HomeMy WebLinkAboutItem 4: 4J and Bethel Budget ShortfallECC
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Work Session: 4J and Bethel Budget Shortfall
Meeting Date: January 24, 2011 Agenda Item Number: 4
Department: Central Services Staff Contact: Sue Cutsogeorge
www.eugene-or.gov Contact Telephone Number: 541-682-5589
ISSUE STATEMENT
This work session is a continuation of the council discussion about 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.
On January 11, 2011, the council met to discuss a possible new revenue for schools. Several key
questions were posed in order to provide direction on whether to move forward, and if it was
decided to move forward, what the revenue package should look like. A list of the key questions
is included in Attachment A.
As a result of their discussion, the council directed the City Manager to create an education sub-
committee that would include representatives of the City of Eugene, the Bethel and 4J school
districts, Stand for Children and the business community, and to return to the council with
recommendations. The charge of the subcommittee is included as Attachment B. On January 18
and January 20, the Subcommittee on Education Funding met to discuss an income tax proposal
for education funding. A report on the subcommittee’s progress will be provided at the council
work session. Subcommittee materials are available on the City’s website at www.eugene-
or.gov/schooltax.
Next Steps: If the council identifies a revenue source that should be pursued and provides
answers to the questions in Attachment A, staff will prepare a measure for the ballot for the
council to consider at the February 14 meeting.
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RELATED CITY POLICIES
There are no City policies related to City support for school funding. There is a council goal of
Fair, Stable and Adequate Financial Resources: A government whose ongoing financial
resources are based on a fair and equitable system of revenues and are adequate to maintain and
deliver municipal services.
COUNCIL OPTIONS
There are several options that the council could pursue with respect to school funding. The
options below have blanks for the council to fill in regarding the type of tax to pursue, the
amount of funding desired, what the funds should be used for, and which election to target for
the measure.
1.Direct the City Manager to return with a ballot measure for the May 2011 election to
implement a City personal income tax to generate approximately $__ million to assist the
schools by [insert what school funding is to be used for] [and fund ____ City programs].
2.Direct the City Manager to return with a ballot measure for the May 2011 election to
implement a City surcharge on the state personal income tax to generate approximately
$__ million to assist the schools by [insert what school funding is to be used for] [and
fund ____ City programs].
3.Direct the City Manager to work on a plan for the November 2011 ballot to implement a
City [personal income tax or City surcharge on the state personal income tax] to generate
approximately $__ million to assist schools by [insert what school funding is to be used
for] [and fund _____ City programs].
4.Determine to not move forward with a new revenue measure at this time.
CITY MANAGER’S RECOMMENDATION
The question before the council – whether to refer a tax measure to the ballot to support schools –
is a complicated question involving a number of political and fiscal considerations. Schools need
additional revenue. As discussed, the City also will need additional revenue in the future to
develop and maintain a long-term sustainable budget, including the maintenance of existing
services as well as considering new or expanded services. The council should weigh the school
districts’ needs against the potential impact of a City tax measure (to support schools) on a
possible future revenue measure for City services. Since this assessment primarily is a political
conclusion about how voters will react, the City Manager’s recommendation to the council is
limited to encouraging it to consider these other impacts when deciding whether to refer a measure
to support schools.
SUGGESTED MOTION
None.
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ATTACHMENTS
A.Key Questions About Education Funding Measure
B.City Council Subcommittee on Education Funding – Subcommittee Charge
FOR MORE INFORMATION
Staff Contact: Sue Cutsogeorge, Finance Director
Telephone: 541-682-5589
Staff E-Mail: Sue.L.Cutsogeorge@ci.eugene.or.us
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Attachment A
Key Questions for a City Revenue Measure for Education Funding
Questions Posed of Subcommittee on Education Funding
1.Should the City of Eugene pursue an income tax surcharge for education funding at this
time?
2.If so, what is the target amount of revenue to be generated to be distributed to the school
districts?
3.Should there be limits on what the schools can use the money for?
4.Should the revenue be permanent or have a sunset clause?
5.What should happen if the State develops an adequate, sustainable funding source for
schools while this tax is in effect?
6.What should the tax rates be for different income brackets?
7.Should any City services be included in the revenue package? If so, which ones?
8.How should the revenue be split among the two school districts and any City services that
might be included?
9.Which election date should be targeted – May or November 2011?
10.Should the Council pursue a regional revenue solution for education funding?
Additional Questions for Council Consideration
1. Should the new revenue be implemented through an ordinance or charter amendment?
2.When should the new revenue measure go into effect?
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Attachment B
City Council Education Funding Subcommittee
Subcommittee Charge
The Education Funding Subcommittee will make recommendations to the City Council on a new
revenue source for education funding. Specific questions to be addressed by the Education
Funding Subcommittee are:
1. Should the City of Eugene pursue an income tax surcharge for education funding at this
time?
2. If so, what is the target amount of revenue to be generated to be distributed to the
school districts?
3. Should there be limits on what the schools can use the money for?
4. Should the revenue be permanent or have a sunset clause?
5. What should happen if the State develops an adequate, sustainable funding source for
schools while this tax is in effect?
6. What should the tax rates be for different income brackets?
7. Should any City services be included in the revenue package? If so, which ones?
8. How should the revenue be split among the two school districts and any City services
that might be included?
9. Which election date should be targeted – May or November 2011?
10. Should the Council pursue a regional revenue solution for education funding?
Timeline:
The Education Funding Subcommittee will meet on Tuesday, January 18 from 3-5PM and
Thursday, January 20, from 9-11AM. Both meetings will be held in the Saul Room in the
Atrium. The Subcommittee will provide a progress report with any recommendations to the City
Council at the January 24 meeting. Further Subcommittee work will be determined by the City
Council at that time.
Resources:
The City has contracted with EcoNorthwest to provide analysis of potential revenue yields
(gross and net), information about how the revenue would be expected to perform over time
(i.e., volatility), overall economic impacts to the community as a whole and the business
community specifically, and equity issues. Information generated by EcoNorthwest will be
available to the Education Funding Subcommittee as it is developed. In addition, City staff is
working to develop a range of potential costs for administering such a tax, using different
possible methods of collection (i.e., State Department of Revenue, City staff, any other options).
Membership:
1. Andrea Ortiz, City Council 5. Alan Laisure, Bethel School Board
2. George Brown, City Council
3. Craig Smith, 4J School Board
4. George Russell, 4J Superintendent
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6. Colt Gill, Bethel Superintendent
7. Joy Marshall, Stand for Children
8. Hillary Johnson, School Advocate
9. Dave Hauser, Chamber of Commerce
10. John Barofsky, Business Representative
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