NEWPORT — Newport electors voted more than two-to-one against a 5 percent tax on prepared food and beverages that would have funded essential city services and public safety, and helped bridge a structural deficit in the General Fund. A proposed increase in the gas tax also appears defeated.
The city of Newport’s Financial Work Group proposed multiple measures to cut spending and increase revenue, including an already-adopted transient room tax, to account for a structural deficit that could see expenditures exceeding revenues, and eating into the city’s reserves, to the tune of $1 million or more within a few years.
The work group targeted revenue streams with a contribution from visitors, rather than a service fee or levy that would impact only local residents. Newport can experience a temporary population of triple its full-time residents during tourist season, straining infrastructure and public safety resources. Visitors also make use of the city’s $50 million worth of public facilities, maintenance of which is chronically underfunded.
At the work group’s recommendation, council asked city voters to approve a 5 percent tax on prepared food and drinks, Measure 21-205, and an increase in the local gas tax, Measure 21-206. Only the latter question had to be sent to voters by state law — city council could have adopted the food tax on a motion.
The prepared food tax would be paid by the customer at the point of sale and was expected to generate $2.5 million for the General Fund during the first year of collection.
According to the city, the tax would have been used as follows for the first year: $893,000 added staffing for the 2022-23 fiscal year, including three police officers, a parking enforcement officer, three firefighters/EMTs and a bi-lingual librarian; $400,000 for replacement and purchase of equipment; $1 million for maintenance and upgraded to 48 city-owned facilities and parks; and $200,000 for one-time grants to assist businesses in implementing collection of the new tax.
Funding in future years would have been used for continued support of the added positions, equipment purchases at a minimum of $600,000 per year, and improvements and renovation of city facilities and parks at a minimum of $1 million per year.
Revenue generated by the proposed increase in the gas tax — from a variable rate of 1 cent per gallon nine months of the year and 3 cents during the busiest tourist months to 5 cents per gallon year round — could only have been spent on street repairs and other transportation related projects. A study commissioned by the city in 2019 concluded it would need to spend $2 million annually over the next decade to keep its roads in good condition. The gas tax increase was expected to generate almost $400,000 a year.
As of 8:30 p.m. election night, with 88 percent of votes counted, there were 989 votes for and 2,085 votes against the prepared food tax. The gas tax appears to have failed, as well, with early returns of 1,316 for and 1,754 against. The city will now need to examine other sources of revenue or look at reducing services or even selling city properties.
There were also three fire district levies on the ballot. The Yachats Rural Fire Protection District is in dire financial straits and asked voters to double its current tax rate with a $1.59 per $1,000 of assessed property value on the ballot to help pay off its outstanding debt and purchase new equipment. Voters appear to have rejected the levy, with 453 in favor and 619 opposed, with 88 percent of votes counted.
Voters appear to have approved North Lincoln Fire & Rescue District’s request for a tax rate of $1.22 per $1,000 of assessed property value and replace the current levy and its 84-cent rate, a measure that failed during the previous election. The tax increase will fund seven new staff members at the department who will help keep facilities in the southern part of Lincoln City fully staffed. Results were 2,348 for versus 1,608 against, with 88 percent of votes counted.
The Seal Rock Rural Fire Protection District asked voters to renew its 40 cent per $1,000 of assessed property value. That measure seems to have passed, with 866 yes votes and 390 no votes, with 12 percent of ballots uncounted.
There were also three uncontested seats up for election on the Belle Mer Sigl Tract Special Road District board.
News-Times reporter Mathew Brock contributed to this report.