Legislative Policies for the 2007 Oregon Legislative Session

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City of Eugene Legislative Policies for 2007 Oregon Legislative Session City of Eugene Legislative Policies #or 2007 Oregon Legislative Session Recommendation authority to impose local option sales, use, business, income and premium taxes must b~ ~ Local Government Revenue ~ Support the adequate funding ofa maintained, as well as their ability to impose vehicle, license and regulatory fees, fines and Support the adequate funding of a state "Rainy state "rainy day fund" to provide penalties. Day Fund" to provide revenue stability in the revenue stability in the event of event of economic downturn. economic downturn. However, in Recommendations In stabilizing state revenue, the State should stabilizingstaterevemse, the State ~ Oppose any efforts by the Legislature to preempt local government authority to avoid destabilizing local revenue. ShOU/d aVO%d destab%/IZ%ng /OCaI raise revenue. revenue. ~ Support termination ofstate preemption oflocal taxes. Any new exemptions, deferrals or forgiveness of ~ Oppose any effort to restrict cities' ability to diversify their income base. property taxes should be granted by local governments rather than through legislative State Tax Structure action because of the direct impactthat such pro osals to restructure or chan a the B. PROPERTY TAXES exemptions have on local government revenue. p g State's tax system must allow local B1. Exemptions If the state grants an exemption that results in a governments to finance the level of services In Oregon, a total of 120 different types of property tax exemptions will result in $18 billion revenue loss to local governments, the demanded b their citizens. Cities must in local governments' tax revenue foregone in the 2005-2007 biennium. As outlined in the governments should be reimbursed for the y revenue loss. maintain local flexibility to initiate revenue Oregon Department of Revenue's "2005-2007 Tax Expenditure Report," many of these me Legislature should revisit au property tax sources with local voter approval, and to exemptions date back to the State's territorial days. Most, then, were intended to further a exemptions in light of the new revenue retain local apportionment of revenue from public policy goal environmentfor local government. State gas, IIgUOr, beer and wine taxes, and other revenues. Before the passage of Ballot Measure 50 and the resulting introduction of orate-based tax Oppose any exemption from taxation for the System, there was little competition between the public-policy goals associated with intangible personal property of centrally exem tlonS and the ublic-service activities carried out under a local overnment's bud et. assessed companies. If such an exemption is Recommendation p p g g granted, the state should reimburse cities for lost ~ Oppose any efforts to erode local Even if a property was exempted from taxation, the City's levy remained intact, and the revenue. flexibilityin initiating revenue sources, revenue was replaced by shifting the obligation to the remaining taxable properties. A3. Local Authority ~ This. is no longer the case. Now, property tax exemptions reduce revenue to cities. If the Local governments and the State are partners in serving the needs of Oregon's citizens.. amount of assessed value is reduced because a property is exempted, then the amount of Local and state governments recognize the distinct role each plays, and that certain tax revenue collected is reduced. Without another form of revenue to replace the property services are best provided at the state level, while other services must be responsive to tax loss, the result is fewer city services or reduced service. levels. In fact, state-granted the unique needs of each community. - property tax exemptions are simply state expenditur®es of scarce local government revenue without consideration of the local government's priorities or needs. This partnership becomes dysfunctional when the Legislature preempts certain revenue- raisingauthority enjoyed by local government. This occurred in 1997 when local The realities of the new property tax environment faced. by local government raise serious governments were prohibited from implementing a local real estate transfer tax and in concerns about a) granting exemptions or other property tax reductions and b) exemption . 1995 when the Legislature preempted Eugene's ability tocollect avoter-passed video of intangible property. poker tax. In both cases, the impact was to divest local government of one more tool, a necessary tool given property tax limitations, B1 a. Granting .Exemptions or Other Property Tax Reductions to meet the costs of services demanded by There is a concern that the State can grant property tax exemptions without regard to the residents. It remains crucial for city impact such exemptions will have on local property-tax-dependentjurisdictions: It is residents, through their officials, to be able to Local Government Funding recognized, however, that regardless of the revenue impact, there may be occasions when Any local government authority to raise revenue roe tax exem tions or deferrals are the best method of seNin a ci 's Ion term determine the types and levels of services should not be preempted by the Legislature. nt pe ts. In those cases, the decision to rant an exem tion shou d be made at the local needed. 9 p Terminate State preemption of local taxes. IeVel, rather than by the State. .The City of Eugene will oppose legislation Oppose any effort to restrict cities' ability to that restricts cities' ability to diversify their diversify their income base. If, however, the State grants property tax exemptions or other property tax reductions income base. With the passage of Measure without the approval of the taxing jurisdiction, the State should reimburse cities for the 50 in 1997 and Measure 5 in 1990, options resulting revenue loss. for funding services needed and/or desired The Tax Expenditure Report highlights a number of property tax exemptions that may no by Eugene citizens are constrained. Cities' longer serve their public policy objective. Local governments would bewell-served by a thorough review of all of these expenditures. 8 9