Item 2F: Ratification of IGR Committee Actions

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Ms. Wilson, responding to question from Ms. Ortiz, noted that restaurant owner associations and related industry organizations had been lobbying very strongly against the bill, which called for an increase in taxes on malt beverages with the revenues from that tax being dedicated to drug treatment and rehabilitation programs. She added that the amount of the tax increase was considered to be very high. Mr. Poling agreed with the principle of the bill and its intention to generate tax revenues for drug abuse prevention and treatment and noted that the CCIGR should continue its monitor position as recommended by staff. Ms. Piercy, recognizing that the bill had in part been sponsored by local Senator Bill Morrisette, agreed that raising the tax on malt beverages for the purposes drafted in the bill was a good idea but was concerned that the level of the increase was too high to allow the bill to pass. Senior Accountant Doug Lauderbach noted that the bill represented the first increase in the tax rate of malt beverages in 32 years and noted that as drafted the bill would provide for a tax increase on a per-ounce level from one cent per 12 ounce can to an additional 15 cents per 12 ounce can. Senior Management Analyst Larry Hill noted that the manner in which the City might receive funds from the State tax under HB 2461 might mean that the City’s net share of the total beer and wine tax revenues would be severely diminished. He further noted that a smaller tax increase on malt beverages with greater flexibility in how such revenues might be spent at state, county and city levels would be a better choice. Mr. Hill, responding to a question from Ms. Ortiz noted that the bill referred only to malt beverages such as beer and would not apply to liquor. Mr. Hill stated that the bill would not likely survive at its current level of tax increase. Ms. Wilson commented that the League of Oregon Cities was against the bill’s dedication of funds to drug prevention and treatment programs that were not at the City level. Ms. Taylor believed that beer was “the poor person’s drink” and as such any tax upon it would be detrimental to Oregon’s home grown brewing industries. She reiterated her desire to have the CCIGR adopt an opposition position to the bill. Ms. Ortiz and Mr. Poling both believed that the CCIGR should continue the monitor position on HB 2461 as recommended by staff. HB 2643 – Relating to Urban Renewal. Ms. Taylor felt that, contrary to staff’s recommendation of a Priority 2 opposition position, the CCIGR should adopt a support position of HB 2643 as it would allow taxing districts with schools to be exempt from urban renewal taxations if they chose to. Mr. Weinman, responding to a question from Ms. Ortiz, noted that urban renewal plans in districts did not also have to be approved by county governments. Mr. Weinman and Ms. Wilson stated that, contrary to established City legislative policies opposing reductions of urban renewal revenue, HB 2643 would absolutely lead to reductions of such revenues. Ms. Wilson reminded the CCIGR that Ms. Taylor had, during a previous City Council discussion regarding the City’s legislative policies document, unsuccessfully advocated for the removal of the MINUTES—Council Committee on Intergovernmental Relations February 25, 2009 Page 3