Item A: Measure 37 Givings Tax - Laserfiche WebLink

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Other Jurisdictions Staff is unaware of any other jurisdiction in Oregon that has adopted a “givings” or “value added” tax. The Metro Council (Metropolitan Service District) is looking at the possibility of adopting a “windfall tax.” The tax being discussed would be imposed on the “windfall” to property owners when their land is brought inside the UGB. Half of the funds raised would be used to purchase conservation easements on farmland that have valid Measure 37 claims. The other half would be used to pay for public improvements like schools, roads and sewers in the UGB expansion areas. Metro’s discussion is still at the beginning stages. Tax/Fee Options The City Attorney and staff have come up with four separate options for a possible “givings tax” to fund Measure 37 claims. The four options are summarized in the following chart and briefly described below. Each of the options is more fully discussed in attachments A - D. Givings Tax Options Categories of Actions Examples of Actions Captured in Tax/Fee Option Name Captured in Tax/Fee (not all inclusive) Option 1 – Quasi-Judicial Rezoning ? Narrow Upzoning tax Site Specific Actions Change designation in Metro or refinement ? plan Option 2 – Local New City Investments Build a park (regional or neighborhood) ? ? Investment Tax that Improve a Improve streets, sidewalks or alleys ? ? ? Neighborhood Plant street trees ? ? ? ? ? Option 3 – New Legislative Actions Amendment to land use code ? ? ? Legislative (Single Legislative Amendment to Metro plan ? ? ? Change Tax Change Affecting Amendment to refinement plans ? ? ? ? Multiple Properties) ? ? ? ? Option 4 –All Factors Affecting Real estate market changes ? ? ? Capital Gains Property Value Except Interest rates on mortgages - ? ? Tax/Fee Property Owner Supply and demand factors - ? ? Investment and Inflation Inflation - ? ? Actions by other governments ? ? ? Build a state university ?- ? Build a neighborhood school Broad - Extend water and electric service - Prior quasi-judicial actions ? Prior City investments ? Prior legislative changes ? Option 1 – Tax on upzonings: Property owners occasionally request the City to change the zoning of their property or the land use designation for their property in the Metro Plan or in a refinement plan. Often times, this change in zoning or designation will increase the value of the property. The council can adopt an ordinance that imposes a tax or fee on that increase in value. The council would need to identify the amount of the tax or fee – presumably a percentage of the increase in value. The increase in value would be measured by the difference in value immediately before the change and immediately after. L:\CMO\2006 Council Agendas\M060125\S060125A.doc