By Larry Coonrod, Lebanon Express writer | Posted: Wednesday, August 20, 2008 12:00 am
The Lebanon School Board on Monday deferred any action on the possible implementation of an excise tax on new residential and commercial construction until greater public input is obtained.
The legislature passed Senate Bill 1036 during the 2007 session. It gives school districts the authority to levy a tax of up to $1 a square foot on new residential construction and 50 cents on non-residential construction. The tax on non-residential property is capped at $25,000.
The law exempts some structures such as private schools, churches, public buildings and low income housing.
Since the bill went into effect last September, 38 school districts have adopted the tax, according to David Williams, legislative and public affairs specialist for the Oregon School Board Association.
The tax would be paid at the time a building permit is issued. Money collected from the tax is dedicated to capital improvement projects.
Williams explained the general guidelines and the rules for how the money can be spent during a presentation Monday night.
"The most significant point of 1036 is that for the first time in decades the legislature has decided to return some level of control to local authorities," Williams said.
Williams likened the tax to a systems development charge that would let new developments pay for the extra burden they place on local infrastructure, in this case schools.
Although the amount of money collected would not be enough to pay for a new school, it could help cover the costs of new school construction not covered by bond revenue, such as computers and shelving, Williams said.
At the recommendation of its Building and Boundaries Committee (BBC), on Aug. 4 the board adopted a five year facilities plan, a required step to implement the excise tax. Committee chair Tom Ayala shared details of the plan on Monday.
Priorities include roof repair and replacement and exterior painting of several schools, carpet replacement at all schools, landscaping at Green Acres, replacing the district's synchronous clock system and maintaining a contingency fund for emergencies.
Growth and enrollment trends compiled by the committee show the district 1,039 students short of capacity with a growth projection of 372 more students starting in about five years.
"We can't predict the future, so we have no real way of knowing when we'll need additional space, but it's 100 percent certain we will," Ayala said.
The committee is recommending the district purchase an 85-acre lot near Seven Oak Middle School to hold as the site of a new consolidated campus that would include grades K-12.
"If we purchase the property now as a future investment, it will require less bond funding at a later date,"Ayala said.
Only three members of the public, all real estate professionals, attended Monday's presentation. Don Robertson and Sherrie Ellis of Heritage NW Real Estate in Lebanon and Amanda Dalton of the Santiam Board of Realtors urged the board to consider the consequences of imposing the tax and to get more feedback from the public.
"This is nothing more than a sales tax," Robertson said. "You can call it what you like, but it's still a sales tax."
Robertson said builders would simply pass the cost on to buyers. In a tight credit market realtors are having a hard time qualifying even buyers with good credit.
"We have to be very careful about how we structure this," Robertson said.
Building and Boundaries Committee member Catherine Watts said that in moving forward the district would need to educate the public that the excise tax is not a replacement for future bond levies to fund new school construction.
School board chair Josh Wineteer said after the meeting that Superintendent Jim Robinson has agreed to work with the BBC to get wider input from the community.
More specific directions on how the district intends to move forward on the excise tax issue will be given at the Sept. 2 board meeting, Wineteer said.