Opinion ID: 1144890
Heading Depth: 1
Heading Rank: 2

Heading: municipal authority

Text: Before we discuss plaintiffs' constitutional challenges to the City's property and business taxes, we should answer plaintiffs' contentions that the City was without authority to establish the District and to impose taxes within the District. Plaintiffs argue that no state statute or case exists which will support the City's charter amendment and the City's creation of the District. They also argue that no state statute authorizes a city to select a portion of its citizens for unique and special tax treatment. We agree with the Court of Appeals and the circuit court that the District was validly established. The Oregon Constitution, in article XI, section 2, provides that [t]he legal voters of every city and town are hereby granted power to enact and amend their municipal charter, subject to the Constitution and criminal laws of the State of Oregon,   . Also, article IV, section 1(5), of the Oregon Constitution provides that the initiative and referendum powers are reserved to the qualified voters of each municipality and district as to all local, special and municipal legislation of every character in or for their municipality or district.    These home rule provisions permit the people of a city or town to decide upon the organization of their government and the scope of its powers under its charter, without the need to obtain statutory authorization from the legislature. See La Grande/Astoria v. PERB, 281 Or. 137, 142, 576 P.2d 1204, aff'd on rehearing 284 Or. 173, 586 P.2d 765 (1978). The charter amendment, passed by the voters of the City in 1973, validly conferred authority on the city council to establish the District and to impose taxes in the District. These charter powers are valid unless they contravene state or federal law. La Grande/Astoria v. PERB, supra 281 Or. at 142, 576 P.2d 1204. The courts below also correctly held that the City had authority to impose taxes within the District. A municipal corporation may assume powers to impose taxes and to select the kinds of taxes most appropriate in order to provide governmental services. See, e.g., Horner's Market v. Tri-County Trans., 256 Or. 124, 131, 471 P.2d 798 (1970); Davidson Banking Co. v. Jenkins et al, 216 Or. 51, 55-59, 337 P.2d 352 (1959). The power to impose taxes in the District is expressly provided in the following language of the charter amendment: for the purposes of public parking   , of public transportation   , and of economic promotion and development for the district, to tax persons, property and economic enterprise in the District;  . (Emphasis supplied.) We interpret the charter amendment to provide express, implicit and essential authority for the property tax, the professional business tax, and the nonprofessional gross sales and receipts tax levied by the City. Robertson v. Portland, 77 Or. 121, 126-28, 149 P. 545 (1915). The plaintiffs also contend that the City acted beyond its authority because the revenues from the District taxes  which the Downtown Development Board budgets for a free parking program and for an advertising program partially administered by the Eugene Downtown Association  are not used for a public purpose and are used to invest public funds in private enterprise, in violation of article XI, section 9, of the Oregon Constitution. [13] The City of Eugene established the District to finance and administer a program of economic promotion and development within the City's central business district. Eugene Code, §§ 2.380, 2.381 (1971). The City's objective is to revitalize the central business district by promoting business in the area, by increasing downtown property values, by encouraging downtown shopping, and by improving services within the downtown area. [14] We agree with the circuit court that the City has shown that there would be a general benefit to the economy of the City as a result of the economic improvement of the City's central business district. Thus the City's program of free parking and District advertising serves a legitimate public purpose. See Carruthers v. Port of Astoria, 249 Or. 329, 341, 438 P.2d 725 (1968). We also agree with the trial court's finding that the City's arrangements for the free parking and advertising programs do not expose the taxpayers to any of the risks contemplated by article XI, section 9. This finding, plus the finding that the public funds are expended for a public benefit, leads us to conclude that the District tax revenues are not being spent for private enterprise in violation of article XI, section 9, of the Oregon Constitution. See Carruthers v. Port of Astoria, supra at 333-40, 438 P.2d 725.