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HASSO HERING

A perspective from Oregon’s mid-Willamette Valley

‘Rain tax’? This case proves it

Written July 13th, 2017 by Hasso Hering

John Robinson’s storage business on Davidson Street borders the Union Pacific main line.

John Robinson has to pay Albany’s rain tax on property he owns even though it does not drain to any city system. His case illustrates that what the city calls a storm water utility charge is not a service fee but in fact a tax.

It also shows that despite the caps imposed by Measures 5 and 50, there’s no hard limit on the taxes Oregon governments can collect from property owners.

Robinson, an Albany contractor, owns a storage business at 100 Davidson St. N.E. That block of Davidson has no storm sewers, and when it rains the property drains to the Union Pacific right-of-way on its north side. The storage business has no water or sewer service, and Robinson gets no city utility bill for it.

But since Albany started its storm water utility fee in March, Robinson does get a rain tax bill of $11.42 a month. On Wednesday, the city council rejected his request to stop charging him this fee, which residents and property owners generally pay with their water and sewer bills.

The 2016 council resolution that imposed the rain tax allows city officials to use their “discretion” to stop charging it under certain circumstances, and Robinson asked for that to be done in his case. But the city staff said “discretion” was not meant to apply in cases like his. Chis Bailey, the public works director for operations, told the council there were 1,120 other Albany properties without water or sewer service that also get charged for the storm water utility.

So why does a city charge on property pass muster under the property tax limits imposed by Measure 5 in 1990 and Measure 50 in 1997? Because the Oregon Supreme Court says so.

In two cases — in Roseburg in 1993 for storm water, and in Jacksonville in 2007 for police and fire protection — the court upheld monthly fees imposed by the respective cities. In 2007 the court said among other things that the rate caps of those tax-limiting initiatives applied only to ad-valorem taxes, that is, taxes assessed against the value of property. The Jacksonville fee for public safety, collected on water bills, was a flat $15 a month. And in Albany, the new rain tax amount is based on factors including the size of impermeable surfaces but not the value of the property.

As far as loopholes go, that one looks pretty big. (hh)

 

 



9 responses to “‘Rain tax’? This case proves it”

  1. Kim Ullfers says:

    Are you really surprised? Governments have never met a tax disguised as a fee they didn’t like.

  2. Herald Godson says:

    This case illustrates what I’ve said here before: Government serves the interest of government first.

    This isn’t about the serving the general welfare or fulfilling a real community need. This is about a coercive government imposing itself on a powerless citizen simply because they can do so. Shameful.

  3. Rolland Brower says:

    I suspect there are many properties now taxed like the one you mention as well as my home that have never been connected to the city storm sewers. The City of Portland has had for quite a few years a program that encourages and helps people who disconnect from the city storm sewers. That makes more sense

  4. tom cordier says:

    So what if there are another 1120 properties that have been hit with storm water fees.
    John appealed his and made just cause for removing the fee. Others should do the same.
    It is clear the bureaucrats are not a friend of property owners even in this little city. We pay their wages and they stiff us every chance they get under the guise of ” well others are getting stiffed so why shouldn’t you”. It is all crap.

  5. James Engel says:

    What I would like to see is at least an EPA published requirement for cities to impose this “tax”. All my $6.47 a month now is a revenue stream to the City’s general fund as reported in an earlier Albany D-H news article. I think there will be some property owners that are gonna get a real awakening when next years property tax bills arrive & that school bond “they” voted in takes effect!

  6. Shawn says:

    Alas, those of who desire low property taxes are in the minority and we live in a society where, for the most part, majority rule decides. My propery taxes went up 6.32% last year. the year before, they went up 8.62%. This year, due to the new school bond, there will be another hefty increase. The rain tax is now added on top of that.

    My taxes have risen to over 4,000 / year and as I head into retirement, will be a heavy burden as they continue to rise over the next 20 years.

    The 3% cap helps but is misleading really, as that is the minimum that taxes will rise, rather than a cap. Bonds and fees are just added on top of that increase.

    Yet, as seen with the last few bonds, as long as folks believe the money is going to a good social cause (education, police, fire), the electorate and our elected city officiials continue to pile on the taxes.

    I believe that property taxes in this state are now immoral. Immoral in the sense that they are in no way tied to one’s ability to pay. That is, they are not tied to income or spending streams as the income and sales taxes are. This results in an ever increasing percent of ones’ budget being taken by the government.

    In my particular case, when I purchased my house in ’97, taxes were $2183. This next year, they will likely be $4400 or so. My property taxes have doubled, and asi I head into retirement, my income will be exactly what it was back in ’97. So the government takes more than twice as much of my income.

    What I would like to see is a real tax cap put on property taxes, which is tied to household income. Somewhere between 5% and 8% seems reasonable. But as I enter retirement, my property taxes alone (not including the ‘rainwater’ tax) will start at 13% of my projected income of about 60,000 / year. This is of course on top of federal and state income taxes. But unlike those taxes, this property tax will continue to rise each year, and based on my spreadsheet for the past 20 years, I project that it will rise to 25% of my income over the next 20 years.

    This ever-increasing take of money, regardless of actual income, is why the property tax is immoral as it exists now.

    • John Jay says:

      You are absolutely correct, this is the tax system in Oregon. Reality is the majority of Albany residents are not voting and those that do AND receive the tax revenue are very aggressive in going after it, they vote in force and they rely on the ignorance and apathy or the electorate, why else would you change the 50% must vote rule. Another example, rents go up as a result of the increases in taxes and bonds but those that raise the bills blame it on the landlord and property owners and say things like, “We should look into rent control”, that’s how the game is played. I use to have a political science professor that quoted Alexander Hamilton “The masses are the asses”.

      Yes, we are a paying a massive amount of wealth from the community for local government, just look at the beautiful new government buildings right next to the dilapidated neighbourhoods, people will give their money to government even at the expense of fixing up their own homes. I have a property that’s on a well and is not connected to storm drains and I get charged as though I am using a massive amount of water even in the winter and storm drain services that I’m not connected to, Are they charging for services they are not rendering …Yes. Do I want to make enemies with city staff….No. You have to play the game.

  7. Tony White says:

    A tax is a tax is a tax. If government collects it for you and it’s not designed to pay for their cost (only) for supplying a specific good or service, it’s a tax. Our only way out of this, apparently, is to elect somebody new when the present incumbents’ terms end.

  8. John Hartman says:

    The Leftist Beatles, led by none other than “Give Peace a Chance” lyricist, John Lennon wrote the hit “Tax Man”
    The lyrics below are timely even to this day.

    Let me tell you how it will be
    There’s one for you, nineteen for me
    Cos I’m the taxman, yeah, I’m the taxman

    Should five per cent appear too small
    Be thankful I don’t take it all
    Cos I’m the taxman, yeah I’m the taxman

    If you drive a car, I’ll tax the street
    If you try to sit, I’ll tax your seat
    If you get too cold I’ll tax the heat
    If you take a walk, I’ll tax your feet

    Taxman!
    Cos I’m the taxman, yeah I’m the taxman

    Don’t ask me what I want it for (Aahh Mr. Wilson)
    If you don’t want to pay some more (Aahh Mr. Heath)
    Cos I’m the taxman, yeah, I’m the taxman

    Now my advice for those who die
    Declare the pennies on your eyes
    Cos I’m the taxman, yeah, I’m the taxman

    And you’re working for no one but me
    Taxman!

 

 
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