Results of the recent vote on health insurance should give Ontario city officials pause about the future of their sales tax. The city says it is in serious financial trouble, but matters could get worse.
In January, Oregon voters were asked to keep in place a tax on insurance companies, some hospitals and others to pay for medical insurance. While the measure passed in the state, Malheur County went solidly against it. Of local voters, 61 percent rejected the tax.
Remember, this is a tax someone else pays – at least on paper. And Malheur County voters still said no. That should be a strong signal to Ontario officials that their 1 percent sales tax is likely doomed.
The Ontario City Council last fall decided to impose the retail sales tax. Anyone buying bread or coffee in Ontario would have started paying that new tax at the start of the year. But opponents, unhappy with how the tax was imposed, rounded up enough signatures to put the matter before voters in May. That vote will decide whether Ontario can collect the tax.
The city is counting on that sales tax to patch what it says is a deep hole in its budget – about $1 million or so. Without more money, the city has warned the community that public safety, public works and more are at risk. The new tax, though, also would give the city roughly $2 million more than it needs to fix that hole, so city officials promise not only to keep city employees and services but add to them.
Mayor Ron Verini has been confident all along that Ontario voters would see things his way. He expects the sales tax to get voter approval. Verini no doubt gets that sense from his temperature readings around town, and goodness knows he moves around a lot. But history isn’t with him.
Oregonians, after all, have never approved a sales tax. It’s just an article of pride for many voters, like keeping self-service gas out of everyday life in Oregon.
Nonetheless, city officials have persisted. They point out that many others – those who visit, those who work in town – would drop money into the city till via the sales tax. That may well be true but this is true too: Ontario residents too would be paying a new sales tax.
If local voters won’t approve taxing someone else, how likely is it they would look more kindly on a plan that taxes them directly? Not likely.
Besides the January vote, recent history suggests local residents hold deep antipathy towards increasing taxes, even for good causes. Go back to November 2016. Malheur County voters said no to increasing state corporate taxes. That was the message of 70 percent of the voters. Local voters also said no to more money for Treasure Valley Community College. That measure lost with a roughly 60 percent no vote. And last year, the Ontario School District tried for money to fix schools and build new ones, a measure voted against by 54 percent of those marking ballots.
Perhaps the city will be more persuasive than every other government agency that has tried to tax local folks. That will take some tall talking, for the city has by its own admission stubbed its public relations toe in handling the sales tax. City officials could talk and hope voters buy what they are selling. If they are lucky, they get their money and city government grows.
That seems a gamble that in the end could cost Ontario residents. A loss at the polls means, the city says, fewer police and maybe even fewer firefighters.
Instead of taking that risk, city officials should consider a frank assessment that the sales tax is doomed, at least on the May ballot. It’s too late to stop the vote no matter what the city does. But what’s not too late is for the city to change how the sales tax is imposed, sharpen the case for why it’s needed, and make unambiguous declarations about where the money would go. The other option is to assume failure and start cutting costs now instead of delaying the seeming inevitable.
We take the mayor and other city leaders at their word that they care deeply about Ontario and want its citizens well served. They should act on that motivation and change course now on the sales tax. — LZ