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<br />- <br /> <br />- <br /> <br />e <br /> <br />II. PRESENTATION OF REVENUE SOURCE CHARACTERISTICS <br /> <br />Mr. Wong referred to flow charts illustrating tax evaluation criteria as they <br />were presented at the May 20 work session. The criteria are efficiency, capa- <br />city, stability, and political acceptability. He introduced Ron Chastain of <br />Chastain Economic Consulting. Mr. Chastain referred to the statistical study <br />prepared by his firm which lists potential revenue streams based on: 1) a <br />City tax on State personal income tax taxable balance, and 2) a City surtax on <br />State personal income tax. He said only the figures for 1983 are actual data; <br />those for remaining years are projections. <br /> <br />Mr. Chastain said the figures in Table 1 represent the adjusted gross income <br />(AGI) minus deductions; the result is the taxable balance to which tax rates <br />are applied. A one-percent tax on the taxable balance in 1983 would have <br />raised approximately $7.4 million in new revenue. The second column of Tables <br />1 and 2 shows the percent change (I/%CH"), the annual growth assumpti on. He <br />called these assumptions an educated guess. <br /> <br />The charts on the following pages of the study show the percentage ratio of <br />taxes owed to AGI, the distribution of Lane County returns by AGI, and the AGI <br />for Lane County in 1983. Mr. Chastain said that about half the tax returns <br />for Lane County are to wage-earners with an AGI of less than $13,000. The <br />graph on page 5 entitled "Adjusted Gross Income for lane County, 1983" shows <br />in visual form that the greatest revenues come from those citizens in the AGI <br />bracket $20,000 to $40,000. <br /> <br />Pages 7-9 show the estimated one-percent-tax revenue stream resulting from the <br />exemption of a certain amount of income from the AGI. Totals are included at <br />the bottom of the page. Excluding $1000 per return, the total revenue collec- <br />ted from Eugene residents would be about $9.8 million; excluding $2000 per <br />return, about $9.3 million; and excluding $3000 per return, about $8.7 million <br />would be collected. The three tables show that, with roughly 50 to 60 thou- <br />sand returns in Eugene, about one-half million dollars of revenue would be <br />lost for every $1000 of income not counted. <br /> <br />Mr. Miller asked Mr. Chastain what, in his opinion, would be a fair tax. <br />Mr. Chastain said he considered the surtax fair and easy to administer. He <br />added that a progressive AGI tax would exempt those with incomes below $5000. <br />Either tax could be built with a shelter for low-income people. It would also <br />be possible not to tax capital gains. <br /> <br />Mr. Chastain said the personal income tax was much broader than the payroll <br />tax, since the former taxed all incomes. He said his report included people <br />who live outside of Eugene but who work here. A future income tax could <br />include non-residents who earn their living in Eugene. However, it would not <br />be able to include those who moved their businesses beyond the city limits. <br />Mr. Chastain invited the councilors to call him if they had any further ques- <br />tions. <br /> <br />MINUTES--Eugene City Council Work Session <br /> <br />June 3, 1985 <br /> <br />Page 2 <br />