CC Minutes - 12/10/01 Work Session

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Ms. Taylor said she thought the City was going to cover the costs of the downtown fire station using existing funds. Mr. Carlson recollected that the council directed the staff to come back with a financing plan for both the downtown fire station and the special operations building, which they would do in February 2002. He did not know if the cost of a fire station could be handled from existing resources without a bond issue. Mr. Kelly shared Ms. Taylor's concern about tabling the subject while appreciating Mr. Meisner's remarks that work would go on. Given the unmet service needs and the citizens' desire to maintain the current level of services, as well as the unsustainability of the current property tax system over the long-term and its impact on homeowners on fixed incomes, he preferred to work actively during 2002 on bringing a package to the voters in 2003. He suggested the council step back and identify its goal, and he perceived the goal as a restructuring of the current revenue system. First, such a restructuring would relieve some of the property tax burden; second, it would roll the current levies into the system and avoid future stop-gap measures; third, the council could build a revenue forecast that allowed it to restore the service levels that existed previous to the passage of ballot measures 47/50, noting neither measure was supported by Eugene voters. Mr. Rayor questioned the wide variations in the revenue yield projections provided by staff, and asked the reason for the large range. Mr. Carlson said that the yield numbers were dependent on the accompanying rates; the reason the corporate excise tax yield was so low was due to lack of corporations in the community. Mr. Rayor wanted to look at City finances on both the revenue and cost side. He tended to support a surcharge on income tax because he suspected such a tax might be deductible from State and federal taxes and the City would, in effect, be using those agencies' moneys. He was supportive of tabling the subject in an active manner, but, like Mr. Meisner, was interested in determining where the need existed. He pointed to the relatively small amount of revenue that would be needed to support youth services, for example, and suggested a third of that would come from the federal government if the surcharge was deductible. He suggested the City follow Salem's lead in looking at this option. Ms. Bettman thought an alternative to tabling action would be to pursue the topic but not aggressively. She suggested a variation of draft action B- 1, outlined in the meeting packet, wherein the council identified those taxes it was interested in pursuing. She was not interested in a sales tax, which she thought should be assessed on a broader level than city- or region-wide. She wanted to know what percentage of property taxes the council was considering for offset and what service gaps would be addressed as well. Ms. Bettman pointed out that the council always had the discretion of when to implement a tax. Ms. Bettman supported a mechanism that would replace a portion of the property tax, because even during an economic downturn it would result in more affordable housing. Mr. Pap~ preferred a sales tax with exemptions for food and other essentials. However, he acknowledged the difficulty of passing such a tax. He asked how Portland was able to get its additional taxes passed. Mr. Carlson said that the business tax was established in 1854, and staff did not believe it was subject to a vote at that time. Mr. Johnson said the Multnomah County business tax was revised in 1970. Staff was unsure of when it was initially levied. Mr. Pap~ said he agreed with Ms. Bettman's suggestion that the council proceed and concentrate on communicating the situation to the community and setting the stage. The City could do some polling on all the approaches to see what the community thought. That would give the council an idea of what, if anything, was MINUTES--Eugene City Council December 10, 2001 Page 4 Work Session