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General Sales Tax <br /> <br /> · Previous attempts to pass a sales tax have failed statewide and locally <br /> · Despite exemptions for food and prescription medicine, such a tax is considered regressive <br /> · There is no mechanism to collect the tax now, so Eugene would be responsible for the costs of <br /> setting up and administering the tax <br /> <br />Mr. Carlson indicated that staff would recommend, at a minimum, replacing the current local option levies at <br />the time any revenue measure was put into place so as to reduce the existing property tax burden. Staff would <br />not necessarily recommend that be the only use of the money given the structural problems staff had <br />highlighted for the Budget Committee regarding the existing revenue picture. Mr. Carlson further <br />recommended the council table the discussion for a one-year period through 2002 because of the economic <br />conditions that currently exist. Staff did not believe this was the best time to seek a new major revenue source <br />and further believed that it was important to concentrate on the renewal of the library operating levy, <br />transportation funding, and possible bond measures for downtown City facilities. Mr. Carlson said that if the <br />council was interested in continuing to pursue nonproperty tax revenues, he recommended it remove the sales <br />tax option from further consideration and concentrate on the two income taxes, focusing on the surcharge <br />approach for the individual income tax, and the gross receipts tax. <br /> <br />Mr. Meisner said that he was comfortable tabling the item for one year, with the acknowledgment that the <br />tabling was not "passive," and staff will continue to work on the subject. <br /> <br />Ms. Nathanson arrived at the meeting. <br /> <br />Mr. Meisner indicated he would like to see an analysis of the revenue options based on an analysis of actual <br />service needs. He regretted setting aside work on a sales tax because it had the advantage of spreading the <br />burden to those who use City services but do not live in Eugene. However, he believed a sales tax should be <br />regional in nature, and he did not see such a tax happening soon. <br /> <br />Ms. Taylor determined from staff that the costs of setting up a taxing system would be one-time costs, and the <br />City would be responsible for the ongoing costs of administering a gross receipts tax. Mr. Carlson said that if <br />the City was to use the individual income tax or corporate income tax, administrative costs could be relatively <br />low, depending on how the tax was structured. <br /> <br />Ms. Taylor was opposed to tabling the subject given the many needs that exist, the need for property tax relief, <br />and the need to have a vote every four years to keep the library running. She said it was time to talk about <br />alternatives to the property tax. <br /> <br />Ms. Taylor objected to a surcharge on the State income tax, saying the income tax in Oregon was not <br />progressive as it relatively high for low-income residents. <br /> <br />Ms. Taylor asked if the City could levy an income tax on incomes above a certain level. Mr. Carlson said yes, <br />the City could exempt all income tax returns under a certain dollar figure from the surcharge. Ms. Taylor <br />indicated she was interested in that approach. <br /> <br /> MINUTES--Eugene City Council December 10, 2001 Page 3 <br /> Work Session <br /> <br /> <br />