County holds two sales tax hearings

As Hood River County prepares to ask voters for a two-percent sales and tourism tax, its elected board and staff will hold a pair of February hearings in which the public will get a chance to learn more and weigh in.

The hearings take place Monday, Feb. 5, and Tuesday, Feb. 20. The board meets at the ground floor room in the County Business Administration Building, 601 State St.; the general session typically starts at 6 p.m.

The commission is considering putting the sales tax on the May 15 Primary Election ballot.

A budget squeeze prompted the sales tax proposal. Jeff Hecksel, county administrator, said at a January board meeting that even maintaining core services, such as 24/7 hour law enforcement, could be up for discussion if the county cannot secure additional sources of revenue.

Commissioners have said the county government faces a roughly $1.6 million shortfall coming into next year.

As Commissioner Les Perkins put it during a sales tax discussion at a December meeting, the county has kept resources tight and would be “cutting into bone” to remove any staff at this point.

A public survey found mixed feelings about the sales tax proposal. Baseline results tallied 53 percent against and 42 percent in favor of a 2 percent sales tax. The tax would amount to 20 cents per $10 purchase.

Respondents were rate sensitive. When asked whether they’d support a higher 2.5 percent tax, the sentiments were more firmly planted against the concept — 57 percent against.

The draft ordinance, which hasn’t been finalized, adds a new section to the county code titled “Sales and Admissions Tax.”

It imposes a point-of-sale tax. It would be collected by merchants — except a five percent piece of tax money to help pay for the merchant’s administrative costs — and due to the county on a quarterly basis. Merchants would need to register with the county finance officer by Jan. 1, 2019.

The tax “shall be paid by the purchaser to the merchant at the time of sale, in trust for the county.”

The tax wouldn’t just apply to sale of goods. It would also be levied upon “admission charge paid to gain entry or access to any place or event open to the public, and any lease or contract of recreational equipment” in the county, unless specifically exempted in the ordinance.

Exemptions from the tax include prescription drugs and medical items, fuel, and grocery purchases — among a list of others, such as utilities.

The ordinance notes a possible property tax reduction. If the county receives more tax revenue than included in the annual budget, “it shall establish a property tax reduction fund, and tax revenue in excess of the budget amount shall be placed in a reserve account,” which could be applied to offset property taxes the following fiscal year.

The public survey included a question about such an element, and respondents were slightly more in favor of the sales tax if such a reduction was included.

The county board of commissioners recently held two work sessions ironing out their draft ordinance.

Lisa Knight Davies, county legal counsel, made revisions and brought a re-drafted version back to the board Tuesday for a round of discussion leading up to the hearings. Changes were mostly in specifics about exemptions and conditions, as well as clerical matters, according to a red-line draft version of the ordinance obtained by the News.

The deadline for the county to submit the sales tax ballot question to the state is Feb. 23.

Hood River City Council briefly discussed the county’s sales tax proposal and budget issues at their Jan. 22 meeting. They invited the county to make a presentation about the situation.

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