Item 3: Ratification of IGR Committee Actions and Direction on Legislative Policy

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this aspect of the legislation should include no net loss of funding through the State Highway Trust Fund allocations and consistency and predictability in this source of funding. Another intent of the bill is to create taxes that would affect customers using heating oil as well as utilities and their customers who generate electricity using carbon-based fuels. EWEB would have a better sense of what impacts that might have on Eugene customers, and whether carbon-based fuel taxes would have an effect on housing affordability. It certainly should be noted that Eugene has a commitment to sustainability and climate change initiatives (VII A-1). Much more analysis would need to be done to determine if this bill can address those objectives without compromising the issues discussed above. ContactRespondentDept Updated Priority Policy Poli Numb Recommendation Felicity Fahy Felicity fahy CS-CMO 1/21/2009 Pri 1 Yes YesVII. A1 Monitor Comments: Need to monitor this one closely. I agree with Glen, Eric and Larry it could have a variety of fiscal implications for the city. The fund generated could also be important for financing beneficial renewable energy initiatives. ContactRespondentDept Updated Priority Policy Poli Numb Recommendation Glen Svendsen Glen Svendsen CS-FAC 1/16/2009 Pri 1 Monitor Comments: A carbon tax on energy used in City buildings and vehicle fllet would increase the City's cost of doing business. As a rough estimate, each 1% of tax would increase City costs for utilities and fuel by roughly $50,000. HB 2122 Relating Clause: Relating to tobacco tax; appropriating money; prescribing an effective date; providing for revenue raising that requires approval by a three-fifths majority. Title: Increases tax on cigarettes and other tobacco products. Distributes tax revenues from increase. Applies tax increase to cigarette and tobacco products reporting periods occurring on or after January 1, 2010, or first day of calendar month following effective date of Act. Takes effect on 91st day following adjournment sine die. Sponsored by: Governor Theodore R. Kulongoski URL:http://www.leg.state.or.us/09reg/measpdf/hb2100.dir/hb2122.intro.pdf ContactRespondentDept Updated Priority Policy Poli Numb Recommendation Larry Hill Doug Lauderbach CS-FIN 1/27/2009 Pri 2 Yes II. B1 Monitor Comments: I recommend monitoring; the bill does not reduce current funding levels nor does it restrict the use of state shared revenues for cities. HB 2122 would increase the state cigarette tax. However, as introduced, the bill does not specify the percentage share of total revenue that would go to cities, counties, and the state. If the bill is amended allocate the additional state cigarette tax as outlined in ORS 323.455, I would recommend to support. The City of Eugene's current share of state cigarette tax revenue will be an estimated $262,000 in FY09. Cities may use their share for general government purposes, without program restrictions on their use. Oregon’s cigarette tax was approved in 1967. When it passed, the tax was $0.04 per pack, with 50 percent of the tax designated for property tax relief and 50 percent to be distributed to cities and counties. Since then, the amount of tax on cigarettes has increased but cities’ proportionate share of the tax revenue has shrunk, from 33 percent to just 1.7 percent of the total tax (a second penny was added for cities in 1986). The current tax rate is $1.18 per pack of 20 cigarettes. Despite the tax increase, cigarette tax revenues have generally been declining each year. Revenues from the tax is allocated 2