The Curry County Citizens Revenue Task Force last month took another look at the prepared-food taxes in Yachats and Ashland — the only two places in Oregon with such a tax — as part of a possible puzzle piece to solve the county’s financial woes.
The task force was convened in November to try to find permanent, sustainable revenue streams to boost the county’s general fund, which in recent years has forced county commissioners to scale back services and spin off entire departments to nonprofit organizations.
The group recently crafted a transient lodging tax commissioners hope to put before the voters next March that would charge a 7 percent tax on those staying in hotels and other accommodations in unincorporated Curry County.
It plans to address the feasibility of a tax on prepared foods — before going on to work on what Chairman Carl King calls “the Big Fix.”
Task force members agree a prepared-food tax would only represent a small part of the money needed to keep the county afloat — particularly in light of the cost of increased demands for services, replacing a jail that is long past its lifespan and a shortage of law enforcement.
Restaurant owners came out in force when such a tax was proposed a few years ago, citing the small profit margin in the restaurant industry and that the local economy was still emerging from the Great Recession.
Ashland and Yachats
The only two cities in Oregon that charge a tax on prepared food are Ashland and Yachats; each charges 5 percent.
The ordinances passed to enact the tax are almost identical, and define taxable food as “all prepared food items and beverages, excluding alcoholic beverages, served in a restaurant including ‘to-go or delivered orders; and all food in grocery stores, markets, convenience stores or deli sections of any store that is prepared for immediate consumption.”
Some of those include hot foods, pre-made sandwiches and salads and fountain drinks — and exempt whole cakes pies and loaves of bread purchased to eat elsewhere.
Frozen desserts at ice cream shops would be taxed, as well, unless the buyer purchased an item in excess of a half-gallon.
Restaurants are defined in state law as caterers, grocery store delis, bakeries, coffee shops, “mobile units” and “push carts.”
Food that is delivered is taxable, as well.
Exemptions include those buying food through the Women, Infants Children or Supplemental Assistance Program (WIC and SNAP, respectively) and Meals-on-Wheels. Also exempt are items purchased in vending machines, or sold through “temporary” restaurants such as food stands, booths, street concessions and similar places operated by nonprofit organizations or service clubs.
Ashland has had its prepared-food tax in place since 1993, and last year collected about $3.1 million. The bulk of it goes to fund debt on the city’s wastewater treatment plant, and of the remainder, 25 percent is dedicated to parks and open space and 73 percent to street maintenance and 2 percent to the city for oversight.
That city’s ordinance expires in 2030 unless voters reinstate it.
“People are supportive of it because of what the purposes are,” said Mark Welch, finance director. “You need wastewater treatment plants, you need streets, and we value parks.”
Yachats implemented its 5 percent tax in 2007 and collected $365,000 last year — “quite a bit, and rising,” said City Council President Max Glenn. The revenue goes toward debt for the wastewater treatment plant.
Unlike Ashland, it had some voter backlash.
“At the beginning, we had quite a little bit of resistance,” Glenn said. “I traced it down — the state restaurant association fought it. They rented a local post office box and sent mailings out as though they were local.
“They just didn’t want another tax,” he said, adding that the idea itself was spurred by a restaurant owner. “And we still have some complain, but it’s not a big deal. You have to expect that.”
Hood River is also debating a yet-to-be-determined tax rate and proposing the revenue generated be unrestricted use in the general fund or alternatively, public safety services, health services and maintenance of county roads and bridges.