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Recent History of Oregon's Property Tax System

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Recent History of Oregon's Property Tax System RECENT HISTORY OF OREGON’S PROPERTY TAX SYSTEM WITH AN EMPHASIS ON ITS IMPACT ON MULTNOMAH COUN TY LOCAL GOVERNMENTS RECENT HISTORY OF OREGON’S PROPERTY TAX SYSTEM WITH AN EMPHASIS ON ITS IMPACT ON MULTNOMAH COUNTY LOCAL GOVERNMENTS TOM LINHARES Edited by Elizabeth Provost December 2011 Author, Editor, Acknowledgements and Dedication About the Author : Tom Linhares has been the Executive Director of the Multnomah County Tax Supervising & Conservation Commission since April 2004. The Commission, or TSCC as it is commonly called, is made up of five county residents who are appointed by the Governor to four-year terms. The Commission oversees the budget process and property tax levy for all taxing districts that are principally located in Multnomah County, currently numbering 39. In addition, the Commission is required to hold public hearings before any district can place a property tax measure on the ballot. Prior to coming to the Commission, Tom was the elected County Assessor for Columbia County, serving in that position for 17 years. During that time he served as the president of the Oregon State Association of County Assessors (1998-99) and throughout the 1997 Legislative Session he was the Association’s Legislative Committee Chair, where he helped craft legislation to implement Ballot Measure 50. Tom is a graduate of Portland State University with a degree in Political Science. He and his wife, Val, live in Columbia City. They have one daughter, Julie, who is principal of Marshall High School in Bend. About the Editor : Elizabeth (Libby) Provost is an independent historian and researcher specializing in historic preservation consulting and oral history. Since 2007, Libby has consulted with numerous property owners to identify and research historic resources and compose National Historic Registry applications. These include projects working with the City of Forest Grove and the City of Hillsboro, as well as private property owners. She has also consulted with the Oregon Historical Society, the Sisters of the Holy Names, and the US District Court of Oregon Historical Society on a variety of research-based and oral history projects. Libby graduated from Linfield College with a B.A. in History in 2002 and received her M.A. in History (with a Public History endorsement) from Portland State University in 2009. Her thesis is titled, “The Genesis of Portland’s Forest Park: Evolution of an Urban Wilderness.” Libby and her husband, Bret, live in Portland with their daughter, Daphne. iii Acknowledgements : This project would not have been possible without the tireless assistance of many individuals, far too many to name here. However, a few were of particular help throughout the many months it took to bring Recent History of Oregon’s Property Tax System to press: Tunie Betschart : Budget Analyst, Multnomah County Tax Supervising and Conservation Commission. The “better half” of the tax commission, Tunie read every word of the History, not once, not twice, but several times. Her keen eye and thoughtful comments resulted in a much improved result. In addition, while I diverted time from my regular duties to conduct research and write the History, Tunie picked up the slack by taking on more work. Kyle Easton : Research Section, Oregon Department of Revenue. Kyle is responsible for compiling the annual Property Tax Statistics and the companion Property Tax Statistics Supplement, from which so much of the data contained in this report comes from. Kyle responded to my many requests for additional documents with enthusiasm and opened the Department’s extensive library to me on several occasions. Carol Samuels : Senior Vice President, Seattle Northwest Securities. Carol read a draft of the History and made extensive edits and comments, including several that said “I disagree!” Nancy Sullivan : Office Deputy, Columbia County Assessor’s Office. My many trips to the Columbia County Assessor’s Office to conduct research invariably involved asking Nancy for help, which she did in her usual upbeat manner. Mary Macpherson : Assistant Vice President, Seattle Northwest Securities. I am indebted to Mary for helping me with my math homework in creating complex formulas for calculating Measure 5 compression that are embedded in Appendix C examples. Terry McCall, Dr. Roslyn Elms Sutherland, Steve Nance, Susan Schneider and Javier Fernandez : TSCC Commissioners. For allowing me the time and resources to pursue this project and encouraging me throughout the process, I am grateful for their support. Dedication : To the men and women of the Oregon State Association of County Assessors and the Oregon Association of County Tax Collectors who work tirelessly every day to administer Oregon’s complex property tax system on behalf of the citizens of Oregon. This history is about them and for them. It has been an honor to share a career with such dedicated professionals. iv Table of Contents Executive Summary ............................................................................................................. 1 Section I - Introduction ......................................................................................................... 3 Section II - Property Tax Mechanics ...................................................................................... 6 Section III - Pre-Ballot Measure 5.......................................................................................... 8 Public Education and the Property Tax System ............................................................... 9 Rising Property Taxes during Recession ....................................................................... 13 Section IV - Ballot Measure 5 .............................................................................................. 14 Education Districts ........................................................................................................ 16 General Government Districts ....................................................................................... 19 Serial Levies and Urban Renewal ................................................................................. 21 Inequities Caused by Measure 5 ................................................................................... 23 Measure 5’s Success .................................................................................................... 25 Section V - Ballot Measure 47 ............................................................................................. 29 Section VI - Ballot Measure 50 ............................................................................................ 31 Assessed Value Limitation ............................................................................................ 33 Rate-based Property Tax System ................................................................................. 35 Cutting Operating Taxes ............................................................................................... 36 Running Three Tax Rolls in 1997-98 ............................................................................. 39 Permanent Tax Rates ................................................................................................... 43 Measure 5 Limits Under Measure 50 ............................................................................. 47 Urban Renewal Under Measure 50 ............................................................................... 50 Measure 50’s Success .................................................................................................. 53 Section VII - Today’s Property Tax System ......................................................................... 59 Urban Renewal in Today’s Property Tax System .......................................................... 62 Treatment of Temporary, Continuing and Gap Bond Levies in 1997-98 ........................ 67 Inequities Built Into System ........................................................................................... 69 Rate-based Property Tax System Verses Levy-Based System ..................................... 73 Tale of Two Fire Districts ............................................................................................... 74 Administration of Property Tax System ......................................................................... 78 Combined Effect of Measure 5 and Measure 50 ........................................................... 80 Section VIII - Conclusions ................................................................................................... 83 Final Thoughts .............................................................................................................. 93 Appendix A - Chronological Summary of Oregon’s Property Tax System History ............... 94 v Appendix B - Property Tax Limitation Measures – Election Results .................................... 96 Appendix C - Illustration of Measure 5 Compression ........................................................... 97 Appendix D - Summary of Statewide Ballot Measures, 1942 – Present ............................ 102 Endnotes ........................................................................................................................... 109 Glossary............................................................................................................................ 116 Bibliography ...................................................................................................................... 124 vi
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