Ontario officials: Sales tax needed to cover costs

By Pat Caldwell

The Enterprise

ONTARIO — The city is on track to impose a 1 percent sales tax to bolster local services.

The new tax would produce between $3 million and $5 million a year and will be tailored to specific items, said Mayor Ron Verini.

“There are areas we are trying to hone in on and what should be taxed and what shouldn’t,” said Verini.

The tax will apply to most retail goods, Verini said. Such items as pharmaceuticals, vehicles, and agriculture products would be exempt. Products already taxed by the state, such as gasoline and tobacco, will not be part of the proposed duty.

The Ontario City Council hasn’t formally voted to impose the tax but Verini said there is general agreement to do so. The council doesn’t plan to put the issue before voters.

Last week the council directed Adam Brown, Ontario city manager, to prepare a sales tax ordinance for the council to vote on. A tax could be implemented as early as January if the council proceeds.

No city in Oregon has a sales tax, though Ashland and Yachats tax food and beverages.

Verini said the tax is about fairness.

“Instead of trying to receive all the revenue we need from 11,000 residents we have in our community or the property owners of our community, we thought about doing a small sales tax or excise tax that would be imposed on those 30,000 people who come into our community and utilize our streets, our police, our fire every day,” said Verini.

Verini said he hoped through a series of town hall sessions a viable revenue proposal would emerge. That didn’t happen, he said.

Council member Norm Crume said the reality is the city is short of money to pay all its costs.

“We have to have more money to operate the city,” Crume said.

Property taxes, which provide nearly half of the general fund total, are not keeping pace with climbing costs, Crume said.

“The increase in our general fund budget because of property taxes only makes it a 2.1 percent increase,” said Crume.

Crume said 10 years ago property taxes in Ontario generated roughly $2 million. This year, the city estimates it will collect nearly $3 million.

Still, the city has had to shed services to keep its budget balanced.

Crume said the city closed the golf course and pool, skipped hiring a police captain and a deputy fire chief, and moved the gang police officer back to patrol.

“We are going backward,” Crume said.

Crume said he knows that the sales tax idea isn’t popular with some. Still he said he doesn’t see an alternative.

Council member Tessa Winebarger said there are mixed feelings among voters about the proposed tax.

“I’ve heard strong support on both sides of the issue. It is a change and change is always hard and frightening,” said Winebarger.

Winebarger supports the tax.

“I see a huge revenue enhancement with the implementation of the sales tax,” said Winebarger.

Council member Marty Justus said he will back the sales tax.

“Now we either enhance our revenue or cut services. We’ve done everything we can,” said Justus.

Justus said he recommended the council exempt small businesses from the levy. The idea, he said, was to exempt businesses with five or fewer employees from the tax but the council rejected the idea.

“I am going to vote for it but I believe small business should be exempt,” said Justus.

The alternative to a sales tax, Crume said, is stark.

“If we don’t get more money we will have less firemen, less cops and the recreation department will have to close. We are already short five cops. People don’t see that. We see it on our stats but people don’t notice when there isn’t a cop out there on the beat,” he said.

The Ontario Chamber of Commerce hasn’t taken a position regarding the sales tax proposal, said chief executive officer John Breidenbach.

Business owner Cheryl Cruson of Oregon Trail Hobbies said she opposes a sales tax on philosophical grounds but will accept the levy.

“I will reluctantly go along with it because I see the need to improve our city and the money has to come from somewhere,” said Cruson.

Cruson said Ontario is victim of its geography.

“It is difficult when you have a city of 9,000 trying to service 60,000 people every day,” said Cruson.

Have a news tip? Contact reporter Pat Caldwell at [email protected] or (541) 473-3377