The city of Eugene faced a loss of more than $2 million for the 2004 fiscal year because of the statewide financial crisis that occurred during the summer.
By the end of the legislative special sessions, however, it was determined some of the money generated by state cigarette, alcohol and income taxes will probably go where it was intended: into the Eugene city budget.
Money granted to the city of Eugene is classified as “Intergovernmental Revenue” in the 2004 Adopted Budget. These dollars come from federal, state and local government revenue. Some of the money is given in the form of grants, which can be used in programs such as drunken driving prevention and safety programs in public schools. Another source of intergovernmental revenue is the state alcoholic beverage tax and the state cigarette tax. Taxes generated from the sale of alcohol and cigarettes are divided among cities based on their population, according to the League of Oregon Cities Web site.
According to the Eugene Budget Office, the city will gain about $266,000 from the state cigarette tax and $1.24 million from the state alcoholic beverage tax.
In addition to the money received through the taxes, Eugene will also receive about $766,000 in “state revenue sharing” funds. These funds come from income taxes and other sources of state revenue and are then redistributed to local governments.
Eugene Senior Budget Analyst Jeff Petry said the amount of funds distributed by the state to cities can fluctuate from year to year. He called the financial distribution procedure of the state a “black box,” meaning the way money is distributed can be hard to predict. Legislators help decide how much money is allotted to different municipalities and, in the case of the financial crisis faced by the state Legislature this summer, they may decide not to give any money at all.
“The state can take it all away if they need to,” Petry said.
Money that would normally have been given to the city by the state government was also in danger of being redistributed to other areas of Oregon.
“We were worried during the special sessions,” Petry said. “There was talk about taking $2 million from the city, but it didn’t come to pass.”
Once Eugene budget officials have an estimate of how much money they will receive from the state, they add the estimate to the city’s budget. However, the money doesn’t always arrive immediately.
Petry said funds can arrive on a monthly basis, every three months or even right before the fiscal year is over.
“We don’t always know when the money is coming,” Petry said. “Sometime it just dribbles in.”
The money received by the city then goes into the city’s General Fund, where the funds can be redistributed to different public services, such as the Eugene Police Department, emergency medical services, the Eugene Public Library and the Hult Center for the Performing Arts.