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South Lane schools authorize new construction tax.

Byline: Karen McCowan The Register-Guard

COTTAGE GROVE - The South Lane School District has joined west Eugene's Bethel district in authorizing a tax on private construction projects to help fund school construction, improvements, furnishings and technology infrastructure.

South Lane's school board voted 5-1 Monday night to take advantage of a new state law allowing school districts to levy 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. Under the action, the district would begin collecting construction taxes on Jan. 1.

The Legislature authorized the tax last spring after the Oregon Home Builders Association endorsed the bill. Concerns raised by Cottage Grove area home builders, however, led the school district to scale back plans to take full advantage of the new funding source. The tax approved by the board will be phased in over two years for residential construction.

The school district still plans to immediately begin taxing new commercial and industrial projects to the full extent allowed by the law. One motivation for South Lane quickly enacting the tax is a pending application by Wal-Mart to add 69,000 square feet to its Cottage Grove store and to build an additional 30,000 square feet of retail space at the front of its property along Row River Road. Those projects alone could net the district $40,000. (The Cottage Grove Planning Commission's public hearing to review Wal-Mart's proposed design for those projects, originally scheduled for tonight, was postponed until January.)

Superintendent Krista Parent said the idea to impose the tax on housing construction gradually came from local home builders.

"When we first discussed this at our Dec. 3 meeting, we had quite a few local builders question the timing," she said. "They've been school district-friendly partners for a long time - several of them were behind passing the (2000 construction) bond for the high school. But they said the economy for building already stinks right now, and that this tax would hurt small home builders at a time when the housing market is already down."

After the school board put off a decision based on that testimony, Parent said, a group of builders "came back to us and said, `What about some sort of graduated rate?'?"

After making sure it was legal to reduce only portions of the tax, the South Lane board voted to tax residential construction at 25 cents a square foot beginning Jan. 1, 2008. The rate would increase to 50 cents a square foot July 1, 2008; to 75 cents a square foot Jan. 1, 2009; and $1 a square foot July 1, 2009.

Parent said the district has signed an agreement with the city of Cottage Grove to collect the tax on building projects within the city limits but was still negotiating a collection agreement with Lane County.

County officials met with county school superintendents Tuesday to discuss a plan for collecting the taxes for all 16 Lane County school districts. Most area districts have begun discussions of how and when to levy such taxes.

The Oakridge School Board on Monday night postponed a decision on the same matter for the second time. During initial discussions of the tax last month, a local small business owner said the tax was regressive and would hamper development in a community already economically depressed.

"We've struggled with declining enrollment, so we don't want to do something that will keep our community from growing," Oakridge Superintendent Don Kordosky said.

He said the district had already proposed exemptions for assisted living facilities and for additions of less than 1,000 square feet to existing homes.

Revenue from the excise tax could pay for land acquisition, construction or improvements, furnishings and technology infrastructure.
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Title Annotation:Education; The district will begin to levy fees on new homes or additions and commercial or industrial development on Jan.
Publication:The Register-Guard (Eugene, OR)
Date:Dec 19, 2007
Words:628
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