Item B: Funding Strategies for Transportation System Operations, Maintenance, and Preservation

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Capital Local Option Levy Legal Authority New or additional property taxes must be approved by a majority of the people voting and Restrictions in an election in November of an even-numbered year. In any other election, there must on Usealso be at least a 50% turnout of voters (the double-majority requirement). Voters may approve a 10-year capital local option levy at one election, without requiring any renewals over the 10-year period. A 10-year capital local option levy can only be used for capital purposes, which are specifically defined in the statutes. For pavement preservation, the proceeds from a capital local option levy could be used for street construction, overlays and reconstruction, as allowed by the specific language of the ballot measure. The projects funded with a capital levy must have an average useful life of at least the term of the levy (i.e., projects with an average useful life of at least 10 years for a 10- year capital levy). Proceeds could be spent over a longer period than the levy—for example, levied over a 10-year period but spent over 15 years. Incidence (who The tax is paid by all property owners within City limits. Property owners include pays?)business and residences. Businesses may choose to pass the tax on to their customers. In Eugene, approximately 69% of the taxable assessed value in FY07 is for residential property and 31% is for non-residential property. The actual taxes paid may differ from these percentages, however, due to Measure 5 tax rate compression. Fairness/Equity The property tax is a proportional tax on the value of real and personal property for both Issuesbusinesses and residences. It does not take into account the ability of the taxpayer to pay the tax. There are numerous exemptions from the property tax designed to promote a variety of policy goals, including some designed to lessen the impact on non-profit organizations and low-income owners and tenants. Projects with a useful life of more than 10 years would be paid for by those taxpayers who live in the City only during the 10 year life of the levy, and those citizens that use the facilities beyond the 10 year life of the levy would receive those services without paying for them. Property taxes are paid only by property owners within the City limits. Any users of the property tax-financed assets that live outside the City do not pay for a share of the use of that asset. 4