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City of Eugene, Oregon Fiscal Year 2007 Budget Message <br />to ask voters next November to extend the levy another four years. Councilors will <br />make their final decision on what to place on the November ballot in May. <br />The Youth and Schools Local Option Levy has provided before and after-school <br />athletic, health, and cultural arts programs to students in the 4J and Bethel schools <br />since 2004. The approved ballot title called for 93% of the taxes collected to be sent to <br />the school districts and 7% to be used by the City to directly provide services to youth. <br />This levy was successfully challenged in Tax Court as a violation of Oregon's <br />Constitution, which created separate property tax limits on education and general <br />government when voters passed Measure 5 in 1991. The court ruled that the portion of <br />the tax dedicated to education should be assessed against the $5 per $1,000 of assessed <br />value school cap, not the $10 general government cap. The City is appealing the <br />ruling, and the FY07 Proposed Budget has been built to assume that the levy continues <br />as is in FY07. At the time of writing this message, the Tax Court had not made its final <br />judgment in the case, so details of what will actually happen in FY07 are not available. <br />The City Council preliminarily agreed last fall to place a renewal of this levy on the <br />November 2006 ballot. The City and school districts will work together to decide the <br />best approach to take with any possible levy proposal, after taking into account this <br />court decision. <br />As discussed with the Budget Committee this winter, all government entities across the country <br />are being required by the Governmental Accounting Standards Board (GASB) to report any <br />liabilities due to post employment benefits on their financial statements by FY08. Eugene, as <br />required by Oregon law, provides retirees with the opportunity to purchase post retirement health <br />insurance at the City's pooled rate, which is less than the rate the retiree would pay if purchasing <br />the same insurance coverage at market rates. This subsidy amounts to a substantial unfunded <br />liability currently estimated to be in excess of $20 million. <br />Conclusion <br />Working together, we can achieve our priorities and our vision for Eugene. Eugene is home to <br />active and engaged citizens with diverse points of view about the future of our downtown, <br />economy, and neighborhoods. The recent outpouring of citizen comment on the proposed <br />development of a city parking garage on East Broadway was a wonderful example of the <br />passionate, civil, and informative civic debate that is a hallmark of this community. Finding the <br />path that achieves a balance is a difficult job. City leaders must make tough choices that echo <br />through the years... to come. Through priority setting, strategic planning, and a good measure of <br />focus and discipline, we can create the healthy and vibrant downtown, the dynamic economy, and <br />the safe neighborhoods we all desire. <br />Sincerely, <br />Dennis M. Taylor <br />City Manager <br />