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<br />raise revenue. <br /> <br />2. Support termination of state preemption of local taxes. <br /> <br />3. Oppose any effort to restrict cities' ability to diversify their income base. <br /> <br /> <br />B. PROPERTY TAXES <br /> <br /> <br /> 1. EXEMPTIONS <br /> <br /> In Oregon, a total of 120 different types of property tax exemptions will result in $18 <br />billion in local governments’ tax revenue foregone in the 2005-2007 biennium. As <br />outlined in the Oregon Department of Revenue’s “2005-2007 Tax Expenditure Report,” <br />many of these exemptions date back to the State's territorial days. Most, then, were <br />intended to further a public policy goal. <br /> <br /> Before the passage of Ballot Measure 50 and the resulting introduction of a rate-based tax <br />system, there was little competition between the public-policy goals associated with <br />exemptions and the public-service activities carried out under a local government’s <br />budget. Even if a property was exempted from taxation, the city’s levy remained intact, <br />and the revenue was replaced by shifting the obligation to the remaining taxable <br />properties. <br /> <br />This is no longer the case. Now, property tax exemptions reduce revenue to cities. If the <br />amount of assessed value is reduced because a property is exempted, then the amount of <br />tax revenue collected is reduced. Without another form of revenue to replace the <br />property tax loss, the result is fewer city services or reduced service levels. In fact, state- <br />granted property tax exemptions are simply state expenditures of scarce local government <br />revenue without consideration of the local government’s priorities or needs. <br /> <br />The realities of the new property tax environment faced by local government raise serious <br />concerns about a) granting exemptions or other property tax reductions; and b) <br />exemptions of intangible property. <br /> <br /> a. Granting Exemptions or Other Property Tax Reductions <br /> <br />City of Eugene Legislative Policies, 2007 Session <br />With IGR Mtg 10/17 and 10/26 Amendments C:\Documents and Settings\ceexelf\Local Settings\Temporary Internet <br />Files\OLK10B\LegPol2007Sesxx1.doc <br />Updated on: 11/6/2006 By: Last saved by ceexmfw <br /> 16 <br /> <br />