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Fundamentally Unfair

City fee proposal has unintended consequences

Economic injustice permeates our local, state and national tax policies. The proposed city service fee reinforces and expands what is already a grossly unfair tax burden for low and middle-income wage earners. Not only is Ballot Measure 20-211 unfair, but it fails to deliver on the promise to fund essential services beyond the 2014 budget, and it’s permanent. 

Like many of you, we strongly support the services that are threatened for cuts in the 2014 budget. Throughout our individual tenures, we have always been loyal advocates for funding essential city services. 

Many voters are justifiably concerned that important services could be cut and might be persuaded to overlook the extreme unfairness of the fee in order to protect the threatened services like library hours, Sheldon Pool, Fire Station #2, police investigation, CAHOOTS van #2 and Station 7. 

Unfortunately, voting for 20-211 will not preserve the threatened services beyond Fiscal Year 2014 because they are not specifically listed in the ordinance which becomes law if approved by voters. Those services are only “promised” funding via a council motion which states “if there is additional revenue, the proposed FY 14 budget will include funding for these services.” And that is followed by the list of targeted services and their dollar amounts. That list is not in the law. 

This means the city has only committed to funding the threatened services for one year. After that, the law permits the reassignment of the new revenue to a broad variety of General Fund activities and reserves. 

A “yes” vote for 20-211 enacts an ordinance that establishes a tax that can be used for almost any general fund purpose and need not be used to sustain the listed services. The current council can express the most earnest wishes that it should preserve these services, and they can write these services into the FY 14 budget. But this and future councils can (and probably will) allocate the funds differently after 2014.

Voters should not be afraid to vote against the measure. The money is there to avoid the threatened cuts, and the political will to carry out the cuts isn’t. 

A majority of councilors oppose the fee, and only two councilors have stated publicly they will vote to eliminate services if the fee fails. Others have said they would do what they could to preserve the services.

The money is there to fund the services, but the fiscal emergency is concocted. 

The city has always practiced the standard policy of reserving two months of operating expenses for a reserve — but they’ve unnecessarily upped that to three months. Adhering to the standard two-month policy would free up an additional $10.5 million to fund the services. 

The city habitually underestimates the amount of revenue from property taxes during budget adoption, typically by 3 to 4 percent. Usually it amounts to $4 million to $5 million, which can also be used to fund the services. 

The Riverfront Urban Renewal District (URD) was established in 1985, supposedly to create 900 jobs. Since then it has skimmed millions of dollars away from the city’s General Fund and hasn’t delivered as promised. It has a $6 million balance (down from $10 million in 2010) which would become immediately available upon termination. Just end it and transfer the city’s share of the money back to the General Fund for services. The state of California has recently concluded that URDs are destructive to local governments’ ability to provide services and they terminated 400 URDs. 

The proposed fee would charge up to $120 a year on every household unit and $360 for every business, regardless of income or ability to pay. It would raise up to $14.4 million in order to fill the alleged $6 million gap. A senior pensioner in an apartment would pay the same as a wealthy person in a mansion. The woman who rents 100 square feet for a shoe repair business will pay more than Walmart pays because she will pay for both her business location and her home. 

Nor should you be reassured by the as-yet-unformed plan to offer low-income assistance. The city of Eugene has 21,000 households (averaging 2.25 people) that earn below $25,000 per year. Half of all households make below $50,000. Income does not always determine need, depending on other factors — especially extraordinary medical expenses. These programs are notoriously difficult to set up and expensive to run, and are often abandoned once voters have forgotten the original reassurances. And future councils cannot be bound by the current council’s good intentions.

Good intentions cannot make up for the fee’s fundamental unfairness. For instance, proponents have said that the low-income program would likely be based on food stamp eligibility, but that would fail to capture many who might otherwise need assistance. In an Elder Law Journal article, attorney Katelyn B. Randall reports that, “According to Nancy Week, MSW, Food Stamp Outreach Coordinator for the Oregon Hunger Task Force, only one in three eligible elders actually receives the food stamps they deserve. “

Less widely recognized is the fee’s negative impact on nonprofits, who are not exempt, and who are already struggling due to recessionary dips in contributions. It would be $360 per year, or more, if they have programs at multiple locations (such as Looking Glass).

To conclude, the city does not know how much the proposed fee will cost to administer, or even how they will process and bill for the charge. Their plan for low-income assistance is devoid of substance, and its parameters are not codified in the law. 

Ballot Measure 20-211 was hastily assembled and will have many unforeseen consequences — permanently. It won’t protect valued services in perpetuity, and the money is already there to fund the services without the additional revenue. We urge you to vote no on the city service fee.