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CE,O|CFFS|M2016 <br />ITY OF UGENEREGON ONSERVATION INANCE EASIBILITY TUDY AY <br />the city. According to Eugene’s city code, all revenues must be placedin the Cultural Services <br />Fund, which accounts for operation of the Hult Center, Community Events, Public Art and <br />Cuthbert Amphitheater. Lane County also levies a transient room tax, as does the stateof Oregon, <br />43 <br />making the current total TRTrate within Eugene 11.3 percent. <br />44 <br />in fiscal <br />The amount of taxes currently available for any given period, approximately $2.1 million <br />year 2015, varies with the lodging occupancy rate. An increase of 1 percent in the tax rate from 4.5 <br />to 5.5 percent could net about $467,000 in revenue in a typical year. The table belowillustrates the <br />potential revenue amountsfrom a TRT increase. See Appendix F for implementation and ballot <br />language requirements. <br />1%$466,667 $140,000 <br />2%$933,333 $280,000 <br />3%$1,400,000 $420,000 <br />Source: City of Eugene Revenue Team Report <br />*Based on revenue of $2.1 million from existing 4.5% TLT, net of collection fee retained by operators. <br />Marijuana Tax <br />Municipalities in Oregon are authorized to impose a tax on the sale of recreational marijuana. HB <br />3400passed in 2015, and provides that cities may adopt an ordinance, which must be referred to <br />the voters, imposing a tax or fee of up to 3 percent on the sale of marijuana items by a retail <br />licensee. The ordinance must be referred to the voters in a statewide general election, meaning an <br />election in November of an even-numbered year. Although HB 3400 provides that cities may <br />impose a tax on sales by retail licensees, it remains unclear whether a city can tax medical <br />marijuana. In particular, a city should consult its attorney on whether the authority to impose a tax <br />or fee on “the production, processing or sale of marijuana items,” vested solely in the Legislature <br />45 <br />except as provided in HB 3400, includes the authority to tax medical marijuana. <br />To date, no Oregon municipalities have imposed a tax on the sale of recreational marijuana. <br />However, the Eugene city council has referred a 3 percent tax on recreational marijuana to the <br />November 2016 ballot. The revenues have not been dedicated to any particular use; the council will <br />discuss how to use the proceeds during a work session in September 2016. City staff estimated that <br />the tax could raise between $200,000 and $600,000, but cautioned that these estimates are very <br />speculative. <br />The state of Oregon currently imposes a tax of 25 percent on sales of recreational marijuana. The <br />tax was expected to generate $1 million in January; actual revenue was $3.48 million, more than <br />three times what was expected. Information on how much each county or city generated is not yet <br />available.The revenues from the state tax, minus operating costs, will be divided among a variety <br />of accounts: 40 percent for the common school fund, 20 percent for mental health, 15 percent for <br />43 <br />Revenue Team, Report to the City of Eugene Budget Committee, April 2014, http://eugene-or.gov/2582/Revenue-Team <br />44 <br />Net of 5% collection fee retained by operators, City of Eugene <br />45 <br />League of Oregon Cities, Local Government Regulation of Marijuana in Oregon, August 2015 <br />TTPL::CFD23 <br />HE RUST FOR UBLIC AND ONSERVATION INANCE EPARTMENT <br /> <br />