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A tax on prepared food and beverages and an increase in motel room taxes may
offer the City of Sisters a way out of its budget troubles. The city faces an
$80,000 shortfall this year and Measure 47 tax cuts promise further loss of
revenue in years to come.
A 5 percent food and beverage tax and a 1.5 percent increase in transient room
taxes were strongly recommended by members of the budget committee at a
Wednesday, November 13, workshop.
According to city councilor Gary Miller, who headed a budget subcommittee to
research revenue sources, conservative estimates indicate the food and beverage
tax could bring in $100,000 in revenue each year. An increase in transient room
taxes could net the city $20,000 more per year.
Miller noted the proposals were designed to target tourist dollars because, the
committee believes, tourism does not currently pay its way for the city
services it demands.
The committee discouraged imposing a general retail tax because they believe it
would cost local residents and potentially harm businesses, sending local
business to Bend.
The food and beverage tax would be imposed on restaurant meals and drinks and
other prepared foods such as deli or bakery items. It would not apply to
groceries.
City voters would have to decide whether to impose the food and beverage tax.
The budget committee agreed the city should work to place the issue on the
ballot, probably in the May election. The Sisters City Council can decide to
raise the transient room tax.
The revenue subcommittee also proposed raising business license fees from $43
per year to $100 per year. That increase would net an approximate $21,700
revenue increase. According to city recorder Bernadette Sorenson, business
license fees have remained unchanged since 1989.
The committee discussed assessing a $5 or $10 booth fee on vendors at the
Sisters Area Chamber of Commerce- sponsored Saturday Markets and Harvest Faire.
The revenue committee wants to explore that possibility with the chamber board
of directors.
The committee proposed approaching the Sisters Rodeo Association board of
directors about a possible 1-2 percent assessment on gross ticket sales to
offset the impact of the event on the city.
Even if the revenue-increasing ideas are implemented, they will not have an
immediate impact on the city's financial crunch.
"The bleeding is going on every single day," said budget committee member and
councilor-elect Gordon Petrie. "So we should stop that bleeding as soon as we
can."
To do that, a second subcommittee proposed cuts to the current city budget.
"What we did was cut back numbers to assume that we were not going to be moving
to a new city hall," said police department administrative assistant Pat Davis,
who worked on the cuts.
Proposed cuts included eliminating capital outlay for the city hall project,
cutting salary reserves and some equipment such as a new lawn mower for the
public works department.
Sisters Police Chief David Haynes presented a proposal from the Deschutes
County Sheriff's Office that would assign Sisters Police detective Don Pray to
the Central Oregon Drug Enforcement Team from January through April of next
year. The county would then pay Pray's salary and benefits, saving the city an
estimated $18,400.
Deeper cuts are possible. The budget committee plans to review its $5,000
contribution to the SOAR program and the $24,000 earmarked for the Sisters
Chamber of Commerce. City Councilor Jean Cooper emphasized that no decisions
about those funds have been made, but cutting them must be discussed.
Cooper cautioned that the cuts are only a temporary "bandage" on the budget
problem.
"This may solve our problem this year," Cooper said. "It does not solve our
problem long-range."
Davis said that the cuts that have been proposed will be hard on staff and may
have an impact on city services.
"What it means to staff is that once again we can't purchase equipment to
update our work situation," Davis said. "I think we are cutting muscle. It's as
far as you can go before people really start seeing a difference."
Budget cutters have recoiled at the possibility of going further, because
deeper cuts might well mean cutting city services and personnel.
"I hope it doesn't come to that," Cooper said. "The city needs the staff we
have and they're better than we deserve."
