Item A: Adoption of 2007 Legislative Policies

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increased demands for services due to reductions in state programs. An adequate "rainy-day fund" has been identified as a critical way for the State to offset sudden reduction in revenues. It would not provide complete revenue replacement to the state during economic difficulties, but would provide some cushion for existing general fund programs if funding were to drop precipitously. State-shared revenues could also be protected during an economic downturn if such a fund was in place. The State’s current financial difficulties would clearly have been lessened if, in more Local Government Revenue prosperous times, the legislature had set aside surplus revenues in such a fund. Support the adequate funding of a state “Rainy P Day Fund” to provide revenue stability in the Recommendation: event of economic downturn. 1. Support the adequate In stabilizing state revenue, the State should P funding of a state “rainy- avoid destabilizing local revenue. day fund” to provide revenue stability in the Any new exemptions, deferrals or forgiveness event of economic P of property taxes should be granted by local downturn. However, in governments rather than through Legislative stabilizing state revenue, action because of the direct impact that such the State should avoid exemptions have on local government revenue. destabilizing local revenue. If the State grants an exemption that results in a P revenue loss to local governments, the governments should be reimbursed for the 2. STATE TAX STRUCTURE revenue loss. Proposals to restructure or change The Legislature should revisit all property tax P the State's tax system must allow exemptions in light of the new revenue local governments to finance the environment for local government. level of services demanded by their citizens. Cities must maintain local flexibility to initiate Oppose any exemption from taxation for the P revenue sources with local voter intangible personal property of centrally assessed approval, and to retain local companies. If such an exemption is granted, the state should reimburse cities for lost revenue. apportionment of revenue from State gas, liquor, beer and wine taxes, and other revenues. City of Eugene Legislative Policies, 2007 Session With IGR Mtg 10/17 and 10/26 Amendments C:\Documents and Settings\ceexelf\Local Settings\Temporary Internet Files\OLK10B\LegPol2007Sesxx1.doc Updated on: 11/6/2006 By: Last saved by ceexmfw 14