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Eagle Point SD 9 explores construction excise tax to fund capital needs; board asked to consider resolution
Summary
Staff outlined the state-authorized construction excise tax (CET), described how neighboring districts collect it through city/county building permits, and said a September 1 start date is proposed if the board approves a resolution at the regular meeting.
Eagle Point School District 9 staff discussed a possible construction excise tax (CET) at the June 18 work session and recommended the board consider adopting a resolution to implement the tax to raise funds for capital projects.
District counsel and staff described the CET as a state-authorized charge originally enacted in 2007 and administered by local building-permit authorities on behalf of school districts. They said the tax functions similarly to a systems-development charge and may be used only for capital improvements such as new buildings, additions, major HVAC work and roofs. Exemptions listed in the statute and regulations include public improvements, affordable housing, hospitals, agricultural buildings and replacement housing after disaster; staff noted each district tailors administrative hardship and exemption procedures.
Staff said neighboring districts in southern Oregon already collect CET through county and city intergovernmental agreements, typically allowing the permitting jurisdiction to retain an administrative fee (often up to the 4% allowed) and remit proceeds to the school district quarterly. Based on comparisons with nearby districts, staff estimated the district could raise roughly $250,000 annually once the charge is in place, though they called that a preliminary ballpark figure and noted pending coordination with Jackson County and the City of Eagle Point.
Staff proposed a September 1, 2025, effective date in the draft resolution to allow time for intergovernmental agreements and permitting updates. Board members asked about the impact on new-home buyers (the tax is charged per square foot, currently indexed by the Department of Revenue) and caps that apply to nonresidential commercial projects; staff said residential rates have been inflation-adjusted over time and nonresidential projects often pay a lower per-square-foot rate with a per-application cap.
No final board action was taken at the work session; staff said the CET resolution would be on the regular-meeting agenda for formal action and that county and city partners would need to approve intergovernmental agreements to collect the tax on the district's behalf.
