Bethel construction tax goes into effect July 1.

Byline: Anne Williams The Register-Guard

It's taken almost five months to hash out the particulars but it looks likely that the Bethel School District's new construction excise tax will kick in July 1.

Senate Bill 1036, approved by the 2007 Legislature, allows school districts to impose a tax on residential, commercial and industrial development to help pay for school facilities.

Bethel, along with the South Lane and Oakridge school districts, voted several months ago to adopt the tax, pending completion of intergovernmental agreements with Lane County and with their respective cities.

While the South Lane and Oakridge districts quickly forged agreements with Cottage Grove and Oakridge and have been collecting the tax on properties within those cities, the agreements with the county and the city of Eugene have taken longer than expected.

"It's a long process for everybody to figure out a way to do it," Bethel Superintendent Colt Gill said. The county, for instance, has a system for collecting permit fees, but none for collecting a tax for another agency. "It's kind of a new approach," Gill said.

Of paramount concern to the cash-strapped county, especially, was the potential cost of providing the service.

"The one thing (the Board of Commissioners) said was, as everyone knows, with the current budget reality, it had to happen with the full cost recovery," said Matt Laird, the county's land management division manager, referring to the county's recent fiscal woes. "We certainly want to help these districts, but we can't lose money. We can't subsidize this."

Lane County has a draft intergovernmental agreement in place that could be adapted for any school district and Gill said an agreement with the city of Eugene is close to completion.

Through such intergovernmental agreements, cities and counties collect the tax, which can be up to $1 per square foot on new homes or additions and 50 cents per square foot (up to $25,000) on new commercial or industrial development. In return, the law says they can keep 1 percent to cover their costs.

County officials were concerned that wouldn't be enough. In their soon-to-be-finalized agreements with Bethel, South Lane and Oakridge, the districts could be billed for up to an additional 2 percent.

For Bethel, the tax, which would be collected at the time developers pick up building permits, would raise $1.2 million to $1.4 million over the next eight years, based on the district's conservative estimates. The funds could be used for land acquisition, construction or improvements, furnishings and technology infrastructure.

Other Lane County school districts considering the excise tax include Fern Ridge and Junction City. The Junction City district is seeking feedback from the community, spokeswoman Jill Case said, but no specific proposal is before the school board.

Fern Ridge hasn't formally adopted the tax, but is continuing to work on agreements with Lane County and the city of Veneta, Business Manager Olivia Meyers said.

David Williams, a lobbyist with the Oregon School Boards Association, said approximately 30 districts have either implemented the tax or are close to doing so. He said the intergovernmental agreement process has taken longer in Lane County than in most places, although he said all local governments share the concern about costs.

While some developers opposed the tax, it passed in the Legislature with the backing of the state's largest home-builder group, the Oregon Home Builders Association.