Jessica Cejnar Andrews / Wednesday, Jan. 5 @ 3:18 p.m. / Local Government, Oregon
Curry County Commissioners Mull 2 Percent Consumption Tax With 'Kicker' For Residents; Tax Could 'Plug the Hole' in County's $2 Million Deficit, Treasurer Says
Curry County commissioners gave their treasurer the green light to develop a consumption tax measure for the November ballot that could address a $2 million deficit in the county’s budget.
County Treasurer David Barnes — citing a Dean Runyon Associates report stating that tourists spend $200 million annually in Curry County — said a 2 percent consumption tax on those sales dollars could generate $4 million for the county.
Speaking before commissioners on Tuesday, Barnes proposed that 55 percent of the revenue generated through a consumption tax go to the county’s general fund. Thirty-five percent would be returned to Curry County citizens in the form of a kicker, or rebate, he said, and 10 percent would be used for tax collection and administrative costs.
“If we collect $4 million in taxes, that would put $2.2 million back in the general fund of this county,” Barnes told commissioners. “Later on today, you’re going to be having a meeting about the lack of revenue and our $2 million short fall and to protect the road fund. This is a plan that provides you with that $2.2 million you need. This is perpetual. This is self-sustaining.”
Barnes' consumption tax proposal came before the county’s finance director, Brad Rueckert, proposed finding a way to cover seven or eight vacant full-time positions short of hiring new employees.
It also came before Commissioner Court Boice proposed setting a moratorium on budget transfers from the county’s road reserve fund for “non-Road Department purposes” once it dwindles down to $20 million. Curry County’s Road Reserve Fund currently holds $29 million, according to Boice’s staff report.
Tasked with figuring out a consumption tax for Curry County that wouldn’t impact residents, Barnes said he used U.S. Census data, which shows a breakdown of household expenditures by year, pulling out expenses he considers non-essential. Those include alcohol, household apparel and services, including gift shops, restaurants, hair care products and vehicle maintenance needs, he said.
Curry County residents spend about $5,800 a year on those items, Barnes said, which equates to between 9 and 9.5 percent of normal household spending.
Barnes also mentioned the Oregon tax rebate, or kicker, which is issued to individual and corporate taxpayers when a revenue surplus exists. If the $5,800 Curry County residents spend on non-essential items is taxed by 2 percent, a family of four would receive a kicker of about $254, Barnes told commissioners. Individuals would receive a $63.64 rebate, if voters approve the consumption tax measure, he said.
“The way I envision this is this would need to come up as a ballot measure,” Barnes told commissioners. “When you vote on it, on the ballot, if you vote yes you’re registered and a form gets created and you become registered to receive the kicker.”
Noting there are 22,000 residents in Curry County, Barnes said if only 15,000 people registered for the kicker, he proposed allocating the kickers from the remaining 7,000 to the Curry County Sheriff’s Office.
Barnes said he also considered creating a program that would enable residents to donate their rebate to a local veterans group or a housing group.
Barnes said he would form an ad-hoc committee to develop the proposed consumption tax measure so it could be included in the November 2022 general election ballot.
Boice, pointing out that many Del Norte County residents do their shopping in Brookings, taking advantage of the lack of a state sales tax in Oregon, said Barnes would likely get feedback on the proposed consumption tax from travelers as well as local businesses.
“I think if we sell the plan on the basis of what you just communicated, I think it’s not going to be a hard sale as, generally speaking, a tax,” Boice said, adding that recreational marijuana should also be subject to a consumption tax. “We’re all in agreement that property tax is going nowhere. We’re all in agreement we need to get our financial program in order here at the county level so we develop a trust.”
Boice said he had proposed a 1.5 percent consumption tax in the past that would have generated $3 million for public safety, public health, streets and to replenish the county’s reserves. Boice said he supported Barnes’ proposal, but community involvement on how those dollars get spent is necessary.
Barnes noted that two years ago the county implemented a transiency lodging tax, which has generated more revenue than it anticipated because of an influx in tourism.
“What I’m looking to do with this (consumption tax) is plug the hole in the general fund,” he said. “This does that. It’s self-sustaining as long as people keep coming here.”
Boice’s proposal to set a “cap” on Road Reserve Fund expenditures on non-road related items was met with skepticism from his colleagues and hostility from Curry County Sheriff John Ward.
Ward, who accused Boice of saying that the county would make a $600,000 to the sheriff’s department, said Road Reserve dollars can be used for patrol or the indirect costs associated with deputy patrol.
“We’re sick and tired of having to defend that every year,” Ward said. “We’re trying to keep the sheriff’s office whole so we can provide service to our community.”
Boice’s colleague, Commissioner Chris Paasch, questioned the legality for commissioners setting a cap on the Road Reserve Fund. He noted that commissioners had decided several months ago setting a cap on the fund.
“I want to make sure before we put something like this in place, that it’s legal,” Paasch said.