The Eugene City Council voted 8-0 tonight to continue discussion of a May ballot measure on an income tax for schools.
The council plans to discuss details of the measure on Feb. 14 and take a final vote. The 4J school board may vote on whether to support the additional city funding and how much on Feb. 9.
Several councilors appeared to indicate they may ultimately oppose referring a school funding measure to a May ballot vote, but a majority of four councilors and the Mayor spoke in favor of a May ballot measure.
Details remain undecided, but school supporters have discussed a graduated income tax that would raise at least $10 million for 4J and $4 million for Bethel schools per year. The income tax discussed would exempt lower income people and sunset in six years.
At the Eugene 4J School Board Meeting tonight:
—Superintendent George Russell revised his $22 million estimated budget cut to $28 million, due to new numbers from Gov. elect John Kitzhaber.
—District staff argued for a May school construction bond measure because it would leverage $15 million in federal construction funding and they could claim that the district wasn't raising taxes because of an expiring previous school construction levy. But a May bond vote to build new schools could cause the district to lose $10 million dollars or more in operating funding from a proposed city tax to keep the schools the district already has open. But two board members and Russell spoke favorably of the city tax effort for schools.
—A majority of 4J board members appeared to oppose closing Adams elementary, one of the brownest and poorest schools in the district, to give the building to the Charlemagne French immersion elementary, one of the whitest and richest schools in the district. But the board opposed officially taking the option of closing Adams off the table, forcing Adams parents to go to more late night meetings to defend their school. Fox Hollow parents apparently won’t have to plea for their school. The school board, which includes one French immersion parent, has not applied the same closure tests and criteria to Fox Hollow as it has applied to neighborhood schools. The board now appears to be targeting Parker to make room for Fox Hollow. The board rejected the least disruptive option of simply leaving the French school where it is pending a proposed reevaluation of 4J alternative schools next year. Moving Fox Hollow to Parker may apparently save almost no money as it would require a new large parking lot and drop off area because almost all the French school parents drive their kids to school, according to 4J staff.
The Eugene City Council is considering a variety of city tax options to help local schools facing severe budget cuts.
The mayor and a city councilor have reportedly asked city staff for information on several tax options including a graduated income tax, a flat income tax and a restaurant tax.
A progressive, graduated city income tax with rates set at 0.5 percent for income (AGI) $50,000 to $99,999, 1 percent for $100,000 to $249,999, and 1.5 percent for incomes more than $249,999 would generate roughly $40 million per year. That's based on an EW analysis of state tax data that assumes Eugene has a similar income distribution to Lane County and generates about 63 percent of the Adjusted Gross Income in the county.
A flat 1 percent income tax would generate roughly $44 million a year for local schools, according to the EW analysis.
A 5 percent Eugene restaurant tax would generate about $4 million a year, based on adjusting a previous city staff estimate of restaurant tax revenue to account for growth. The 4J school district may cut scores of teachers and effectively limit school to four days a week to close a $22 million budget deficit. Bethel also faces millions of dollars in cuts.
Based on local voting experience, a graduated, progressive income tax could be the easiest to pass.
Last year a state income tax increase on income over $250,000 passed three to one in Eugene.
The proposed graduated tax on incomes above $50,000 in Eugene would impact roughly a third of local taxpayers, according to EW's analysis. The proposed 1 percent flat tax on all incomes would impact all voters, but would generate only 10 percent more revenue than the graduated tax on incomes above $50,000.
If the graduated tax were limited to incomes above $70,000, the tax would impact roughly 20 percent of taxpayers and generate roughly $22 million a year. A graduated tax above $100,000 would impact roughly 10 percent and generate roughly $19 million a year.
A proposed flat county income tax to fund the jail failed two to one in Eugene in 1999 amid criticism that it was unfair to the poor and emphasized prisons over crime prevention and treatment.
A proposed 5 percent Eugene tax on restaurants in 1993 to help with a city budget deficit, failed by a 20 percent margin. Restaurants organized to oppose the tax which they argued could send business outside city limits and citizens expressed concern it could unfairly impact the poor, who spend about a third of their limited income on fast food.
To refer a city tax measure to save local schools to the May ballot, the Eugene City Council will have to vote for the referral by the middle of next month.
A local movement for a city income tax on upper incomes to help local schools has run into opposition from The Register-Guard and conservatives who argue that it is unlikely to pass.
But a very similar income tax passed in Eugene this year by a three-to-one margin. In January, the state Measure 66 income tax increase on those earning more than $250,000 passed with 73 percent support in Eugene.
In addition, local voters have repeatedly shown strong support for schools, repeatedly passing local tax increases by two-to-one margins. A web survey by School District 4J last month found three-fourths of the 1,999 respondents supported a city tax for local schools.
Eugene Mayor Kitty Piercy has announced a public forum on the possibility of a city tax for local schools on Tue., Dec. 14 from 7-9 pm in the council chamber at City Hall.
The forum will examine the possibility of a sales tax instead of an income tax (city property taxes for schools are legally prohibited). But sales taxes hit the poor harder than the wealthy and have failed over and over in Oregon and Eugene by wide margins.
Statewide sales tax measures have failed nine times in Oregon, often by huge margins. In the last attempt, a state sales tax targeted at school funding with reductions in property taxes, exemptions for groceries and tax credits for the poor failed by a three to one vote statewide in 1993 and by a two-to-one vote in Lane County.
In 1993 a Eugene sales tax on restaurants failed by a 20 percent margin with strong opposition from restaurant owners.
Sales taxes take a larger share of income from the poor than the wealthy as the poor tend to spend all their incomes, while wealthier people have the luxury of savings and investment, research has found.
There's also some discussion of a less progressive local income tax that would reduce rates on the wealthy by targeting the middle class. Saving upper income people money may win a few conservative supporters, but could lead to defeat at the polls, especially with lower-wage people struggling in the recession. In 1999 a flat income tax proposal from Lane County to fund the jail by targeting the poor and middle class failed by a wide margin.
A city income tax on incomes above $100,000 would raise roughly $14 million for each percentage point of tax, according to EW estimates based on state tax data.
While, there's some discussion on exactly what tax to propose, there appears to be broad support for the importance of saving local schools from draconian budget cuts.
A city press release on the City Hall forum next week states: "Good public schools keep a city vibrant and healthy. Businesses need them, both as an immediate source of workers and as a means to attract employees to Eugene. Professionals considering relocation here often focus as much on the quality of the schools as on salaries and benefits being offered. Good schools raise property values and help reduce crime."