Item 5: 4J and Bethel Budget Shortfall

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ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Work Session: 4J and Bethel Budget Shortfall Meeting Date: January 11, 2011 Agenda Item Number: 5 Department: Central Services Staff Contact: Sue Cutsogeorge www.eugene-or.gov Contact Telephone Number: 541-682-5589 ISSUE STATEMENT This work session is for council to discuss whether to move forward with consideration of a new revenue source to assist the public schools. BACKGROUND As the magnitude of the budget shortfall facing the Eugene School District has become clearer in recent months, a community discussion has emerged around the possibility of the City of Eugene enacting a tax on behalf of the local public school systems. On December 14,2010, Mayor Piercy held a public forum on the topic to hear from concerned citizens and a citizen group has formed to explore the idea further. While the City can impose the taxes suggested by the citizen group, such efforts should be evaluated in a broader context including competing measures (both City of Eugene and other local jurisdictions), which options are viable and what the funds raised should be used for. Attachment A includes recommendations from 4J Superintendent George Russell for a City revenue measure to help fill the school funding gap, currently estimated at $22 million. Both the initial recommendation and the revised recommendation are included. The Superintendent calls for a City tax to fund schools beginning in FY13 (July 1, 2012), and uses as an example $10 million per year for three years. Bethel School District is expected to also have funding shortfalls, which preliminarily range from $4 - $7.6 million, depending on what happens with state revenues and school funding, according to information available on Bethel’s web site. In order to present a proposal to voters at the May election, which has been suggested by school advocates, the council would need to move quickly. The deadline to place a measure on the ballot is February 15. This work session will start the conversation by asking several questions of the council. Additional discussion would be needed at a subsequent work session prior to placing the measure on the ballot. New Revenue Options: School advocates have suggested two potential revenue sources: a restaurant tax or a personal income tax. There are several other major revenue sources that have been discussed from time to time. Attachment B includes summary material about several potential revenue sources, along with basic information about those revenue sources. It should be noted, however, that the revenue \\Cesrv500\cc support\CMO\2011 Council Agendas\M110111\S1101115.doc