, supports the ordinance.† He said the rural area needs effective police protection.† He said they have a surplus of thieves.† He didnít think they should cut property taxes.† He commented that 33 cents per thousand wouldnít provide much in services.† He said he pays less in taxes than his parents did.
Nancy Fadeley, League of Women Voters, Eugene, supports the efforts of the Board to provide additional funding for public safety by means of business and personal income taxes.† She said they believe there is a public safety crisis that must be addressed.† She stated the League supports a balanced approach focusing on drugs and alcohol and supports expenditures for treatment as well as law enforcement.† She said the League wanted to see an assurance that the proportion of funding for prevention and treatment will not be decreased should there be increased pressure for spending on law enforcement and incarceration.† She said the League favors a tax system that is equitable, adequate, stable, easy to administer and as simple as possible.† She added it should be based on the ability to pay and provide for the broad sharing of the tax burden.
Karen Reid, Eugene, disputed whether a local income tax is an alternative.† She thought it was punitive.† She commented that Oregon has high state taxes and thought a tax could hurt the economic growth in Lane County.† She noted Lane County would be the only county with a local income tax.† She thought a sales tax on food would be better.† She said a sales tax is painless and wouldnít affect people who eat food.
James Martin, Eugene, stated there is a need for programs for youth and adults in the community. He said that programs are important and hoped the Board would provide money for them.
Wanda Simmons, Eugene, said she would vote for an income tax but had questions. She asked how much it would cost to collect the income tax. She asked if this money would keep criminals in jail.† She hoped the Board would be judicious and careful.
Gary Remillard, Eugene, was against the income tax.† He said this tax is involuntary and invites corruption.† He said it doesnít support property taxes.
Charles Biggs, Eugene, was in opposition because there is no sunset and no assurance it is fair and balanced.† He suggested limiting FTE and retooling jobs with technology and outsourcing services.† He noted the downtown area of Eugene is business and has the highest crimes.† He stated there are more breaks for businesses than residential. He said this tax was hard to sell as being fair.
Jim Hale, Eugene, stated there is a crisis in Lane County and thought the Board was heading in the right direction.† He said that 1.5 percent doesnít stand the test.† He thought it needed to be a higher tax rate.† He didnít think they had a measure that was progressive enough.† He recommended an Option 3, $5,000 and $15,000 deduction and renter income tax relief, doubling the fee to $60 and increasing the rate to possibly 2.25 percent so they are not condemned in the future for not thinking about these things.
Jim Welsh, Elmira, stated he was burglarized and it was connected to drug addiction and the meth problem.† He stated that people donít understand what Lane Countyís general purpose government does.† He supported sending the charter amendment to the voters and the authority to support the tax increase as soon as they can.
There being no one else signed up to speak, Commission Dwyer closed the Public Hearing.
Green thought this represented one of the better proposals around the income necessary to address their critical deficit.† He said it provides enough for the public to have the reassurance that they wouldnít make a move unless they had polled the public around the charter amendment.† He said they have to encourage people to support this.† He said he hadnít heard anyone disagree with the problem.† He didnít know if they could craft something that could meet everyoneís needs.†† He was in support of how it stands.
Van Vactor explained that with the base ordinance, the Board has had their public hearing 13 days apart.† With regard to the options, he explained if the Board wanted to adopt the options, they would have to go to July 10.† He said they could send the charter amendment to the voters at any time up until July 10.†
Sorenson asked about Section 38 where it states that the rate may not exceed 1.5 percent of net income.† He said a number of the scenarios were exceeding that number.
Van Vactor said it would be up to the elected officials to gauge voters and the importance of the deductions and exemptions.† He said if they stayed with the base ordinance, they would have little flexibility with tweaking the ordinance in the future with deductions or exemptions.† He said it would remain a broadly applied tax at a low rate and would have the consequence that if they make a penny less than $20,000 the tax wouldnít have to be paid, but if it was a penny more than $20,000, the tax would have to be paid.† He stated these are just forecasts.
Dwyer commented there is no limit to what they could do under the current law.† He thought it might require them to have a higher rate in order to give them the flexibility to respond to the other options that they donít currently have.† He said they have to think wisely about how and what they are going to implement.† He said that 1.5 percent was not enough.† He said they would have to raise the cap.
Morrison said they are at 1.54 percent.† She said they need to focus on a number because they would lose Secure Rural Schools in the future.† She said they are going to have to start dealing with some of the issues and the public will have to realize it.† She asked if they raised the cap to 2 percent, it doesnít mean they would implement the full 2 percent.† She said when Secure Rural Schools goes away, they could implement the difference to cover the loss.† She wasnít sure that 1.5 percent would cover what was actually needed.† She liked the simplicity of Option 1.† She though it would be less confusing.
Stewart shared the concerns about the charter amendment that the 1.5 percent is not a high enough rate.† He said it limits the tax rate and takes the vote of the people to increase it.† He stated it dedicates funds to public safety.† He wanted a public safety reserve.† He thought the problem needed to be fixed by the people who live in Lane County.† He thought this was a good proposal.
Dwyer didnít like the reference to a rainy day fund but liked the charter amendment.† He said they are changing the way they tax people in Lane County.† He said income tax fluctuates more than property tax.† He thought they needed to limit the rate and dedicate it for public safety.† He said they need to structure the reserve fund in a way the people could understand it.
Sorenson wanted to call it a special fund and reserve instead of a rainy day fund.
Wilson said they could eliminate the term rainy day.
Van Vactor said the way to get to the right number is to take the options for the income tax:† Options 3, 4 and 5 and discuss which ones they like.
Green asked what action they needed for the ordinance
Van Vactor stated they would be coming back on July 10 with the written ordinance.
Wilson explained for the charter amendment., the drop dead date is on July 10.† She said for the ordinance, if they had a desire to have the ordinance reflected in the ballot title of the charter amendment, they have to take action on the ordinance.† She said the ordinance rate will fluctuate depending on which options they choose.
Wilson noted that currently the rate is at one percent.† She said if they were to choose to pick another option, under the present estimates for effective date, they would want to increase the income tax rate to 1.3 percent.
Harcleroad thought the Board was at Option 5.†† He said the only change he heard was from Hale who said to go from $30 to $60 on the renter relief.† He said they need to decide if they are going to increase the deductions from $2500 to $7500 and unmarried $15,000, as that would drive the rate.† He thought that was where the testimony was.
Stewart wanted Option 5 but wanted to add renter relief.
Wilson said they would combine Option 3 and Option 5.† She indicated they have the specific ordinance language that needs to be added and subtracted from the ordinance.†
Morrison thought if they added renterís credit that it would add to the tax revenue that is levied and it would have an impact on the rate.
Stewart was concerned about low wage earners.
Wilson said they could combine Options 3 and 5 at a language level but not until July 10.
Dwyer wanted to change "may" to "shall."† He wanted to see renters credit.† He wasnít with the charter amendment yet.
Green thought if they went to 2 percent it could cover the administrative costs.† He wanted to put in 2 percent and enact the ordinance so people know what they are voting on.† He wanted to be clear with the public.†
Dwyer stated they didnít have to limit the tax.† He thought they needed to enact an ordinance and make it effective in January.† He said they could limit the tax and it would be dedicated in the charter amendment.†
Van Vactor said they will change "may" to "shall" and strike "rainy day" and have a special reserve.
Morrison wanted to have a special public safety dedicated reserve.
Wilson said the concept is that the money has to go to a special dedicated fund.† She suggested calling it a special dedicated fund and reserve.
Van Vactor recalled the limit would be put at 2 percent.† He asked if the Board wanted all of the options in the ordinance.† He said the Board wanted the salmon colored sheet plus renterís relief.
Morrison requested that when they return on July 10 with the salmon color sheet with the renter relief, she wanted the correct figures to reflect what the rate would be with no Secure Rural Schools.
Van Vactor added that it would raise the rate in the income tax to 1.3 percent.† He stated that the change in the rate of the income tax from 1 percent to 1.3 percent might be a substantive change.† He said they couldnít enact it on July 10, but they could on July 12.
Wilson stated in Lane Code 4.521(1) the tax rate would be 1.33 percent, it would be 1.33 percent in Lane Code 4.531(1) and in Lane Code 4.541(1).† She re-read the figure and said the figure should be 1.4 for the Lane Code Sections.† She said they have read the language changes.† She said the Board could adopt the language changes and not change the ordinance rate, do a conditional enactment on July 10 and then direct immediately that staff come back with an amended ordinance to fix the rate problem that the language causes.† She indicated that was a choice.† She added that would start the 90 day clock running on the referral and that a second ordinance, Ordinance No. 2-06, is to move the income tax ordinance rate to 1.4 percent.† She stated that if the Board doesnít think a conditional enactment is where they want to go, they could do the reading on the amended rate and an adoption on July 12.
b. SEVENTH READING AND PUBLIC HEARING/Ordinance No. 1-06/In the Matter of Amending Chapter 4 of Lane Code to Add Provisions for a Lane County Public Safety Income Tax, to Adopt Administration and Collection Provisions, To Renumber Differential Tax Provisions, and to Set an Effective Date (LC 4.500 through 4.571) (NBA & PM 1/4/06,1/11/06, 5/1/706, 5/30/06 & 6/14/06).
MOTION: to approve an Eighth Reading and Deliberation for July 10, 2007, with a possible Ninth Reading and Deliberation on July 12, 2007.
Green MOVED, Stewart SECONDED.
15. COUNTY COUNSEL
a. ORDER 06-6-28-10/In the Matter of Referring to Election the Income Tax Limitation Charter Amendment, and Directing that It be Placed in the Voters' Pamphlet.†
16. COMMISSIONERS' ANNOUNCEMENTS
17. CORRESPONDENCE TO THE BOARD
18. OTHER BUSINESS
Green Creek Bridge
Stewart indicated that he reviewed the tapes.† He was under the impression that when the neighbors left, the County would pay for a bridge.† He noted that Green made comments to the fact that this would be a one-time emergency fix and they have County staff and services they could provide to do the job.† Stewart said when the neighbors left, the Board had a motion on the table to keep the bridge posted at three tons and expedite a flat car process to get the bridge replaced.† He said there was no talk about the assessment.† He said the assessment came at the following meeting where there was no one present.† He believed that the neighbors left the meeting with the expectation that the County would pay.† He said in the future they have to do a better job if they are going to assess people and make it clear at that time when they are making comments.† He was in support of not assessing the neighbors with the bridge project.
Green asked if there was a more strict interpretation of the statute where they donít have to spend money but could provide staffing and analysis.† He commented that would be the same as what the state would do.
Stewart believed the people left with the expectation, but he could be wrong. He said in the future he would be more comfortable if the Board made it clear that there would be a cost to the situation where the neighbors would have to pay.
Dwyer said that was why they gave direction; to develop a check list so they wonít have a misunderstanding in the future.† He asked what action the Board needed to take to waive the assessments.
Van Vactor indicated they needed to check with Public Works.† He thought the Board had already executed an order levying the assessments.
Dwyer stated that they hadnít done it yet.
Van Vactor said they may need to come back repealing the prior order.† He said they could put it on the agenda for July 12 if they need to take action.
There being no further business, Commissioner Dwyer adjourned the meeting at 8:30 p.m.