County clears income tax for May ballot.

Byline: Matt Cooper The Register-Guard

CORRECTION (ran 12/3/2005): A public hearing on Lane County taxes for public safety will be at 1:30 p.m. Jan. 11 in Harris Hall at the Public Service Building, 125 E. Eighth Ave., Eugene. A story on Page A13 Thursday reported the wrong time.

The Lane County commissioners on Wednesday unanimously approved putting a new income tax before voters in May, to raise $73 million annually for a public safety system they say is failing.

Highlights from the meeting: Rough estimates indicate a tax rate of 1.3 percent to 1.4 percent on personal income and business profits. Property tax relief would flow not just to homeowners but renters, too.

And a potentially volatile caveat: the possibility that property tax relief that the county gives could later be eaten up by other local taxing entities - thus eroding one selling point for the income tax measure.

Unable to stop the chronic problem of costs outpacing revenue, commissioners will ask voters to approve a package that would pay for the current public safety system and add $27 million annually in new services to fight methamphetamine abuse, add jail staff, prosecute more crimes and add more prevention programs.

"After widespread agreement by (a task force of elected officials), unprecedented town hall and public meeting testimony, it's clear methamphetamine use and the crimes committed in its wake must be stopped,' Commissioner Faye Stewart said after the meeting. `That was the motivating factor for just about everyone in addressing public safety funding."

But the proposed income tax tab is significant. For an individual with $35,000 a year in taxable income, the estimated tax would be $455 to $490 a year.

In return, commissioners want to offer a property tax cut of $1 per $1,000 of assessed value; on a house assessed at $150,000, that's $150 a year. Commissioner Bill Dwyer suggested that, depending on one's income and property value, a taxpayer could actually save money by voting for the measure.

But Dwyer also stressed this: If Lane County lowers the amount it collects in property taxes, other taxing groups may try to add to their property tax rates, thus reducing the savings to county taxpayers.

Oregon's tax system caps the amount that governments can levy. If the county reduces what it collects in property taxes, it makes room for other governments to tax more, officials said.

Stewart acknowledged that scenario is possible but said any effort by other taxing entities to raise tax rates faces the considerable task of winning public support.

"It's not just going to happen lightly," he said. "Citizens are going to have to make a decision and vote for it."

The commissioners said they plan to ensure that no one is unfairly taxed on both personal income and business profit, and they will consider tax breaks for people of low income and those who are renters.

Homeowners would benefit from a property tax cut and so would landlords, officials said - but they don't expect landlords to pass on their own property tax savings by lowering rent.

The commissioners will hear from the public in January, after which they'll fine-tune the tax package and approve it as an ordinance. The ordinance would only take effect if voters approve a change to the county charter in May, which would ensure that only voters could ever change the tax rate.

The commissioners also agreed that the tax rate should be set high enough to account for the chance that the federal government will stop payments of $20 million annually to the county general fund for federal forestland here that the county can't tax. That dilemma won't be resolved until next year at the earliest, but if the federal payments are renewed, county officials said they won't collect an equivalent amount on the income tax.

Some contend that it's better to wait for the funding picture to clear before seeking new taxes. But Stewart disagreed, predicting that there would be complaints if the commissioners raised taxes, lost the federal money and then couldn't provide all of the new services that people had voted to support.

"It's prudent to look for the future," he said.

The money would be used to target meth producers, dealers, users and property criminals, reduce family violence, expand drug treatment programs and provide programs to prevent illegal drug use and crime.

WHAT'S NEXT

The Lane County commissioners will hold two public hearings on proposed income taxes

to pay for public safety:

7 p.m. Jan. 4, Harris Hall, Public Service Building, 125 E. Eighth Ave., Eugene.

7 p.m. Jan. 11, same address.

For more information, call 682-4203.