Item B - Econ.Dev.Comm. Recomm. - Laserfiche WebLink

Home Browse Search

business. Local governments can reduce a firm's tax burden or provide explicit assistance to a particular project. To reduce a firm's tax burden, local governments in Oregon are limited to reducing a firm's property tax burden. They are unable to influence income tax rates at the local level, and there is no sales tax to adjust. The State of Oregon allows local governments to participate in the Oregon Enterprise Zone program, which offers a three-to-five-year property tax exemption for new building, machinery and equipment investments by qualified businesses located within a designated area defined by the zone sponsor. The Committee focused on Enterprise Zones as a financial incentive tool. It is a tool that can address redevelopment, infill, and wages. It is not the only tool that can be used to achieve the City's goals, but it is one that has been effective in Eugene in the past. The Committee worked to identify ways for an Enterprise Zone to positively affect wages and to encourage firms to become environmentally sustainable. The Committee found that about 75% of the group supported the concept of an Enterprise Zone, but it was much more likely to reach full consensus if the Zone addressed wages and sustainability~4 The Committee acknowledged during its discussions that an Enterprise Zone is not an appropriate tool to accomplish all goals. State statutes appear to be amenable to consideration of wages in determination of Enterprise Zone benefits for eligible firms. Committee members agreed to address sustainability by ~ncouraging redevelopment and infill. RECOMMENDATION The Committee recommends that the City of Eugene establish an Enterprise Zone. Its boundaries should include the previous West Eugene Enterprise Zone properties, plus a relatively small amount of adjacent industrial-zoned properties that were not included in the previous zone. An eligible firm would receive 100% of the Zone's tax benefits if it expanded on existing, redeveloped, brownfield, or infill sites. Eligible firms would receive 67% of the tax benefits if the new investment occurred on a greenfield site (Oregon Administrative Rules preclude reduction of the tax exemption benefit by more than one-third). Those firms building on greenfield sites could receive up to 100% of the tax benefits if they meet additional criteria related to attractive wages, employee benefits, job training and advancement opportunities, job retention, and job programs that assist disadvantaged workers. 4 See attached addendum for a description of the Committee's decision process. Page 12 Recommendations July 2004 Mayor's Committee on Economic Development