09/10/1985 Meeting - Laserfiche WebLink

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the Counci 1 . Responding to Mr. Obie's question, Ms. Bellamy said she thought - the effort to inform the public would be under a tight deadline but was possible and important. Mr. Obie said it appeared that the opportunity to declare an emergency election probably was not available, so possible election dates were in November or in March. II. DRAFT LEGISLATION Mr. Gleason said the legislation had been drafted based on initial discussion and amounts and specifics still could be discussed or modified. A. Personal Income Tax Mr. Wong reviewed the sunnnary of provisions in the agenda attachments and said representatives from the City Attorney's Office were available to answer ques ti ons. He said the personal income tax would apply to earned and unearned income of residents and to income earned within the corporate city limits by non-resi dents. Ms. Wooten asked about the constitutionality of taxing non-residents, and Mr. Wong said that the issue was addressed by a September 9, 1985 memo included in the handouts. Responding to Mr. Holmer.s question, Mr. Wong said the tax would apply to dividends paid by Eugene e corporations, including interest paid by banks within the corporate city 1 i mi ts . He said the draft act also contained provisions for allocating business income between that taxable and non-taxable. Mr. Wong sa i d the dra ft used a ra te of 1/2 percent, subject to Counci 1 decision, and included provisions for a low-income credit, although a specific opti on s ti 11 needed to be i ndi ca ted. He sa i d revenue wa s dedi ca ted to ca pi ta 1 expenditures and specific projects could be included in the act. He also said the act contained no sunset provision, explaining that financial advisors had reported the sunset provision would make questionable both the bond rating by agencies and marketing of the bonds without stringent reserve and coverage requirements. Ms. Wooten asked whether the ordinance would be a charter amendment or a City sta tute. Mr. Wong said the ballot measure would be a charter amendment that would restrict the rate and use of funds, meaning that the rate could not be changed wi thout a vote. Mr. Miller asked for further explanation of the problem with the sunset provision, and Mr. Wong said the problem was the variability of the income stream, with agencies requiring strict reserves of five years. worth of debt service or an income stream of 150 or 140 percent of the debt service, or both. He said those requirements applied because the tax was an income tax rather than a property tax. Mr. Hansen asked whether credit was being pledged, and Mr. Wong said that with revenue bonds, the solidity of the income - MINUTES--Eugene City Council Revenue Work Session September 10, 1985 Pa ge 2