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MeetingtheChallengeTaskForce <br />ReviewofGeneralFundRevenueAlternatives <br />January22,2010 <br />RestaurantTaxʹRecommended <br />DescriptionTaxonsalesoffoodandnonalcoholicbeveragesservedby <br />restaurantsinEugeneandpaidbythecustomersbasedontheirbill. <br />MeetingtheChallengeActionTheTaskForcerecommendeda5%RestaurantTax. <br />LegalAuthority&RestrictionsUnderhomeruleauthority,Oregoncitieshavethepowertoenacta <br />salestaxwithoutstateenablinglegislation. <br />PrecedenceCurrently,therearetwocitiesinOregonthatcollectthistax.The <br />CityofYachatscollectsa5.0%taxthatappliestomostprepared <br />foodsanddispensedbeverages,notincludingalcoholicbeverages. <br />YachatsCityCouncilvoted41infavorofthetaxonNovember6, <br />2006;collectionofthistaxstartedinJulyof2007.Taxproceedsare <br />dedicatedtodebtpaymentsonthewastewatertreatmentplant. <br />Theordinancethatimposedthetaxdoesnothaveasunsetclause, <br />andcontainsaprovisionallowingtheCityCounciltoincreasethe <br />taxrateinthefutureafterapublichearing. <br />TheCityofAshlandcollectsa5.0%taxonallpreparedfood. <br />Currently,80%ofthetaxgoestowardsdebtpaymentsforpast <br />upgradestothesewagetreatmentplantand20%goesforparkland <br />purchases.Thetaxwastosunsetin2010.On <br />November3,2009,Ashlandvotersvotedtoextendthe5%taxto <br />2030,58.8%to41.2%infavor.Oneofthefactorsinthisvotewas <br />thatthewastewaterrateswouldhavegoneupby55%hadthetax <br />notbeenrenewed. <br />InMarch1993,theCityofEugeneproposeda3.0%restauranttax <br />tobeusedasageneralrevenuesource;theproposalfailedatpublic <br />votewith60%opposedand40%infavor. <br />RevenueYield&StabilityBasedonestimatesdevelopedforthe1993proposedrestauranttax <br />andassuming4%averagegrowth,a1.0%restauranttaxwould <br />generateapproximately$2.8millionin2009.Ifleviedat5.0%rate, <br />thistaxwouldraiseapproximately$14millionannually. <br />Determininghowmuchofthisamountwouldbepaidbyoutof <br />townvisitorsvs.Cityresidentswouldrequireadditionalresearch,as <br />thisinformationisnotimmediatelyavailable. <br />Revenueswouldfluctuatewithchangesinpersonalincomeandthe <br />economicenvironment. <br />RevenueAdequacyBasedupontheestimatedannualyield,thisrevenuesourcewould <br /> <br />