Meals tax requested until 2030

The City Council agreed Tuesday night to ask voters to extend the city's sales tax on prepared food and drinks until 2030.

Voters will decide in November whether to renew the 5 percent tax, which otherwise sunsets in 2010.

Currently, 80 percent of the tax goes to make debt payments for past upgrades to the sewage treatment plant, while 20 percent goes for park land purchases.

Payments on current sewage treatment plant debt end in 2022. But the city faces new Oregon Department of Environmental Quality regulations on the release of treated effluent into creeks. DEQ believes the warm effluent is harmful to fish. The city has yet to decide how to deal with — and pay for — meeting the new regulations.

Several councilors worried that asking for an extension to 2030 rather than 2022 might alienate some voters. The proposed extension would allow tax receipts to go for sewage capital projects, without narrowing the focus down to paying sewage plant debt.

"As soon as you broaden the language, there are a number of people who you're going to lose their vote," Councilor David Chapman said.

Without a renewal of the tax, sewage bills could rise by 60 percent to pay sewage debt, Ashland Finance Director Lee Tuneberg has warned.

A council majority supported giving the Ashland Parks & Recreation Department more flexibility when it comes to spending the 20 percent of tax receipts that have been dedicated to park land purchases.

The parks department has sometimes lacked funds to develop new park land that it bought.

If voters extend the meals tax, the parks department would be required to spend 20 percent of the 20 percent it receives on land purchases. The rest could be used for planning and developing parks and doing major rehabilitation projects for park facilities.

"I think it's very important that we protect a certain percentage of this for parks acquisition," Councilor Eric Navickas said. "We will regret it in the future if we don't."

A majority of councilors favored putting a $250 tax cap on catered events that cost $5,000 or more.

The Oregon Restaurant Association had asked that no tax be collected at all on catered events that serve 150 people or cost more than $5,000.

Oregon Restaurant Association Southern Oregon Regional Representative Drew Baily said that lifting the tax on big events would encourage large groups of people to come to Ashland, where they would dine, shop and stay in hotels.

Councilor Greg Lemhouse supported the idea, but couldn't get enough support from his fellow councilors to make the change.

Councilor Carol Voisin said exempting large events from the tax would be unfair because only a small number of businesses would be able to benefit from the exemption.

Managers at the Ashland Springs Hotel and a few other businesses have said the city's tax puts them at a competitive disadvantage against businesses outside Ashland when they are trying to attract conferences, wedding parties and other large events.

The current tax does not apply to school and Southern Oregon University food service.

However, a majority of councilors are interested in changing the meals tax so that SOU would have to charge the tax when it caters non-university functions. Catered university functions would still be exempt, as would school and university cafeterias.

SOU Vice President of Finance and Administration Craig Morris said SOU consulted with the Oregon Department of Justice and believes the city does not have the power to order the university to collect the tax on catered events for non-university functions because SOU is part of the state university system.

City staff will investigate the legality of trying to impose a city tax on those functions.

SOU is not challenging the current meals tax provision that separate vendors on campus like Subway have to collect the tax.

The City Council is scheduled to give final approval to meals tax ballot measure language in August so that the issue can go before voters on Nov. 3.

Staff writer Vickie Aldous can be reached at 479-8199 or

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