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Mr. Carlson reminded the council that the City of Eugene was heavily dependent on property taxes <br />for its operating revenues. Property taxes fund about 63.5 percent of the City's operating <br />revenues. He noted that the City had not yet reached the property tax cap created by Ballot <br />Measure 5 and could ask the voters to levy approximately $38 million in local property taxes. <br /> <br />Mr. Carlson noted that Ballot Measure 47/50 had set the permanent property tax rate at $7 per <br />$1,000; that could not be changed. The only change in revenue generated from that rate were <br />changes in assessed value, which the measure also limited to a maximum increase of three percent <br />annually. If a recession caused market values to fall below the assessed value, the assessed value <br />would be decreased to match the market value. The property tax rate would then be applied to <br />this new, lower assessed value, resulting in lower revenues. Property tax revenues also increase <br />due to exception values based on new construction and lot line adjustments. Exception values <br />have resulted in increased property tax revenue ranging from 2.2 percent to 2.8 percent over the <br />last several years. Mr. Carlson suggested that in a recession the City could expect very little <br />property tax revenue increase due to exception value as new construction slowed. The combined <br />effect of the exception value and the changes in assessed value totaled about six percent annually, <br />which was about what the City realized under the pre-Ballot Measure 47/50 system. He said that a <br />recession would have a negative impact on those revenues. <br /> <br />Mr. Carlson noted that general obligation bond debt approved by the voters was outside the <br />limitations established by the property tax limitation ballot measures. <br /> <br />Mr. Carlson called attention to the items included in the meeting agenda packet to provide context <br />for the discussion: 1) Attachment A, an excerpt from the City Council Goals related to the goal of <br />Fair, Stable, and Adequate Financial Resources; 2) Attachment B, a chart entitled Nonproperty <br />Tax Revenue Sources, Overview of Individual Sources; and 3) Attachment C, a memorandum <br />dated September 28, 2001, to the council and mayor from Patricia Boyle, Financial Analyst, <br />entitled Past Attempts to Develop Sustainable Revenue Sources. He provided a brief overview of <br />the memorandum from Ms. Boyle. <br /> <br />Mr. Carlson invited questions. <br /> <br />Mr. Meisner said it was hard for him to separate the question of a specific alternative revenue <br />source from the City's funding needs. He wanted to make a decision that was based on knowledge <br />of the City's multi-year needs. He also wanted to see information as to what authority the City had <br />locally to adopt an offsetting tax to the property tax. For example, in return for passage of a <br />personal and business tax, the City would no longer tax owner-occupied houses. He asked if the <br />City could exempt a particular category of property from taxation. City Attorney Glenn Klein did <br />not believe the council could make such a choice; it could decide to under-levy across the board, <br />but could not exempt one category of property from taxation. He indicated he would do more <br />research if there was interest on the part of the council. Mr. Meisner reiterated his interest. <br /> <br /> MINUTES--Eugene City Council October 8, 2001 Page 3 <br /> Work Session <br /> <br /> <br />