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

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ATTACHMENT C Transportation System Funding Overview of Commuter Tax Commuter Tax A commuter tax or fee is designed to generate revenue based on persons who work in a Brief jurisdiction, but who do not live in that jurisdiction. The tax or fee could be levied on an Description of employer based on the number of employees who live outside the City or the payroll Funding Option generated by those employees, or it could be a personal income tax on those employees. A commuter tax is typically imposed in conjunction with a parallel tax on residents at the same or a different rate. In this case only the tax elements that apply to nonresident workers actually make up the commuter tax. Precedence A commuter tax has never been implemented by the City of Eugene. Staff is unaware of (prior Council any other jurisdiction in Oregon that has implemented a commuter tax. There are a history, other number of cities and counties in other states that levy a commuter tax using one or jurisdictions another of the methods described here, typically in conjunction with a parallel tax on = practice, etc.)residents. The following are methods that have been used to impose a commuter tax by other Calculation Base jurisdictions, together with rough estimates of the calculation base for in Eugene. and Typical 1.A tax levied on each employer for that portion of total payroll paid within the Rates jurisdiction that is paid to non-resident workers. Annual total payroll for all workers is about $3 billion, while payroll for non-resident workers only is initially estimated to be around $1.5 billion. 2.A tax levied on that portion of a non-resident individual’s taxable income that is earned within the jurisdiction. Annual taxable personal income earned in Eugene by non-residents may be in the neighborhood of $1 billion, while total taxable income earned in Eugene by all workers may be $2 billion. 3.A business privilege fee levied on employers on a per capita basis for each non- resident worker employed within the jurisdiction. About 40,000 jobs are held by non-residents, out of a total of close to 80,000 jobs within Eugene. Jurisdictions with commuter taxes in the form of business privilege fees generally charge from $25 up to $50 per worker per year. Among jurisdictions with commuter taxes on payroll or personal income, the tax rates range from 0.25% to over 2%. The numbers provided here are initial, rough estimates based upon information available from the Oregon Employment Division. Example rates are drawn from a preliminary review of readily available information on existing commuter taxes. There are many outstanding questions and additional research and analysis will be necessary. 1