VALE — Ontario will not have a sales tax. For the second time in 14 years, Ontario voters made their voices heard.
According to the the unofficial results of the Primary Election that came in early Wednesday morning from the Malheur County Clerk’s Office, more than 1,500 voters from Ontario chose to vote “no” for Measure 23-58, which would have implemented a 1 percent sales tax. More than 800 chose to vote “yes” for the measure. A second measure that was tied to the first would have amended the city charter to add a cap to the tax. That way if the sales tax had passed city officials could not raise it without the matter going to a ballot for Ontario residents. Had the sales tax passed, the cap would have come with it, as more than 1,900 individuals voted yes for Measure 23-59.
“The bottom line is, our citizens know the consequences of both sides of the vote,” said Ontario Mayor Ron Verini, at 9 p.m. Tuesday, shortly after the first round of unofficial ballot results came in. “They know the challenges we have.”
Verini also headed up Citizens for a Better Ontario, a political action committee that sought to pass the tax.
Ontario City Manager Adam Brown mirrored Verini’s thoughts on the sales tax measure being shot down.
“Obviously we’re disappointed, but we need to find a way to move forward,” he said. “There are going to be some cuts.”
For those not supporting the sales tax, such as Scott Petterson, owner of Lindsay Ecowater Inc., “I’m only relieved.”
Petterson had been placing ads in the Argus against the sales tax, as he was already paying for space he had been previously using for just his business.
“It was an appropriate use of the space,” he said.
Petterson’s opposition to the tax came partly based on his experiences in Spokane 15 years ago, when the sales tax there climbed from 3 percent when he first moved there to 6 percent by the time he left.
Another reason for his opposition to the Ontario sales tax measure was because he felt it was a bad idea, that a tax within Ontario city limits would deteriorate the local marketplace, much as, in his opinion, big box stores in the area have done.
However, “I don’t think it [the opposition to the tax] was a personal vendetta against the City Council,” Petterson said.
“This could have been solved from the very beginning by having the people simply vote on it.”
And this was an idea residents raised during several town halls the City of Ontario hosted in late 2017, Petterson recalled.
What it would have done
The tax would have applied to retail goods purchased within the City of Ontario, but not to services or automobile sales, and would have exempted farmers for certain items, while wholesale buyers would have been able to obtain a permit from the City to exempt them from buying items to resell.
According to estimates from FCS Group, a firm hired by the City of Ontario earlier last year to collect estimated sales tax revenue data, the city would’ve been able to bring in $3.7 million per year from collection of the sales tax.
The city spent about $20,000 for the firm to do the study.
City officials have repeatedly said such a sales tax is necessary, as the funds would be needed to pay for items such as balancing the General Fund to maintain services, worth about $900,000.
The Ontario Budget Committee, after three days of deliberation late last month, recommended more than $1 million in cuts to departments and personnel as well as holding off on some capital projects, with the budget approved around the assumption that the sales tax would not pass.
Should Ontario City Council adopt the approved 2018-19 budget in June, the cuts would begin with the new fiscal year, July 1.
Up to the voters
The Ontario City Council passed a sales tax ordinance on Sept. 26.
However, petitioners effectively put a stop to any collection on the sales tax until the matter went before the voters on Tuesday.
Less than a month after the ordinance passed, petitioners gathered enough signatures from among Ontario’s registered voters to put the matter up as a referendum.
Under Oregon’s referendum process, once enough signatures are verified the issue must go to the voters before it can be enacted.
An $8 street maintenance fee was approved by the Ontario Budget Committee and adopted by the Ontario City Council during the 2017-18 budget cycle. An additional $5 public safety fee was approved by the budget committee late last month, and still needs formal adoption by the City Council when its votes to approve the budget, in June.
Despite the overwhelming defeat of a sales tax by voters 14 years ago, city officials opted to give it another try.
During its efforts to get the word out about why a sales tax was needed, city officials spent about $20,000 for an independent group to perform a study on the impact of a sales tax, and spent approximately $2,000 for two rounds of mailers to Ontario utility bill payers.
No money was spent by the city to renting spaces to present multiple forums, according to Kari Ott, certified public accountant for the city.