Item A: Downtown Financing Strategy

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the tax rates of the taxing districts so that when those “divided rates” are applied to all tax bills in the City, the urban renewal agency receives its share, and the taxing districts receive the remainder. The Lane County Assessor determines how the tax rates for the schools, city, and county should get divided between the taxing districts and the urban renewal districts. As of December 2010, there are seven urban renewal districts in Lane County. As an example, the City’s permanent tax rate is $7.0058 per $1,000 of assessed value. The Lane County Assessor divides that tax rate into three pieces: $6.9056 goes to the City of Eugene, $0.0744 goes to the Downtown Urban Renewal District, and $0.0258 goes to the Riverfront Urban Renewal District. This calculation is done for each tax rate on the tax bill. After taking the information from the Lane County Assessor about the division of tax rates, an analysis can determine how an individual tax bill is affected by urban renewal division of tax. For the median Eugene home that the Lane County Assessor calculated for FY2009/2010, this median taxpayer would essentially pay the same amount of total taxes before or after urban renewal division of taxes. The difference is that the tax revenues are reallocated from the overlapping taxing districts to the urban renewal districts. Table 7 in Exhibit F sets out this calculation for the average taxpayer in Eugene. As can be seen, the before and after urban renewal views of this taxpayer’s bill are within one penny of each other. That penny represents the effects of truncation and rounding. Impact on Tax Rates: Urban renewal nominally affects voter-approved local option levies and bonds because the affected district has less property value to levy taxes against, resulting in slightly higher tax rates. Based on the FY2009/2010 tax rates, the estimated impact of this slight tax rate increase from the Downtown Urban Renewal District is about $1.66 for the average Eugene taxpayer, which represents less than 0.05% of the total tax bill of $2,938 in FY2009/2010. Impact on Overlapping Taxing District Revenues: For the overlapping taxing jurisdictions, a share of property taxes from the “excess value” or “incremental value” is not collected by the overlapping jurisdictions during the period of an active district, which reduces revenues. The incentive for the overlapping districts to support urban renewal is higher property tax revenues in the long-run. When the district is ended, the overlapping taxing districts are able to tax the entire value within the district. Under the theory of urban renewal, this value is higher than it would have been if there had been no district in effect. In general, urban renewal does not directly affect an individual school system’s budget because schools are funded by the state on a per-pupil basis. The estimated amount of urban renewal taxes to be divided over the remaining term of the Plan (net of discounts, delinquents, etc.) is shown in Table 8 in Exhibit G. Only the permanent tax rates of the overlapping jurisdictions are considered in this analysis because there are no local option levies included in urban renewal revenues for the Downtown Urban Renewal 16