AMENDED Agenda Packet 5-28-19 Meeting

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May 28, 2019, Meeting – Item 4 Community members who are unable to attend the public hearing may submit written comments to councilors online at eugene-or.gov/communitysafety. May 28, 2019, Meeting – Item 4 2. Why is a payroll tax being considered? A Community Safety Revenue Team was formed to develop a funding recommendation for the City Manager. The Revenue Team included three City Councilors, current and former Budget Committee members, and the Chair of the Police Commission. The revenue team studied many different types of funding options, ranging from levies to a combination of other taxes or fees. You can see the list and analysis of all revenue alternatives considered in the Revenue Team’s Final Report at eugene- or.gov/communitysafeyfunding. Also see the FAQs (question 2) on this web page for a link to key discussion points from the Revenue Team’s recent analysis of two specific alternative funding options: River Road/Santa Clara Annexation and a City personal income tax. The team took into consideration the amount of money needed, the administrative effort and potential costs, and the stability and reliability of the funds. They also considered the fairness of the different options, their feasibility within Eugene and how the option related to the community safety need. The team also reviewed the potential economic, environmental, and social equity impacts – also known as the triple bottom line. They focused on a payroll tax as they concluded their research. In the long term, gross payroll appears to be a sustainable and growing revenue source that can weather economic cycles and keep pace with general and wage inflation impacts on recommended service funding levels. 3. What is a payroll tax? Payroll taxes are taxes paid by employees and/or employers and are usually calculated as a percentage of gross payroll or wages. For employees, the tax is percentage of an employee’s total taxable wages. For an employer, the tax is usually a percentage of an employer’s total gross payroll. 4. Who would contribute to the proposed payroll tax and how much would it cost? A payroll tax is levied as a percent of gross payroll earned within the taxing jurisdiction. Entities can enact a payroll tax on employees and/or on employers. At their May 8 Work Session, Councilors were provided three versions of a possible payroll tax and moved forward with an option that included a rate of .0040 for employees and a rate of .0020 for employers located within the City of Eugene. This option also capped the rate for minimum wage earners at .0020.