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Will City Tax Save Schools?

A local movement for a city income tax on upper incomes to help local schools has run into opposition from The Register-Guard and conservatives who argue that it is unlikely to pass.

But a very similar income tax passed in Eugene this year by a three-to-one margin. In January, the state Measure 66 income tax increase on those earning more than $250,000 passed with 73 percent support in Eugene.

In addition, local voters have repeatedly shown strong support for schools, repeatedly passing local tax increases by two-to-one margins. A web survey by School District 4J last month found three-fourths of the 1,999 respondents supported a city tax for local schools.

Eugene Mayor Kitty Piercy has announced a public forum on the possibility of a city tax for local schools on Tue., Dec. 14 from 7-9 pm in the council chamber at City Hall.

The forum will examine the possibility of a sales tax instead of an income tax (city property taxes for schools are legally prohibited). But sales taxes hit the poor harder than the wealthy and have failed over and over in Oregon and Eugene by wide margins.

Statewide sales tax measures have failed nine times in Oregon, often by huge margins. In the last attempt, a state sales tax targeted at school funding with reductions in property taxes, exemptions for groceries and tax credits for the poor failed by a three to one vote statewide in 1993 and by a two-to-one vote in Lane County.

In 1993 a Eugene sales tax on restaurants failed by a 20 percent margin with strong opposition from restaurant owners.

Sales taxes take a larger share of income from the poor than the wealthy as the poor tend to spend all their incomes, while wealthier people have the luxury of savings and investment, research has found.

There's also some discussion of a less progressive local income tax that would reduce rates on the wealthy by targeting the middle class. Saving upper income people money may win a few conservative supporters, but could lead to defeat at the polls, especially with lower-wage people struggling in the recession. In 1999 a flat income tax proposal from Lane County to fund the jail by targeting the poor and middle class failed by a wide margin.

A city income tax on incomes above $100,000 would raise roughly $14 million for each percentage point of tax, according to EW estimates based on state tax data.

While, there's some discussion on exactly what tax to propose, there appears to be broad support for the importance of saving local schools from draconian budget cuts.

A city press release on the City Hall forum next week states: "Good public schools keep a city vibrant and healthy. Businesses need them, both as an immediate source of workers and as a means to attract employees to Eugene. Professionals considering relocation here often focus as much on the quality of the schools as on salaries and benefits being offered. Good schools raise property values and help reduce crime."