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

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Local Option Levy New or additional property taxes must be approved by a majority of the people voting in Legal Authority an election in November of an even-numbered year. In any other election, there must and Restrictions also be at least a 50% turnout of voters (the double-majority requirement of Measure on Use 50). A 10-year capital local option levy can only be used for capital purposes. 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 a useful life of at least 10 years for a 10-year capital levy). The tax is paid by all property owners within City limits. Property owners include Incidence (who business and residences. Businesses may choose to pass the tax on to their customers. pays?) The property tax is a proportional tax on the value of real and personal property for both Fairness/Equity businesses and residences. It does not take into account the ability of the taxpayer to Issues 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 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 with paying for them. This tax would generate capital funding on a ?pay-as-you-go? basis, rather than Assessment of providing lump-sum funding on the front end of projects. The level of revenue Financial generated would be static during the term of the levy (assuming a uniform amount levy) Stability and or could increase or decrease each year depending on the change in assessed value of the Political City (assuming a tax rate levy). Feasibility The property tax is understandable to the voters (as opposed to a new form of user fee or taxes), making it politically feasible from that standpoint. Local option levy proposals have had mixed success in the Eugene area in recent years. There have been six local option levy proposals on the ballot from Eugene or Lane County since Measure 47 passed, and three of those have been successful. Council members have expressed dissatisfaction with heavy reliance on property taxes in various forums in recent years. This tax would increase the cost of owning a home or business, and potentially increase Potential the cost of leasing or renting a home or business, if the property owner passes on the tax Economic increase. Impacts Council has several financial policies stating that, to the extent possible, non-recurring Consistency with resources, such as a local option levy, should be used for non-recurring expenses, such Council Goals as capital projects. and Policies Council goals include a desire to foster affordable housing. An additional property tax levy would be contrary to that goal, as it would raise the cost of housing. Prior to the passage of Measure 50, several jurisdictions funded transportation projects Other with a serial levy. Under the ?black box? calculation of Measure 50 permanent tax Jurisdiction rates, most of those serial levies were incorporated into those jurisdictions? permanent Experiences tax rates. Since implementation of Measure 50, there do not appear to be any local governments that have used local option levies for transportation funding projects. I8