It is no news that the Oregon property tax system is a total mess, but efforts to fix it so far would only make it worse. One such Band-Aid is House Joint Resolution 21, which calls on the voters to amend the Constitution to impose a minimum county tax rate of $2 per thousand everywhere in the state.
The idea is to help counties whose permanent tax rate, set by Measure 50 in 1997, is less than two dollars. Those counties are Columbia, Lane, Klamath, Polk, Clatsop, Hood River, Douglas, Coos, Josephine, Curry, Tillamook and Linn.
In Linn County, voters have generously approved hefty local option levies to support law enforcement to the point where the total county tax rate ($4.29) is the sixth-highest in the state. In many of the others, though, voters have refused to step up and law enforcement and other county government functions have been cut way back.
Things got so bad in some counties that Gov. John Kitzhaber, before he resigned, had considered how the state could step in. One way out is HJR 21, on which the House Revenue Committee held a hearing in in early May but has not yet acted.
One of the provisions in the bill is that compression — the system of forcing the sum of all operating tax levies on a property to fit within the constitutional rate lid of $15 per thousand dollars of assessed value — would not apply to the proposed $2 minimum tax rate of counties. Benton County Commissioner Annabelle Jaramillo testified for the measure and said that the compression exemption would apply only to the counties that benefit from the $2 rate. That seemingly would affect Linn County, where the permanent county tax rate is a mere $1.27 per thousand, and where HJR 21 would force it up to $2. So this proposal would reward Linn County voters, who have voluntarily raised their property taxes, by forcing them to swallow another two-step increase — on the rate itself and the elimination of compression — without a local vote. And that would not be right.
The property tax system needs fixing because even well informed citizens don’t understand all of it, and because it is unjust. It has resulted in unequal taxes on like properties, and it has produced weird results when a big taxpayer wins a refund. (The Hewlett-Packard refund case in Benton County is still on appeal, but the early result was that taxing districts such as Albany were billed for part of the refund due HP even though the city and the others don’t benefit from HP’s taxes.)
Quick fixes like HJR 21 are not the answer, though. They create only more complications. We need a total overhaul of the system that procides simplicity and fairness along with tax limits at least as strong as those we still have. (hh)