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P-T School District adopts excise tax on construction

Developers will have to pay more when they build in the Phoenix-Talent School District, thanks to an excise tax adopted by the School Board.

The board unanimously voted in the tax last week and hopes to implement it by the end of the summer, once the district enters into collection agreements with the county and the cities of Talent, Phoenix and Medford.

"It will certainly help the district," said Doug Spani, district business manager.

Spani said the board considered the tax after the Oregon Legislature gave districts the right to collect it in 2007, but postponed the decision to adopt it until now.

"The board gave it some careful thought and decided it was a good time," said Spani.

The Medford School Board voted to adopt the tax last fall, after three years of back-and-forth dialogue about whether it was a good idea.

Central Point implemented the tax in 2008 shortly after it was authorized by the state, and Ashland followed suit, adopting it in early 2010.

The law allows school districts to collect $1.07 per square foot of residential construction and 54 cents per square foot for commercial construction. The cost for a 2,000-square-foot house would be $2,140, while the cost for a 10,000-square-foot commercial building would be $5,400.

The fee will be capped at $26,800 per permit, and the county and whichever city the new construction is in can keep up to 4 percent of the gross proceeds from the tax as payment for their work in collecting the funds.

Spani said there was no dialogue between the district and any local developers before the board's vote.

"With the economy the way it is, there's not a whole lot of activity right now," said Spani. "We're not expecting to see a lot of money right away."

Money generated from the tax can be used only for 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 general fund expenses, such as salaries or supplies.

While the district hasn't identified any specific uses for the money just yet, Spani said there are a number of improvements on the facilities plan that would qualify.

"We have several needs, but we haven't nailed down a specific project," said Spani, who noted that some buildings could use an update for their heating systems to offer more energy efficiency.

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