County Commissioner David Brock Smith came to the Brookings City Council seeking approval of the proposed 3 percent sales tax ballot question — and instead introduced another idea involving both a property and a sales tax.
“This wasn’t my first choice,” Smith said of the sales tax proposal and his thoughts behind the new idea. “Why can’t we spread the burden more across the board?”
Smith’s latest proposal would involve one ballot question asking voters to raise property taxes by 56 cents per $1,000 assessed valuation exclusively for operation of the jail and a separate question asking for a 2 percent sales tax on all goods, exempting only food and medical items.
Smith told councilors they were the first to hear this, and Mayor Ron Hedenskog said he was a bit surprised to hear a new idea this late in the process.
“I was prepared to make a lot of comments this evening (about the 3 percent sales tax),” Hedenskog said. But you threw a wrench into it all. This is an introduction of an alternative I had not heard of.”
Neither had the other county commissioners.
“We haven’t even gone out and seen why the first one failed,” said Commissioner Susan Brown. “And we can put everything we want on the ballot, but if the citizens aren’t behind it, it doesn’t matter. We all know something needs to be done, but we need to look at more options than taxes.”
Smith said he plans to outline his new idea to county commissioners today at a special meeting addressing the 3-percent sales tax option.
County leaders have until June 29 to submit any language to the clerk and then the state to get a sales tax question on a ballot sometime this fall. In the meantime, they have yet to determine a final rate, if it would be temporary or not — or even on which ballot it would be placed. A second hearing is scheduled for today (June 26), when final changes could be made.
The proposal as stands would impose a 3-percent tax on all goods with numerous exemptions, and bring in a projected $5.73 million to county coffers in its first full year.
If approved by the board of county commissioners, it would be the second proposal to be put before the voters this year. They rejected a split-rate property tax levy measure May 21.
Smith’s new idea could not meet state deadlines for a September ballot anyway, as law requires two public hearings, at least 13 days apart, to be held first.
His idea is unique, he said, in that, while state law forbids one ballot question to pose two tax questions, they would be tied to each other in a way that, if one question failed, both would. He admitted he’s not yet sure that linking the two questions is legal.
Land and goods
The 56-cent property tax increase, he said, would generate $1.3 million to operate the jail, and the sales tax would generate the remaining funds needed to keep the county operating. The county is in a fiscal conundrum, operating the 2013-2014 fiscal year on a $2.1 million budget since federal timber subsidies ended this year.
Smith said the portion of his new proposal addressing property taxes more fairly spreads the tax burden, which many say failed in May because the split rate between city and unincorporated area residents wasn’t wide enough.
“The jail is needed by folks in incorporated cities and unincorporated areas,” Smith said. “Fifty-six cents is not enough to fund all public safety, but I know it’s important for the cities to have jail services. This allows you to ‘split the baby’ — spread the burden across a broader spectrum.”
3 percent solution
City councilors preferred addressing questions they had about the proposed 3-percent sales tax, including the rate and if it could be lower, if the measure is to be sunsetted or should be made permanent and the time they feel is needed to educate the voting populace before anything is put to a vote.
“Every month we wait past November it costs $400,000 to run the county,” Smith said in touting a September election. “Every quarter is $1.2 million.”
Smith also prefers a September election because the longer the delay, the more money the county will have to borrow from its road fund — and because Port Orford is set to ask voters on the November ballot to reinstate its property tax that funds police enforcement.
“You can have as many measures as you want on the ballot,” Smith said. ‘But the more you have, the more likely they are to all fail. It isn’t like majority wins.”
But city councilors indicates the sales tax — or any other measure proposed — needs more time to flesh out.
“We were in a hurry to get the last one on the ballot,” said Councilor Kelly McClain. “It would be one thing if we were in a state that had a sales tax. This is a big deal.”
Others said they were concerned about ramifications and perceptions from the large clientele of California citizens who travel to Curry County to avoid sales taxes.
“We’d be the only county in Oregon that has a sales tax — that’s kind of scary to me,” McClain said. “I like the concept, but it’s a pretty major change. It’s a big commitment.”
Smith said the sales tax idea, originally proposed by last year’s citizens committee, has been vetted in three public hearings.
“It’s not really rushed,” Smith said. “They spent months working with the Department of Revenue, this had three hearings — this thing is pretty much baked. As far as throwing it out there rashly, this has already been heard by citizens of the county.”
“I can see a lot of issues — cost, fraud,” said Councilor Brent Hodges. “I read through this and I can’t tell if my business is included or not. It’s like we’re jumping right out of the fire, grabbing something else and jumping right back in. September is too soon.”
“Mr. Hodges, after July 2014, the county will have $800,000 to operate,” Smith reiterated. “There will be no money after July of next year.”
Councilors agreed they didn’t have the time to even list their concerns in a letter by June 25, as Smith was requesting, much less approve the measure as proposed.
Councilors also questioned the newly-proposed sunset date incorporated in the latest draft of the sales tax question, which says the tax would expire in 8.5 years, getting the county through until the end of fiscal year 2021.
“The sunset was put in at the last hearing to allow the citizens to walk around it for awhile to see if they like it, or if a law enforcement district can be built (in that time),” Smith said. “It could be a permanent solution. There is no reason in 2018, after four years, to put another ballot measure out to make it permanent.”
The council indicated it prefers a permanent tax, citing the $500,000 cost to get it started in a state that’s never had a sales tax before, the burden on merchants, and the possibility that all would be for naught — notably the hiring and subsequent laying off of the three to five staff needed to administer the operation if voters later decided to allow the tax to sunset.
“You’re not even confident enough in the solution,” McClain said. “We need to put out something that’s going to fix the problem and move on. I don’t want to be dealing with this in eight years.”
The council decided not to submit a letter of support or one listing recommendations — there was confusion among council members as to what Brock was asking them to approve — to show voters the county had consensus with the cities.
Citizens voiced their opinions against the tax and frustrations with the process, as well.
“I have not found anyone in favor of this,” said Sandra Ensley of Brookings. “I can’t see anyone going for it at all. It’s a waste of money to put it on the ballot.”
“If this tax goes through, I’ll have to shut my doors and move,” said Bob Pieper, owner of Hearth & Home. “It will kill my business.
“And tonight he (Smith) has a new sales pitch,” he added. “And the sunset. The first time I heard three years, then five, now an eight-and-a-half-year deal. These guys don’t know what they’re doing and they want us to vote for it. They just want more money. I beg of you to wait. Let’s do it right. Let’s wait before we jump on the next bandwagon.”