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HASSO HERING

A perspective from Oregon’s mid-Willamette Valley

Bill would make property tax jump

Written February 14th, 2017 by Hasso Hering

The state seal at the Capitol in Salem, where tax hikes are proposed.

The same Oregon legislators who were thinking of taxing coffee and old cars also have visions of sharply raising the property tax, the most unfair tax of all because it is only faintly related to the ability to pay. And their proposal includes a sneaky hunk of bait intended to make voters bite.

The House Revenue Committee has before it a constitutional amendment, House Joint Resolution 1, that would shatter the property tax limits enacted with Ballot Measure 5 in 1990 and Measure 50 in 1997. The Oregon Tax Foundation says the changes proposed in this bill would jack up the tax by more than $3,000 a year for the average property.

Measure 50 rolled back taxable values and then limited their annual growth to 3 percent. The proposed amendment would cancel that limitation and assess all properties at their “real market value,” which in most cases is substantially higher than the current assessed value.

Measure 50 also established permanent tax rates for all taxing districts. The amendment would allow cities, counties and districts to raise those rates every 10 years if the local voters approve. As people with a long memory know, the requirement for local voters’ approval is not effective in keeping taxes down. The cry goes up that it’s for the kids or for public safety, and resistance often crumbles.

In 1990, Measure 5 established maximum local tax rates for the operation of taxing districts (not for paying off debt, though). The pending amendment would increase those limits, from $5 to $6 per thousand dollars of valuation for schools, and from $10 to $11 per thousand for general government.

The bait for voters to swallow all this is a possible homestead exemption from property taxes. But the amendment is written in a sneaky way. It does not actually enact an exemption. It just “directs” the next legislature to pass one. So the exemption, if one is enacted at all, might well cover only a tiny portion of a home’s value, still leaving the homeowner with a massive tax hike.

If the amendment clears the legislature, it will go to Oregon voters during “a special election held throughout the state on the same date as the next primary election.” Unless the convoluted wording hides some kind of trick, that election would be in May 2018. If voters pass it then, we can all count on property taxes rising to ruinous levels once again. (hh)

This story has been edited to include the bill number, HJR 1, in the second paragraph.

 



30 responses to “Bill would make property tax jump”

  1. Thomas Aaron says:

    Maybe we should just not pay anyone in the legislature anymore until the books are balanced without throwing the citizens of this state to the wolves.

  2. Bob Woods says:

    “As people with a long memory know, the requirement for local voters’ approval is not effective in keeping taxes down. ”

    So much for the vote. Even when people choose to raise their taxes to provide services Field Marshall Herring condemns them for being “not effective in keeping taxes down.”

    Shameful position to take, and very Trumpian.

    • If that’s Trumpian, then so was a majority of the Oregon electorate in 1990, 1996 and 1997. (Measure 50 was passed twice, the original Measure 47 requiring a legislative fix.)

      • Ray Kopczynski says:

        No one is implying the voters back then (or now) have been intelligent. The serious disparities that have cropped up because of the M47 & M50 votes have resulted in a major disservice to the overall benefit of Oregonians IMO.

        Having burned our mortgage several years ago, I would relish getting rid of my property tax. But it would have to be replaced by some other methodology. Anyone for a flat-tax and/or sales tax to make up the difference? I didn’t think so…

        • David Boone says:

          At least pay for government services with taxes that have some relationship with the ability to pay. My house is my major asset, and source of income. My income is small. I am “land poor”. If property taxes were to be substantially hiked, I would probably be unable to survive in Oregon. I would be forced to sell my house (and pay who-knows-what in taxes for the privilege) and move elsewhere. If that happens, I hope Oregon turns into another California, with a worse climate. That’s what people like you and Bob Woods seem to want anyway. (Calling people you disagree with “Trumpian” is snarky. People on the other side of the issue can be snarky too.)

          • Ray Kopczynski says:

            “At least pay for government services with taxes that have some relationship with the ability to pay.”
            Your plan to do that sans property taxes is…?

            “My house is my major asset, and source of income. My income is small.”
            So you’re a landlord with the house you live in?

          • Shawn Dawson says:

            David, you are exactly right, as is Hasso, regardless of the willfully ignorant statements of Ray. While I appreciate some of the work you do Ray, I do believe that you do not understand the financial hardship that ever increasing house values, and thus property taxes have on folks. At this point, it seems that you are intentionally trying to remain ignorant.

            Folks who just want to live and die in their homes receive no benefit from increased house valuations. We are not happy that house valuations have risen far beyond wages over the past 15 years. This leads to an ever increasing percentage of our income going to housing. It makes it so that our children may not be able to afford houses.

            As people have to plan and save for retirement (I am one of them) the current system, while still flawed, does give me a fighting chance to predict my property taxes during my hopefully 20 years in retirement (here’s hoping I live into my 80s). A repeal of this system, will quite literally force folks into poverty.

            It’s not just for retirees, though. Property taxes, as Hasso has pointed out, are not based on one’s income, as the income tax and the sales taxes are. Thus, over a long life, incomes go up and down. A homeowner may lose a job, having to take another job for less pay, and the tax man does not care. This may happen in two person families if one person loses a job as well. Or a person may be injured and have to get by with much less money. And in my case, my income will drop by half when I retire.

            Income taxes take into account lower income. Sales taxes due as well, as purchases are directly tied to one’s income.

            But the property tax does not take any of this into account. It just steadily increases at a 3% a year minimum, and frequently much more due to bonds passed on top of that 3% increase. I have a spread sheet going back 20 years, and I have seen jumps some years of 8 and 11% due to bonds. Currently my property taxes have risen 25% over the past 3 years!

            This is beyond unfair, it is immoral.

            Loosening the current 3% restriction will hurt far more people than it helps. The argument that it is unfair that one neighbor pays less than another for similar houses does have some merit. But the solution to that is not to raise everybody’s taxes to the highest level based on property value.

            Taxes based on property value alone are already unfair. That is, why should a home owner pay more in taxes than a renter? We both use the same roads to the same extent, use the same police and fire departments, send kids to the same schools, share the same parks and public libraries.

            A totally fair tax would have all citizens contributing equally to the taxes which provide the service. However, as I am a compassionate person, I understand and accept that it is OK that some people are able to pay more than others. Thus, I’m OK with a person who makes $100,000/year paying four times the taxes of a person making $25,000. (And in reality we know it is much more than 4 times).

            I say I’m OK with that unequal contribution of citizens’ monies to fund our society (and I do happen to be one of those who is closer to 100,000 than 25,000), even though I recognize that this is not fair. I am OK with it because I have compassion for the working poor, for the person making $10 an hour who is not in my shoes, but wants to live with some chance at dignity.

            But I am not OK when taxes are assessed which are in no way tied to one’s ability to pay. When the working poor (or the laid off or the retiree or the injured) are forced to pay what they can not afford. This is the exact opposite of compassion, rather it simply shows that one does not care and does not have empathy for the situations of others.

            Regarding how to fund government services without property taxes? There could be solutions if the legislature desired. Taxes based on lots and residence alone, regardless of property value. Or property taxes as they stand now, but with the addition of a cap that takes income into consideration as well, such that home owners do not pay more than 10% of their gross income (from all sources) on property taxes.

            I’ll end now.

        • Bill Kapaun says:

          “No one is implying the voters back then (or now) have been intelligent…..”

          Case in point is the current city council/mayor.

  3. Herby wilton says:

    They can’t work with the money they have know, they have NO COMMON SENSE, a person in oregon could never live here if we the citizens spent our money the way the state does, property taxes are way way to high now, about 2/3 to schools and half the graduates can hardly read your training them for fast food hsndlers, that you want to pay 15 bucks an hour fire the teachers get rid of their union and make them teach.

    • Susan Stearns says:

      The teachers are not the problem. It’s the boatload of administrators and all of the tests that the teacher’s are forced to teach to so that they can continue to have a job. I would never trust this legislature with a blank check and that’s what their asking us to give them. They appear to be totally unwilling to be fiscally intelligent and. make the cuts that are neccessary.

  4. Terry says:

    How about NO MORE TAXES period!

  5. PutinTrump says:

    Maybe with more tax dollars they could build all those bike paths Hasso likes so much.

  6. hj.anony1 says:

    As the out-of-state corporations whistle past our graveyard??

  7. Kate says:

    This teacher is itching to pull out her red pen and correct every teacher-slamming post on the internet, but since it is past 11:30 on Valentine’s Day and I JUST finished my teacher work for the night, I will take a pass. Sigh.

    • RJ says:

      Kate, your response is classic! The first thing I notice, when I read posts that disparage teachers, is the abysmal spelling and grammar. I’m not a teacher, but I have great respect for those who take on that monumental task, and the long hours that go with it!

  8. Gordon L Shadle says:

    In a free society, there are only three ways to acquire money.
    1. Inherit it, where I freely give my money to you.
    2. Earn it, where I freely trade my skill with you, a willing buyer.
    3. Steal it.

    I lack the moral and legal authority to steal your money, therefore, government should not have the moral or legal authority to steal your money in my name.

    Taxation is stealing, plain and simple.

    • Bob Woods says:

      So says Gordon, a man whose wealth comes directly from stealing, he said it himself. You see Gordon spent almost all his life taking money from taxpayers as a public employee, thereby stealing from those same taxpayers.

      • Gordon L. Shadle says:

        Bob, unlike you I do not receive a fat, unfunded, Tier 1 PERS retirement check that adds to my ‘wealth’ each month.

        My position is simple: government shouldn’t steal. But, being true to this principle is difficult when government has its tentacles in virtually every aspect of our lives. When government steals, it is difficult to lead a normal life without being ensnared in its web.

        I don’t hold this against you, a Tier 1 PERS recipient (BTW, have you been following the PERS fiasco in regards to its unfunded liability? Shameful.).

        My take on this is that it is a positive virtue to relieve the thief (government) of its ill-gotten gains. Taking money from a thief is a good deed. You should be proud that your fat, unfunded, Tier 1 PERS retirement check accomplishes this objective.

        I would happily cash every fat, unfunded, Tier 1 PERS check like you receive, if the check had my name on it.

        • Bob Woods says:

          Hey, I’m not Tier 1 and never have been. Just another Gordon lie because Gordon never checks the facts.

          The state has all that on the website, but my February retirement pay was a total of $2,518.36 out of which I have Fed Tax, State Tax and Medicare Supplemental insurance taken out, for a net of $1,703.99. If that strikes you as a fat retirement check, maybe your brain is unusually small.

          Add in my Social Security take home after withholding and Medicare Insurance I take home an additional $1,422.90. I won’t tax your feeble brain by asking you to do addition, but that totals $3,126.89 per month take home from both PERS and SS.

          Nevertheless, let’s return to your lie where you state taxes are theft and you are the direct beneficiary of that theft. You are a receiver of stolen property and an accessory to crime. That is the logic of your lie. You deserve jail time.

          Turn yourself in Gordon, but you’ll probably have to wait for the cops and attorneys to quit laughing because of your moronic logic.

          • OK, guys. Enough with the insults, all right? It’s getting too troublesome to try to separate opinion, which I try to defend, from just plain bad manners, which have no place anywhere. (hh)

  9. ean says:

    This headline is a bit misleading, a more accurate title would be “Bill would make property tax jump for some”. My assessed value is the same as the values calculated under the measure 5/47/50 formula. They really should fix the problem and bring your property tax bill into proportion with the value of your home. There is no reason my neighbor who has another bedroom and 500 more square feet should pay less property tax than I do. Of course this solution is not revenue neutral, I would be more in favor of a revenue neutral fix to the inequity.

    • Well, since the amendment would raise the permanent tax rates, it would clearly raise the property tax for all who pay that tax, not just for some. As for discrepancies between the tax bills of neighbors, that’s inevitable as long as we tolerate a system based on assessments, which may or may not have a firm grounding in reality. The assessor decides (based on certain criteria) what your house is worth. But nobody knows what it is actually worth until somebody buys it for a definite amount. (hh)

      • ean says:

        Really seems like the tax value should reset with each sale then be capped at 3% a year.

      • HowlingCicada says:

        “””The assessor decides (based on certain criteria) what your house is worth. But nobody knows what it is actually worth until somebody buys it for a definite amount.”””

        Using nearby actual-sale “comparables” which might be a few years old, and a reasonable guess of larger-area price changes, it should be possible to come up with an equitable formula for everyone’s tax until the house is sold. Anyone should be able to appeal if termites ate half the house, etc.

  10. Robert says:

    An increase of this magnitude would force me to sell my house and move out of Oregon… where I don’t know but I’m going to look into it. I still pay on my mortgage, my income is sufficient to pay my bills, with little left over, unless I get sick and have to pay medical bills.

    Legislators! You SUCK! You give our tax dollars to criminals who shouldn’t be here (Sanctuary City/State) in all kinds of benefits that tax payers pay for… yet tax payers struggle to make it! You DESERVE TRUMP!

  11. centrist says:

    Not likely to do well in the polls, if it gets that far.
    For many of us, the bar for an amendment is very high. Many proposals should actually be statutes. They are pitched as amendments because repeal is difficult.
    Would this be subject to the “double majority” rule from the Sizemore era? (more than 50% of the vote in which more than 50% of registered voters participated)

  12. HowlingCicada says:

    Those who haven’t lived in California (as I did until 2000) might not be aware of the massive injustice caused by Prop. 13 (1978) where neighbors in similar houses in some areas had unbelievable tax disparities in the 1990s based only on WHEN they bought – as much as 10-to-1.

    Whether by design or not, consequences of Prop 13 – which limited tax rise to far less than property-value rise until a sale took place – included:

    1 – Making home owners pay more than businesses (more business leasing and less frequent property ownership change).

    2 – The young (who could least afford either the astronomically-inflated first-time home prices or the 1% tax on those prices) paid much more than their elders.

    3 – Huge tax on mobility. Those who moved to improve their lives paid much more than those who didn’t.

    4 – Housing became even more unaffordable because there was a huge disincentive for anyone to sell.

    Prop 13 was an evil scheme promoted by an old demagogue. Nothing wrong in lowering taxes. Everything wrong in disconnecting tax rates from CURRENT market value.

    If you need a more balanced view (I don’t):
    https://en.wikipedia.org/wiki/Prop_13

  13. Mark says:

    Hi Hasso for keeping an eye & keystrokes on our legislators ideas on our potential funds.
    No one yet has made a comment that property taxes are assessed by the counties.
    Is there any mention in the bill how the state would slice off its cut? Will our property taxes now be sent to Salem? At some point latter then sent back to the local level in a form that dilutes our local county, cities & schools needs? How long before the legislators will decide the money needs to be spent outside of the county from where the funds came from?
    I hope this bill never gets out of committee. And the authors names become known.

    • There’s nothing in the bill to change the system itself or redirect property taxes to the state. Property taxes are collected by the counties and distributed to local taxing districts including counties, cities, school districts and special districts. There is no state property tax.

  14. Ray Kopczynski says:

    Shawn Dawson: (02/15)

    Taxing methods… Having lived in several states – and having seen their government funding mechanisms, I have been a strong proponent of a sales tax — as long as it was coupled with a commensurate drop in property taxes. You are correct in that too being “unfair,” in that it is regressive. Nobody has offered a truly “fair” method IMO.

    “At this point, it seems that you are intentionally trying to remain ignorant.”

    100% false. I stand by what I said. If you have a problem with your property taxes, take it up with the Linn Co. Assessor. Other than trying to increase values in the URD, I have no input into their process. If you have a problem with having property taxes per se, then convince your legislators in Salem to do something about it.

    “Folks who just want to live and die in their homes receive no benefit from increased house valuations.”

    While that may be true for some, the majority of folks don’t have the luxury of buying a home and living in it for the rest of their lives. Circumstances require most to move more than once. A huge number of home owners (over the years) relish the increase in value when they go to sell their homes. And, part of the serious financial troubles have been due to folks that borrowed against that paper-gain, and then having the bubble burst…and eventually walked away from their upside down loans.

    That you have your home and are building equity in it — is a very good thing. You have an on-paper “bank” you can use. If you end up paying it off and never realize/use any of that gain… To what end? Just to will it to your heirs? They have not earned a dime of it. It’s your equity – use it if necessary.

 

 
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