Legislative Policies for the 2005 Legislative Session

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identified as a critical way for the State to offset sudden reduction in revenues. It would not provide services are best provided at the state level, while other services must be responsive to the complete revenue replacement to the state during economic difficulties, but would provide some cushion unique needs of each community. for existing general fund programs if funding were to drop precipitously. State-shared revenues could also be protected during an economic downturn if such a fund was in place. The State's current financial This partnership becomes dysfunctional wherrthe Legislature preempts certain revenue- difficultieswould clearly have been lessened if, in more prosperous times the legislature had set aside raising authority enjoyed by local government. This occurred in 1997 when local surplus revenues in such a fund. governments were prohibited from implementing a local real estate transfer tax and in Recommendation: 1995 when the Legislature preempted Eugene's ability to collect avoter- passed video Local Government Revenue poker tax. In both cases, the impact was to divest local government of one more tool - a l . Support the adequate necessary tool given property tax limitations - to meet the costs of services demanded funding of a state "rainy- by residents. It remains crucial for city residents, through their officials, to be able to y p ¦Su ort the ode ua g y determine the types and levels of services needed. da fund to rovide PP q to fundin of a state Rain revenue stability in the Day Fund" to provide revenue stability in the The City of Eugene will oppose event of economic event of economic downturn. However, in legislation that restricts cities' ability to Local Government Funding downturn, However, in stabilizing state revenue, the State should avoid diversify their income base. With the stabilizing state revenue, destabilizing local revenue. passage of Measure 50 in 1997 and the State should avoid Measure 5 in 1990, our options for ¦Any local government authority to raise destabilizing local ¦Any new exemptions, deferrals or forgiveness funding services needed and/or desired revenue should not be preempted by the revenue. of property taxes should be granted by local by our citizens are constrained. Cities' Legislature. governments rather than through Legislative authority to impose local option sales, action because of the direct impact that such use, business, income and premium ¦Terminate State preemption of local taxes 2. STATE TAX STRUCTURE exemptions have on local government revenue. taxes must be maintained, as well as their ability to impose vehicle, license ¦Oppose any effort to restrict cities' ability Proposals to restructure or change 'If the State grants an exemption that results in a to diversi their income base. and regulatory fees, fines and penalties. fY the State's tax system must allow revenue loss to local governments, they should be local governments to finance the reimbursed for the revenue loss. Recommendations: level of services demanded by their citizens. Cities must ¦The Legislature should revisit all property tax maintain local flexibility to initiate exemptions in light of the new revenue 1. Oppose any efforts by the Legislature to preempt local government authority to raise revenue. revenue sources with local voter environment for local government. approval, and to retain local ¦ 2, Support termination of state preemption of local taxes. apportionment of revenue from Oppose any exemption from taxation for the State gas, liquor, beer and wine intangible personal property of centrally assessed taxes, and other revenues. companies. If such an exemption is granted, the 3• Oppose any effort to restrict cities' ability to diversify their income base. state should reimburse cities for lost revenue. Recommendation: B. PROPERTY TAXES 1. Oppose any efforts to erode local flexibility in 1, EXEMPTIONS initiating revenue sources. In Oregon, a total of 107 different types of property tax exemptions resulted in more than 3. LOCAL AUTHORITY $19 billion in tax revenue foregone in the 2004-2005 biennium. As outlined in the Oregon Department of Revenue's "2004-2005 Tax Expenditure Report," many of these Local governments and the State are partners in serving the needs of Ore on's citizens. exemptions date back to the State's territorial days. Most, then, were intended to further a g public policy goal. Local and state governments recognize the distinct role each plays, and that certain City of Eugene Legislative Policies, 200 Session 8 City ofEugene Legislative Policies, 2005 Session 9