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Board talks developer excise tax

The Medford School Board Monday revisited the possibility of implementing an excise tax on new construction projects within district boundaries.

The board has considered the tax multiple times since the Oregon Legislature granted school districts the right to collect the money in 2007, but members have continuously postponed any decisions.

The board received a packet of information from district Chief Financial Officer Brad Earl, explaining possible projects the revenue could be used for, from new flooring to new roofs at two elementary schools.

The tax would collect $1.07 per square foot of residential construction and 54 cents per square foot for commercial construction; it would be a one-time fee assessed when a building permit is issued.

No more than $26,800 could be collected from a single permit, and the city or county can keep up to 4 percent of the gross proceeds from the tax.

As per the law, exemptions for the tax include affordable-housing projects, hospitals, schools, libraries, churches and other public buildings.

Board member Jeff Thomas said in his three years on the board, it has considered the tax many times, and he urged members to finally come to a decision.

"Either we are doing it, or we are not doing it," he said. "We need to move on."

Because the tax relies on construction projects within the district, Earl said it is easy to make arguments in favor and against the tax and its potential impacts on local construction projects and the economy.

The tax will fund capital improvements in the district, such as land acquisition, new construction or reconstruction, and acquisition of new equipment and property.

The money cannot be used for routine maintenance or operating costs. "It would help the general fund in the long run," Earl said.

The packet Earl gave to the board identified a number of possible uses for the new funds during the 2012-13 school year, including new flooring at Lincoln Elementary, new roofs at Griffin Creek Elementary and Oak Grove Elementary, and mechanical and electrical work at several other district facilities.

While difficult to project the potential revenue from the tax, other districts that have implemented the tax show tens of thousands of dollars in added revenue.

In the 2010-11 fiscal year, the Ashland School District collected $59,000, and the Central Point School District collected $80,000 from the tax. They are the only two districts in the county to implement the tax so far.

Under state law, local governments would have to help the district collect the tax because the district itself has no tax-collecting capabilities.

Board Chair Paulie Brading suggested discussing the tax more at one of the board's November meetings.

Reach reporter Teresa Ristow at 541-776-4459 or tristow@mailtribune.com.