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IIL Financing State. and Local Government.. <br /> A. TAX POLICY <br /> The adoption and subsequent implementation of Ballot Measure 50 has substantially changed <br /> cities' approach to certain financial issues. With control of property taxes slipping further from <br /> local governments, it is imperative for cities to retain and expand both the revenue-raising <br /> authority and the revenue sources that they presently have. State tax policy has direct and <br /> indirect effects on the financial welfare of Oregon's cities. <br /> 1. RAINY-DAY FUND <br /> Oregon is one of only five states in the <br /> General Precepts U.S. without an adequately funded <br /> "rainy-day fund" to provide revenue <br /> stability in the event of economic <br /> ¦The State should not take action that (1) reduces revenue, downturn. The State's primary general- <br /> (2) increases costs to cities, or (3) preempts local authority <br /> fund revenue source is the income tax, <br /> to raise revenue. If the State takes any of these actions, Which fluctuates with the economy. <br /> cities should be reimbursed for lost revenues or increased These income tax revenues were positive <br /> costs. <br /> during the years of a strong economy in <br /> most of Oregon, but as of late proven <br /> ¦Decisions about local services should continue to be inadequate to support continuing levels <br /> <br /> _ made at the local level. of state services while the economy is in <br /> a slow period. <br /> ¦Support actions to sustain the stability and adequacy of <br /> local revenue sources through positive and negative <br /> economic cycles. While stability of the state revenue <br /> system does not have adollar-for-dollar <br /> ¦Support actions to maintain or improve the stability of impact on cities, in the current economic <br /> State revenue sources. downturn it is possible that state <br /> programs of importance to cities could <br /> ¦The State should help cities to keep pace with the costs falter. Cities as well as other local <br /> of growth, particularly infrastructure needs associated governments will likely suffer reductions <br /> with growth. in state shared revenue as well as <br /> increased demands for services due to <br /> ¦Support the use of System Development Charges (SDCs) reductions in state programs. ' <br /> to fund capital improvements for police, fire, schools and <br /> other local government services affected by new <br /> development. An adequate "rainy-day fund" has been <br /> City of Eugene Legislative Policies, 2005 Session 7 <br /> <br />