Which Is the Monster? Tax limitations, or the taxes they limit

CascadeNewLogoBy Steve Buckstein 

A City Club of Portland research panel has concluded that property tax limitation Ballot Measures 5, 47, and 50 have created a “Frankentax” monster that is “slowly but surely wreaking havoc upon its creators and their communities in ways they might not yet realize.”

Before we buy such arguments and repeal these taxpayer protections, let’s see what good has come from limiting property taxes:

So-called government revenue “losses” from property tax limitations are also “gains” to taxpayers who pay less than they otherwise would―in some cases enough less to keep from losing their homes.

Before Measure 5 was enacted in 1991, as a percentage of our income, Oregonians had on average the 5th highest property tax burden among all states. In 2010, that burden had dropped to 20th.*  In the first ten years Measure 5 was in effect, Oregonians saved over $5 billion.**

An Oregonian editorial about the City Club report points out: “The monster metaphor is worth pursuing because the perception of monstrosity goes both ways.” “Voters approved Measures 5 and 47/50, creating a ‘Frankentax’ system, because they wanted to protect themselves from a government-friendly system that behaved like The Blob, always consuming and expanding. The system that exists now, for all its faults, is designed to protect taxpayers at the expense of government, not government at the expense of taxpayers.”

Knowing the father of Measure 5, the late Don McIntire, as I did, I’m confident he would relish the opportunity to engage those who want to kill his creation. Far from being a Frankenstein, Don was one of the taxpayer’s best friends.

* “2013 Public Finance: Basic Facts,” Legislative Revenue Office,         http://www.oregonlegislature.gov/lro/Documents/2013BasicFacts.pdf

** “Halfway There: Measure 5 and the Road Ahead, Jamie Voykto, Cascade Policy Institute, December, 2003, http://cascadepolicy.org/pdf/fiscal/I_126.pdf

Steve Buckstein is founder and Senior Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

 

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Posted by at 05:00 | Posted in Economy, Government Spending, Initiative & Referendum, Local Taxes, Portland, Portland Politics, Taxes, Transparency | Tagged , , , , , , | 605 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Bob Clark

    The City Club and others are woefully off in bemoaning the unequal tax assessed valuations of similarly situated properties. Measure 5 and the other two measures were enacted in the early to mid 1990s. The fairness adjustment of these measures is already largely gone, faded. This is because most people have sold and moved since the mid 1990s, and the house price they paid or received compensated for the differences in assessments. Those that have a relatively low tax assessed house, presumably paid a higher price for the house. Those that have a relatively high tax assessed house, presumably paid a lower price for the house.

    There is no way to introduce a new property tax scheme, even a revenue neutral one, which does not introduce a new set of inequities.

    Especially for our progressive associates at the City Club and other corners of urban Portland, I would simply say as their Senate Speaker leader said most recently: [measure 5] “It’s the law of the land. Get Over It!”

  • GObill sizemore

    Measure 5 reduced property tax rates over a five-year phase in period beginning in 1991. Measure 5 did nothing to control increases in property taxes due to increases in real market value. The first year property tax rates stopped decreasing under Measure 5 was 1996. When the tax bills were sent out in October of that year, communities across the state were hit with large, disparate tax increases. Taxes went up 30 to 40 percent in some areas; 93 percent in one Northeast Portland neighborhood. Measure 5 did nothing to stop that, which is why I wrote Measure 47 and placed it on the 1996 ballot. The best campaign ad I had for my measure was the shocking property tax bill voters received three weeks before they voted.
    Measure 47/50 rolled back the big 1996 tax increases and limited future increases is assessed value to three percent per year. For the next decade, Measure 47/50 was the reason property taxes were restrained; not Measure 5. Measure 47/50 saved taxpayers approximately $10 billion over that ten year period. Hasso Hering, editor of the Albany Democrat Herald, published a study showing that Measure 47/50 was saving typical homeowners in his area approximately $1500-$2500 per year in property taxes. Measure 5 was having very little effect at that time because the real market values that Measure 5 utilized were much higher than the assessed values used under Measure 47/50.
    When the real estate bubble busted five or six years ago, property values plummeted. For some property owners, the real market value of their property dropped below their assessed value, which triggered the Measure 5 protections, which limited the overall tax rate (excluding voter approved general obligation bonds) to 1.5 percent of real market value.
    Today, a determination of whether it is the rate limits of Measure 5 or the assessed value limits of Measure 47/50 that is saving taxpayers money can only be made by comparing assessed value to real market value on a property by property basis. Whichever is the case, when real estate values start increasing again, the assessment caps of Measure 47/50 will kick in and limiting the grow of property taxes to three percent per year.
    The thing to keep in mind is that the “reformers” at the Portland City Club are not as interested in tax fairness as they are increasing government revenues. Don McIntire, Tom Denehy, and Frank Eisenzimmer (the individuals behind Measure 5) and I were all more interested in protecting taxpayers than preserving government revenues. One thing you can take to the bank is this: Any “reform” of the property tax system that comes from government or liberal groups like the Portland City Club will be aimed at increasing tax revenues, not increasing fairness, the latter being only a smokescreen to hide their true aim.

  • DavidAppell

    Relying on the supposed opinions of dead people to make your case?

    Come on — that’s lame.

    • thevillageidiot

      That is the best you can do? Call it Lame?

      • DavidAppell

        It’s the best word I know for trying to win an argument by telling us how dead people think — little difrrent than bulverism

        • Ballistic45

          I love it when David gets all Socialist on us.. Blowing snot, thumping his chest in elitist superiority, rattling the trees of big words to impress others and dragging his knuckles on the ground of Socialist failures… It is a hoot, Keep on going David, give a Left winger a microphone or pencil and enough time and they will become their own worst enemy…

          • DavidAppell

            After reading your many comments, I don’t even think you know what “socialism” means. It’s just a label you paste onto anyone you happen to hate.

          • .

            Crock!

          • DavidAppell

            Tell me, Mr Ballistic-Afraid-To-Use-His-Name: Do you get Medicare? Take a tax deduction for mortgage interest? Does your employer get to deduct his healh care expenses? Do you get a farm subsidy? Tax deductions for your retirement savings, or college savings plans for your kids?

            Do you benefit from any of these socialist policies?

          • .

            Are you a dildo remonstrating for what’s left of US, Appell?

          • DavidAppell

            Is the Post Office socialist? The military? Governmetn regulation of utility prices? Government mandates on fuel efficiency? National Parks?

            How crazy do you want to get on this?

          • DavidAppell

            What about stop signs? More damn socialism…?

        • .

          Bolshevik.

          • DavidAppell

            Even I laughed out loud at this one.

        • .

          Ballistic.

        • .

          King Con county Sleezattle submlimites love your theorem, lo to count ballots until their desired results cum in, you sic head dilld’oh!

    • Ballistic45

      Why not, if Liberals can get the dead to vote for them! They should have a say, Right?

      • DavidAppell

        Maybe Steve Buckstein can also tell us the opinions of gnomes and trolls, or witches and warlocks?

        • .

          Down boy!

          • DavidAppell

            Garble Queen!

        • Guest

          LOLOTF. David, thanks, you made my day… I enjoy your “Chimp Outs”..

    • Myke

      Isn’t the Constitution the opinions of dead people? Has their thoughts lost any value by their passing? David, your argument stands that we should learn nothing from those who have passed before. Sincerely, you are doomed to repeat some lesson from “dead people”.

      • DavidAppell

        Has their thoughts lost any value by their passing?

        Yes. Their ideas were inherently a product of their time, designed to address the problems they experienced, not that we experienced. Some of their ideas are universal; by not means, all of them. Each generation has the right to decide how it will govern itself, without being held hostage to its distant ancestors out of some misplaced idea of honor.

        Keep the good ideas, and throw out those that no longer work.

  • Rodney Stubbs

    It is all about raising taxes to pay for the bankrupt Public Employees Retirement, nothing more and nothing less. The bureaucrats are raising fees, fines, and taxes at every whim. Well it is time that Oregonians grew up and send these scallywags running. The taxpayer has no retirement program other than the bankrupt Social Security Program. And when they find out what is really behind Obamacare they will be stunned. By the way didn’t the Commander in Thief state that taxes would not be raised on anyone earning less than $250,000 per year. Well there he goes again with another lie.

  • Ballistic45

    Like all families who have to live within their means especially when they cannot dictate a raise when ever they want… Government has not learned that even after Tax Measures 5, 47 and 50.. They just keep right on spending as if there is no limit… Government NEEDS to get its needs and wants separated and quit charging up debt….

    • .

      Stop the liberal spending insanity that manifests current governmentium – for if not, most of US will $urely die dee die die offs of the cliff’s notes of Maxist Socialist DEMography and into the repositories of rauncy DEMbauchery.

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