A payroll tax is paid by employees, self-employed persons, and/or employers and is usually calculated as a percentage of gross payroll or wages. Learn more about the Community Safety Payroll Tax.
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The Community Safety System works to keep everyone safe. This system is made up of interdependent City departments and community partners. Each relies on the other in different situations.
Our Community Safety System is stressed:
The Eugene City Council passed the Community Safety Payroll Tax Ordinance (No. 20616) in June 2019 to provide long-term funding for community safety services. The Community Safety Payroll Tax is expected to generate funds to provide faster, more efficient safety responses, deter crime, connect people to services, engage and help at-risk youth, support more investigations and court services, and add jail beds to reduce capacity-based releases and hold those who commit crimes accountable.
A Community Safety Revenue Team was formed to develop a funding recommendation for the City Manager. The Revenue Team included three City Councilors, current and former Budget Committee members, and the Chair of the Police Commission. The revenue team studied many different types of funding options, ranging from levies to a combination of other taxes or fees. You can see the list and analysis of all revenue alternatives considered in the Revenue Team’s Final Report. Also see key discussion points from the Revenue Team’s recent analysis of two specific alternative funding options: River Road/Santa Clara Annexation and a City personal income tax.
The team took into consideration the amount of money needed, the administrative effort and potential costs, and the stability and reliability of the funds. They also considered the fairness of the different options, their feasibility within Eugene and how the option related to the community safety need. The team also reviewed the potential economic, environmental, and social equity impacts – also known as the triple bottom line. They focused on a payroll tax as they concluded their research.
In the long term, gross payroll appears to be a sustainable and growing revenue source that can weather economic cycles and keep pace with general and wage inflation impacts on recommended service funding levels.
The measure passed by Council includes critical accountability requirements to ensure the funding is used as directed including:
To ensure accountability for the expenditure of Community Safety payroll tax, the City Manager has convened a Community Safety Citizen Advisory Board. This group will review the use of payroll tax funds and report on the City’s use of the tax revenue each year. In addition, after seven years the board will conduct a comprehensive review of the City’s community safety system, use of the payroll tax revenues, and compliance with the ordinance. All reports will be provided to the City Council and public.
Read more about the Citizen Advisory Board and see a list of members.
Yes, all employees earning wages and salaries within the City of Eugene would pay the employee portion of the payroll tax – including public employees.
Public employers would be exempt from the proposed payroll tax because intergovernmental taxation is prohibited. Without express authority, one government entity cannot tax another.
*The City Council has scheduled a work session on July 20 to review the Community Safety Initiative and talk about next steps with respect to investments in public safety. The council will also talk on July 20 about how to most effectively bring a broad array of perspectives and priorities into our discussions of structural change.
Allocation of Funds:
Funding from the local marijuana tax does support community safety. The local marijuana tax collected almost $1 million in 2018; that money supports parks security, Community Court, human services, and a portion has been set aside to fund homeless shelter options. Funding for a local option levy was also considered by the Community Safety Revenue Team, but a new levy would yield less than $10 million annually and isn’t considered a permanent funding source as a levy would need to be renewed every five years. These other options do not meet the funding needed to provide services for our Community Safety System.
The majority of city funds (78.3%) come from user fees and property taxes, which are primarily paid by city residents. There are some taxes that come from other sources to help provide the services used by residents, visitors, and others who spend time in Eugene. The local transient room tax, for example, is paid by people who visit Eugene and stay in a local hotel or similar accommodation. The local gas tax is paid by people who stop for gas in Eugene. While the people paying those taxes do not live or vote in Eugene, they do take part in the services provided by the city, including use of local roads, public safety and emergency services, and the cultural events and programs held in Eugene. Likewise, when Eugene residents travel or work outside of the city, they also contribute to local taxes in other communities.