City Attorney Jim Brewer had some interesting comments about Oregon’s lack of a sales tax during his report at last month’s Philomath City Council meeting. Brewer attended an International Municipal Lawyers Association summit in early August in Columbia, Missouri, a gathering that attracted lawyers from around the country.
Brewer said such events are good for looking for solutions to problems that we may have back here in Oregon. One of the topics that I'm sure is a part of any of these events is lack of money.
“I’d have to say, across the country, people are — I think gobsmacked is the word — that we have no sales tax,” Brewer said. “That 70 percent of most local governments’ general funds are sales tax-based and what they’re concerned about is anything that might reduce commercial activity.
“A lot of the regulation is based on how do I get those people here and what’s the incentive that we do for that? The idea of relying on property tax just seems laughable to them.”
“They are intrigued with home rule in the form that Oregon has it; we have a reputation for having very strong home rule,. Many of our peer entities may only do those things that the state expressly authorizes. And what they have found everywhere, and I think this was a unanimous thing, is state legislators have no interest in local government and in general, think of local government as a way to get money for the state.”
After hearing a few groans.
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“And that’s the way everyone reacts,” Brewer replied.
For those that need a definition of home rule, it’s basically “the right to local self-government.” Although that sounds good for cities, the state does pass laws that pre-empt local authority. Example? Cities don’t have the authority to tax tobacco products or alcohol. Oh yeah, we also have that whole SB 1573 matter.
Oregon has no sales tax on any items but reportedly has one of the higher tax rates on personal income in the nation. Counties and cities have the right to impose a sales tax at the local level and there are two cities — Ashland and Yachats — that have a voter-approved 5 percent food and beverage taxes that primarily affects restaurants.
Ashland voters first OK’d its local tax in 1990 to help fund the costs associated with the construction of a wastewater treatment plant and to purchase property to be used for parks. Voters renewed it in 2009.
The food and beverage tax in Yachats dates to 2007, approved by voters to also pay for a wastewater treatment plant.
Ontario recently attempted to implement a 1 percent sales tax to balance its general fund and maintain services. The city council approved it, but a petition landed it on the ballot where it failed among voters by a 2-to-1 margin.
No opinion here really, only interesting perspectives offered up by the city attorney and some information about sales tax and home rule authority.