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Phoenix-Talent district waives tax for rebuilds

An owner rebuilding a 2,000-square-foot home destroyed by the Almeda fire won’t have to pay a $2,780 construction excise tax because the Phoenix-Talent School District is waiving the charge.

Phoenix-Talent School Board voted unanimously last week to remove the tax for rebuilds covering the original square footage for both residential and commercial prosperities.

“I would imagine people rebuilding are going to be happy that a fee is waived. Reducing a fee would be helpful hopefully to get them back faster,” said board Chairwoman Dawn Watson. “The board has decided that having families come back to the community would be one of our priorities. The members felt like this was a good way to help that goal.”

The Sept. 8 fire destroyed more than 2,500 residences, many in the school district. The fire also destroyed a number of business buildings in Talent, Phoenix and the county.

“The board felt it was important to give this to businesses as well. A lot of them were small businesses,” said Watson. “They support the schools. We just felt like it was the right thing to do.”

Research showed that the Lincoln County School District also paused an excise tax, said Superintendent Brent Barry. The district consulted with legal counsel to make sure the move was allowed.

“We know just with other news sources and what we hear from the community here, there’s some challenges with fees and taxes,” said Barry. “The cost of rebuilding is tremendous just because of the time involved and supplies and contractor availability.”

Rescinding the fee for rebuilds was discussed at two meetings, said Watson. Each year the county gives the district projections on how much money the fee will raise. The most recent projections didn’t include rebuilding of numerous structures.

Phoenix-Talent adopted the excise tax in 2013. Since that time it has raised over $1.4 million that has been used for capital expenditures. In fiscal year 2019-20, approximately $170,000 was spent on deferred maintenance projects such as painting, carpeting, fence replacement and other capital improvements throughout the district. The money has also been used to update the school’s vehicle fleet.

A portion of the tax revenue was used to augment construction and renovations undertaken by the district after voters approved a $68 million bond measure in fall 2017. That created the new high school building and upgraded the district’s four other campuses.

The Oregon Legislature in 2007 approved measures that allowed school districts to impose a tax on new construction, including rebuilds. The tax is collected by local officials when they issue permits for buildings regulated by state building codes. Jackson County, Phoenix, Talent and Medford would collect the fees on construction projects for the district.

The tax recognizes that as towns grow through new construction, school district should grow proportionally through a limited construction tax.

Original legislation set the fee at $1 per square foot for residences and 50 cents per square foot for nonresidential structures. Beginning in 2009 the rate was indexed to inflation. Rates for the 2020-21 fiscal year are $1.39 per square foot for residences and 70 cents per square foot for nonresidential. Nonresidential buildings also have a maximum fee limit, which is $35,200 for the current fiscal year.

The waiver applies only to the original square footage that is rebuilt. Should an owner decide to add more space, the extra area would be subject to the tax. The waiver will end June 30, 2023.

Many other local school districts have enacted excise taxes, said Barry. Districts with the taxes are required to develop long-term facility plans.

Two other district efforts to help facilitate return of families are presently in pause mode.

The district has been working with Rogue Retreat, receiving donated trailers and RVs to house people. More than 20 families have received units, but a lack of space in county, state and private RV parks has halted the effort for now, said Barry.

“We’ll be ready to move forward when spaces open up,” said Barry. If an effort by Talent Urban Renewal Agency to create a temporary housing site on its Gateway land succeeds, trailers could be used there.

Use of district land on Colver Road by FEMA is in contingency status as the federal agency explores other options for location of trailers to house five victims in transition. The district’s board has approved moving ahead with the effort, said Barry. If FEMA decides to use the site, a formal agreement would need to be reached. An application has been made to Jackson County for the site to house trailers.

Reach Ashland freelance writer Tony Boom at tboomwriter@gmail.com.

Ron Kroy checks out the construction progress of his home on Brandon Drive in Phoenix. file photo