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Don’t Tax Me! Various Elections, Same Results

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Amount spent by Jackson County on March special election to implement a 25 percent tax on marijuana sales, a measure the county commission is expected to negate: $105,614.22

Amount in marijuana sales necessary in Jackson County to re-generate those funds spent on a special election, if the county receives an expected three percent sales tax: $3,520,474

 

According to voters in a series of failed measures, taxes remain unpopular in Oregon. With only single issues on most ballots throughout the region, there was a surprising amount of venom (as in the type from the “don’t tread on me” snake) in early November ballots throughout the region.

The marquee prize fight was an initiative for a two percent sales tax floated by the City of Grants Pass.

In August, city council there submitted the idea for a two percent sales tax on goods in Grants Pass. The sales tax was a limited consideration, applying only to food and retail items, but unprepared food (like what is bought at the grocery store), prescription medicine and purchases over $1000 would have been exempt. Interestingly, the sales tax initiative also would have eliminated a $1.79 property tax per $1000 assessed value of a home—and, in many ways would have shifted the source of the tax revenue stream from homeowners to business-owners and retail consumers.

Property taxes for the average city home, points out the filing document for the initiative, would be reduced by $277 annually. Or, stated differently, a home-owning resident would need to spend more than $14,000 in non-grocery or medicine retails items (and all purchases under $1000), before the sales tax would have cost him or her more than the property tax which would have been eliminated.

But, by the sound of things—and the widespread appearance of anti-sales tax signs in storefront windows throughout Grants Pass in the past few months—you might have thought King George was coming.

“The sales tax was designed to eliminate property tax and jail fee,” explained David Reeves, the Assistant City Manager in an interview two days after the measure was thoroughly trounced by a margin of four to one voters (78 to 22 percent). “We put that out there a s a way to fix the system,” he continued, adding, “People still want the system fixed, but clearly not with a sales tax.”

The sales tax, according to city officials, would have mustered up about $8 million annually—an amount of funding that city officials say they will need to find elsewhere. “(The sales tax) was one of the ways to fix the system,” said Reeves, “but not the one we’re going to use.”

When asked whether city council had conceived of a Plan B or Plan C, he responded with a laugh: “Not yet.”

For an off-year and single-issue ballot, the notoriety of the sales tax proposal motivated a relatively healthy voter turnout in Grants Pass—just over 50 percent. Meanwhile, in Coos County, a multi-issue ballot attracted a paltry 27 percent of voters to express their opinions. But that opinion expressed was decidedly Libertarian. Ultimately, voters there approved 61 to 39 percent a so-called “Second Amendment Preservation Ordinance,” which bans the use of any county funds to enforce state background checks for gun purchases. It is an ordinance that is both telling about opinions on gun ownership, and also raises intriguing questions about various jurisdictions and shuffles levels of laws, as it potentially pits county law against state law under the banner of federal law.

The other measure on the ballot for Coos County failed by 5 percent. It would have imposed a ten percent tax on short-term (30 days or under) guests in hotels, campgrounds, RV parks, and other short-term places to stay.

Like the failed sales tax ordinance in Grants Pass, the lodging tax in Coos County would have shifted some of the financial burden from residents to tourists. (So-called Transient Room Tax are common throughout the state, with places like Portland and Bend collecting roughly 12 percent, and Grants Pass nine percent.) In Coos County, it was expected that the so-called Transient Room Tax would have generated $1.7 million annually—funds partially for promoting more tourism, and partially for county services.

Voters in Gold Hill also strongly expressed their displeasure with taxes, with 77 percent stifling an attempt to ratchet up property taxes there—essentially choosing lower property taxes over increased public safety, as the proposed property taxes would have paid a contracted officer from the Jackson County Sheriff’s Department to serve as a city police officer. The proposed increase property taxes was an additional $2.64 per $1000 assessed value; with the current median sales prices in Gold Hill at $185,000 that property tax would have translated to roughly $500 additional property taxes each year—or, the equivalent to a home-owners or auto insurance deductible for replacing any items taken in a robbery.

And, finally, an aberrant tale of voters approving a sales tax: In March, Jackson County promoted a voter initiative to tax the sale of recreational marijuana at 25 percent, even though the State of Oregon had declared that such taxes would not be allowed—and, subsequently, limited county and city taxes on marijuana to no more than three percent. Bucking the trend of voting against taxes, residents in Jackson County approved the tax on marijuana.

But now, seven months later and with no taxes collected, that hefty 25 percent weed tax is being wiped off the books. As the tax runs foul of state law, the Jackson County Board of Commissioners was set to consider a final voter to repeal the marijuana tax approved by county voters on November 12, after press time.

The cost of that special election in March? $105,614.22.

Or, stated differently, if the tax is recalibrated into existing allowances (three percent for local taxes), more than $3.5 million in marijuana will need to be sold in Jackson County just to recoup the funds spent on the special election—and that’s not even calculating what a second ballot initiative will cost the county for voters to approve a three percent tax.  

 

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