The Corvallis School Board will take another run Monday at gathering public opinion on a proposed construction-excise tax, but the early reviews from Oregon school districts that already have enacted the tax are positive.

The Oregon Legislature passed a law in 2007 to allow Oregon school districts to raise funds for capital improvement projects by taxing new residential and nonresidential development. The tax is not meant to fund all of a district’s capital-improvement needs, but it could get the machinery moving on projects at the top of its “must-fix” list.

Statewide, less than a quarter of Oregon’s 197 school districts have enacted the tax, according to the Oregon School Boards Association.

Some districts were able to begin the tax as early as last fall after crafting the necessary agreements with five different governmental jurisdictions.

Newberg Public Schools superintendent Paula Radich said her staff met personally with major contractors in town to get their feedback. “None of them were really excited about it, but several of them felt it was appropriate,” she said.

Bill Knowles, business manager for the West Linn-Wilsonville School District, said citizens there were aware of the tax, but that few people expressed major concerns. “I think since it’s a one-time fee and it only applies to new construction, it just doesn’t affect a whole lot of people who are currently plugged into the schools,” he said.

Others said they did expect they might collect more than they have, but they were hopeful revenues would grow in the future.

Chuck Rhoads, business director for the Reynolds School District just east of Portland, said an improved housing market could boost revenue.

“Our history shows there’s always been an influx of new homes and I anticipate it will get better.”

“We might have estimated we’d get up to $500,000 a year when we were still growing, but we’ve not even received $100,000 yet,” said Darin Davidson, business services director for the Forest Grove School District. Though disappointed, he said, “Every little bit helps.”

Concerns in Corvallis

Some have worried about how the tax would impact the goal of providing more affordable housing in Corvallis and whether the amount of money it could raise is worth the risk of alienating developers and homeowners.

When Senate Bill 1036, the bill authorizing the tax, was passed, it had the support of the Oregon Home Builders Association. However, Jenn Smith, the new executive director of the association’s Willamette Valley chapter, says she will ask the school district to delay implementation of the tax.

“We’re fundamentally not against the tax per se,” Smith said. “We’d just like to see the district wait until the home building industry and the economy pick up again.”

The excise tax would be assessed at $1 per square foot on residential construction and 50 cents per square foot on nonresidential construction, not to exceed $25,000 per building permit or structure. The law does include several exemptions: Private schools, public buildings, hospitals, churches, agricultural buildings and construction that qualifies as affordable housing under U.S. Department of Housing and Urban Development guidelines.

Individual school districts can specify other exemptions. The Corvallis School Board is considering an extra exemption for construction related to property lost or damaged in a fire or flood.

The tax only applies to new square footage, so homeowners’ interior remodeling projects would not be taxed. Residential “accessory” structures that measure less than 200 square feet — such as a storage shed — also are exempt, because they don’t require a building permit.

Greg Verret, director of Benton County’s Community Development Department, estimates that the excise tax would typically almost double the fees a developer would pay when getting a building permit from the county. The same is true, according to the city’s formula, for assessing fees for new construction.

Both the county and city have worked with the school district to draft an agreement for collecting the excise tax. The law permits governments to keep 1 percent of the receipts to help recover the cost of administering the tax. Each building department would bill the school district directly for additional expenses it incurs.

The Corvallis City Council approved the mechanism for collecting the excise tax on Sept. 2, but Benton County commissioners have not yet voted on the issue, which is a requirement.

Dan Carlson, Corvallis’ development services manager, said the city wasn’t necessarily endorsing the tax by agreeing to assess the fees. “It just makes sense from the customers’ viewpoint, for us to collect it at the same time they’re paying the building department’s fees,” he said.

Revenue from the tax can only be spent on new construction or improvements to existing school facilities, fees for architectural and engineering consultants or the purchase of land for new school sites. It cannot be used for routine maintenance or operating costs.

Local school officials have identified $2.1 million in capital-improvement projects that should be done over the next five years but that rarely find their way into the annual budget. Among them are roof repairs, improvements to heating and ventilation systems and parking lot expansions.

“These are the kind of projects that wouldn’t get done unless it was an emergency if we didn’t have other funds,” said facilities manager Greg Lecuyer. “If a school’s boiler failed, certainly we would replace it. But that would have to come from the general budget and then something else would have to give.”