Legislative Policies for the 2005 Legislative Session

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_ Property Taxes Recommendations: Before the passage of Ballot Measure 50 and the resulting introduction of a .Oppose any modifications or "corrections" 1. Oppose any granting of new exemptions, deferrals or forgiveness of rate-based tax system, there was little to Measure 50 that reduce revenue to cities property taxes by the Legislature. competition between the public-policy without full reimbursement from the State. goals associated with exemptions and 2. Support reimbursement of revenue loss if the state grants an exemption the public-service activities carried .Oppose any modification to urban renewal that results in a revenue loss to cities. out under a local government's that affects maximum revenue collection budget. Even if a property was authority granted to urban renewal agencies 3. Support the Legislature revisiting allproperty tax exemptions granted in exempted from taxation, the city's under Measure 50 that would reduce urban the past in light of the new revenue impact on local government. levy remained intact, and the revenue renewal revenues, cause compression where was replaced by shifting the compression does not exist under current b. Exemption of Intangible Property obligation to the remaining taxable law, or that requires any retroactive properties, reimbursement of tax revenue already The coalition of centrally assessed businesses, including telecommunications collected, companies, power utilities, railroads and airlines, attempted to exempt intangible This is no longer the case. Now, personal property from property taxation in the 1997,1999 and 2001 legislative property tax exemptions reduce sessions. Despite strong opposition by local government, industry successfully revenue to cities. If the amount of passed HB 2050 in 1999, which was vetoed by the Governor. A similar bill, HB assessed value is reduced because a property is exempted, then the amount of tax revenue 2062, was also vetoed by the Governor following the 1997 session. A veto threat collected is reduced. Without another form of revenue to replace the property tax loss; in 2001 kept the same proposal bottled up in committee in 2001. the result is fewer city services or reduced service levels. In fact, state-granted property tax exemptions are simply state expenditures of scarce local government revenue without Any exemption of intangible personal property will reduce local government consideration of the local government's priorities or needs. revenue. A study completed in 1998 by a Department of Revenue work group showed that more than $2 billion in assessed value, some $30 million in tax The realities of the new property tax environment faced by local government raise serious dollars, could potentially be removed from the tax rolls. Exempting intangible concerns about a) granting exemptions or other property tax reductions; and b) property will substantially reduce local revenue and will foster perpetual tax exemptions of intangible property. appeals and litigation, an approach which appears not to be backed by economic logic. These issues could easily return in 2005. a. Grantin Exemptions or Other Pro>ertY Tax Reductions Recommendation: There is a concern that the State can grant property tax exemptions without regard to the impact such exemptions will have on local property-tax-dependent 1. Oppose the granting of any exemption from taxation for the intangible jurisdictions, It is recognized, however, that regardless of the revenue impact, personal property of centrally assessed companies. If such an exemption there may be occasions when property tax exemptions or deferrals are the best is granted, the State should reimburse cities for lost revenue. method of serving a city's long-term interests. In those cases, the decision to grant an exemption should be made at the local level, rather than by the State. 2. URBAN RENEWAL DISTRICTS AND THE SHILO INN DECISION If, however, the State grants property tax exemptions or other property tax As a result of Measure 50, the City undertook a full review of its urban renewal programs reductions without the approval of the taxing jurisdiction, the State should during the spring of 1998. For the Downtown District, the City determined that it would. r reimburse cities for the resulting revenue loss. grandfather the district and redirect all revenues toward an important public project in the downtown area (construction of a new library), With the new library complete, the City The Tax Expenditure Report highlights a number of property tax exemptions that Council amended the Downtown District plan in 2004 to allow projects besides the may no longer serve their public policy objective. Local governments would be library. Also, the City recently enlarged and renewed the Riverfront urban renewal well served by a thorough review of all of these expenditures. district to stimulate development in the vicinity of the soon-to-be constructed Federal Courthouse. Any action by the Legislature to reduce urban renewal revenues, or that City of Eugene Legislative Policies, 2005 Session 10 City of Eugene Legislative Policies, 2005 Session 11