Item 2D - 2005 Leg.Policies Doc - Laserfiche WebLink

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iii. Financing State and Local Government A. TAX POLICY The adoption and subsequent implementation of Ballot Measure 50 has substantially changed cities' approach to certain financial issues. With control of property taxes slipping further from local governments, it is imperative for cities to retain and expand both the revenue-raising authority and the revenue sources that they presently have. State tax policy has direct and indirect effects on the financial welfare of Oregon's cities. 1. RAINY-DAY FUND Oregon is one of only five states in the U.S. without an adequately funded General Precepts ;;rainy-day fund" to provide revenue stability in the event of economic downturn. The State's primary general- · The State should not take action that (1) reduces revenue, fund revenue source is the income tax, (2) increases costs to cities, or (3) preempts local authority which fluctuates with the economy. to raise revenue. If the State takes any of these actions, These income tax revenues were positive cities should be reimbursed for lost revenues or increased during the years of a strong economy in costs, most of Oregon, but as of late proven inadequate to support continuing levels · Decisions about local services should continue to be of state services while the economy is in made at the local level, a slow period. · Support actions to sustain the stability and adequacy of local revenue sources through positive and negative While stability of the state revenue economic cycles, system does not have a dollar-for-dollar impact on cities, in the current economic · Support actions to maintain or improve the stability of downturn it is possible that state State revenue sources, programs of importance to cities could faker. Cities as well as other local · The State should help cities to keep pace with the costs governments will likely suffer reductions of growth, particularly infrastructure needs associated in state shared revenue as well as with growth, increased demands for services due to reductions in state programs. · Support the use of System Development Charges (SDCs) to fund capital improvements for police, fire, schools and other local government services affected by new An adequate "rainy-day fund" has been development, identified as a critical way for the State to offset sudden reduction in revenues. It City of Eugene Legislative Policies, 2005 Session 7