Item A: Adoption of 2007 Legislative Policies

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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. General Precepts 1. RAINY-DAY FUND The State should not take action that (1) reduces cities’ P Oregon is one of only a few states in the revenue, (2) increases costs to cities, or (3) preempts local U.S. without an adequately funded authority to raise revenue. If the State takes any of these “rainy-day fund” to provide revenue actions, cities should be reimbursed for lost revenues or stability in the event of economic increased costs. downturn. The State's primary general- fund revenue source is the income tax, Decisions about local services should continue to be P which fluctuates with the economy. made at the local level. These income tax revenues were positive during the years of a strong economy in most of Oregon, but as of late proven Support actions to sustain the stability and adequacy of P inadequate to support continuing levels local revenue sources through positive and negative of state services while the economy is in economic cycles. a slow period. Support actions to maintain or improve the stability of P State revenue sources. While stability of the state revenue system does not have a dollar-for-dollar impact on cities, in the current economic The State should help cities to keep pace with the costs P downturn it is possible that state of growth, particularly infrastructure needs associated programs of importance to cities could with growth. falter. Cities as well as other local governments will likely suffer reductions Support the use of System Development Charges (SDCs) P in state shared revenue as well as to fund capital improvements for police, fire, schools and City of Eugene Legislative Policies, 2007 Session other local government services affected by new With IGR Mtg 10/17 and 10/development. 26 Amendments C:\Documents and Settings\ceexelf\Local Settings\Temporary Internet Files\OLK10B\LegPol2007Sesxx1.doc Updated on: 11/6/2006 By: Last saved by ceexmfw 13