County to pursue 3 percent sales tax

By Jane Stebbins, Pilot staff writer June 07, 2013 08:05 pm

A 3 percent sales tax proposed by the Citizens Committee last year is rising like a phoenix from the ashes of the property tax measure that died at the polls May 21.

County commissioners agreed at a regular board meeting Wednesday to pursue a sales tax measure on the September ballot, citing the lingering need to solve Curry County’s financial crisis and the possibility that voters might be more amenable to a tax on purchases than one on property.

A 3 percent sales tax proposed by the Citizens Committee last year is rising like a phoenix from the ashes of the property tax measure that died at the polls May 21.

County commissioners agreed at a regular board meeting Wednesday to pursue a sales tax measure on the September ballot, citing the lingering need to solve Curry County’s financial crisis and the possibility that voters might be more amenable to a tax on purchases than one on property.

If this proposal makes its way to the ballot, it will be the first time Curry County voters have been asked to approve a sales tax. But the Citizens Committee and Portland State University’s Kitchen Table Project survey indicated last year that voters could support one.

Measure 8-71, a split-rate property tax increase, failed 56 to 44 percent at the polls May 21. The measure would have garnered $4.5 million a year to fund public safety agencies, including the jail, juvenile services and sheriff’s road patrol.

The reinvigorated sales tax proposal, which commissioners hope to discuss with city mayors soon, will ask voters to implement a tax rate of 3 percent on all purchases except food bought in grocery stores and any medical purchases.

There was no indication if a sales tax would be temporary or permanent.

And even though the question is to be posed in a special election, there does not have to be a “double-majority” for it to pass, said County Attorney Jerry Herbage. A double-majority means at least 50 percent of registered voters must cast ballots, and the issue must win at the polls.

Again, the board is under a tight deadline to get anything on the ballot, as the first round of paperwork must be submitted to the county clerk by the end of June. It also must hold two public hearings, at least 13 days apart from each other, before that paperwork can be filed.

Commissioners plan to include the mayors of Curry County’s three cities in discussions before the first public hearing, slated for 3 p.m. June 12.

County commissioners faced the same kind of time line when they took office in January and crafted the split-rate property tax increase measure that failed three months later. Brookings Mayor Ron Hedenskog said the short time period under which Commissioner David Brock Smith had to craft the measure led to “fundamentally flawed” math in the measure presented on the ballot.

But last year’s Citizens Committee, in suggesting a sales tax among its 19 ideas to get Curry County solvent again, prepared all the data needed in preparation to place a sales tax measure on the ballot last November. The then-seated county commissioners, however, opted not to pursue it — or any other form of revenue generation that committee suggested.

“It’s ready to go,” Commissioner David Itzen said Wednesday. “The work has been done, and it appears there’s growing support for this in our community.”

Last summer, state Department of Revenue and Oregon Legislative Revenue Officer Paul D. Warner said a 3 percent sales tax, even with a long list of exemptions, would raise $5.04 million a year for Curry County.

Realizing they don’t have much time to educate the public about this tax measure, commissioners agreed they want to keep it simple and limit the number of exemptions. The Citizens Committee’s proposal last year listed an array of exemptions, from agricultural tools to meals served at hotel restaurants.

“By the time they were done with this it was almost time to get together and sing kumbaya,” said Commissioner David Itzen of the committee’s work. “But the merchants were starting to get confused. Do you tax a homeowner for building supplies for a house he’s building himself? Yes, but do you tax a builder who the homeowner’s hired to work on his house? It was complex.”

“They were worried it would be a nightmare for businesses,” said Commissioner Susan Brown. “There were columns and columns of exemptions.”

Fuel, liquor and tobacco would be exempt, as required by state law.

Commissioners did not say if the proposed tax would be permanent, although the Citizens Committee last year included a five-year sunset to make the measure more palatable to voters.

Itzen said proposing a 3 percent tax with exemptions instead of a 2 percent rate with no exemptions should eliminate the fear that a sales tax is regressive.

“But the work is done,” he added. “All we need to do is review it. I think it’s doable.”

Commissioners planned to contact the mayors of Curry County’s three cities to set a date to discuss details, but felt city leaders might find it amenable.

“”No one wants more taxes,” Itzen said. “But we have problems we have to fix. I think we have a well-crafted proposal that mitigates concerns citizens had (last year).”

“We could not come to agreement about any revised property tax measure,” Port Orford Mayor Jim Auborn told commissioners Wednesday. “We had one idea, (Commissioner) David (Brock Smith) had another, and we could not come to agreement on something we could mutually support. We might be able to support a sales tax. It may pass or it may not, but Plan A failed, so why not try Plan B?”

Itzen said visitors to the county could end up paying the bulk of revenue generated from the tax, especially in summer months when the population soars from 22,000 to more than 60,000.

He added he was glad the idea had unanimous support of the board, as the lack of unity among commissioners with the property tax measure is believed by some to be partially to blame for its failure.

“It helps if we all pulled the wagon in the same direction,” Itzen said. “We should remember that before we go out again for something.”

Brown suggested the board consider placing on the same ballot a measure asking for a countywide transient lodging tax, and while Itzen and Smith agree it’s a good idea, they said they were concerned about confusing voters and weakening the chances of anything passing. They might reconsider the idea for the November ballot.