Are Oregonians paying enough property taxes?

Dan Lucas 2012 thb Are Oregonians paying enough property taxes?

by Dan Lucas

Property taxes are very important to Oregon cities, counties and schools. While the state government’s general fund depends largely on income taxes, county and city governments get most of their tax base from property taxes, and school districts and community colleges get large portions of their funding from property taxes.

Measure 5 and Measure 50, which were passed by Oregon voters in the 1990s, served to slow the growth of property tax collections. Measure 5 limited property taxes to 1.5% of assessed value and Measure 50 limited how quickly the assessed value could be raised to 3% a year.

During the 42 years between 1971 and 2013, statewide property tax collections increased every year, except for five years in the 1990s. My property taxes when I lived in Beaverton went from $1,780 in 1990 to $3,275 in 2013 for the same house – an increase of 84% over 23 years.

Decades later, despite the steady increases in property tax collections, school districts like Hillsboro and Salem-Keizer still call out Measures 5 and 50 as sources of their budget woes.

A February 2014 research report from the Oregon Legislative Revenue Office (LRO) offers some perspective on the effect of those measures on property taxes. The report shows that statewide property tax collections in Oregon went from $2.8 billion in 1999-2000 to $5.2 billion in 2012-2013 — an 85% increase over the 13-year period in the report.

For comparison purposes, during that same 13-year period Oregon personal income taxes went from $4.1 billion to $6.3 billion — a 52% increase. Oregon’s population increased 15% during the 13-year period, growing from 3.4 million to 3.9 million. So both the increases in property tax collections and income tax collections have significantly outstripped population growth, and property tax collections have been increasing faster than personal income taxes, even with Measures 5 and 50.

All the increases in property tax collections are not evenly distributed in every Oregon county, city and other taxing districts. The LRO report notes “Property tax rates differ across the state. The rate on any particular property depends on the tax rates approved by local voters and the limits established in the Oregon Constitution.”

Home owners aren’t the only ones who pay property taxes in Oregon. Oregon businesses pay almost half of the property taxes. In 2012, they paid $2.4 billion out of the total $5.2 billion in Oregon property taxes.

As an example, the top two payers of property taxes to Marion County are PGE and NW Natural Gas. And like homeowners, those aren’t the only property taxes they pay in Marion County. PGE and NW Natural gas also pay property taxes to the City of Salem, Salem Mass Transit, Salem Suburban Rural Fire Protection District, Salem-Keizer School District, Chemeketa Community College and to the other cities in Marion County and their comparable taxing districts — as well as in the other counties in Oregon. So part of all of our monthly electric and gas bills goes to paying those property taxes.

With an 85% increase in statewide property tax collections over the last 13 years, it would be hard to make the case that Oregonians are not already paying enough in property taxes. Additionally, the valuation of your home may have little bearing on what you’re able to afford to pay in annual property taxes. That is especially true for those on fixed incomes.

To read more from Dan, visit www.dan-lucas.com

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Posted by at 05:00 | Posted in Local Taxes, Taxes | 26 Comments |Email This Post Email This Post |Print This Post Print This Post
  • rharris78

    According the the Bureau of labor statistice. if yo paid $1780 in 1990, then adjusting just for inflation, you should be paying $3,172 in 2013. So the $3,270 you were actually paying is pretty close.

    But, how much of that went to schools in 1990 and how much in 2013? Was there any compression? Did parks, METRO, library bonds, special taxing districts start taking a chunk?

    I’d be interested if you adjusted these for growth AND inflation.

    • Bob Clark

      I believe 1990 is not a useful base year, because Measure 5 and 50 had a one time reduction or pause in property taxation; with this occurring in the early 1990s. Inflation also ran in the 3% range for most of the 90s, but since the new century inflation now averages only about 2%. By comparison, property value tax assessments are allowed to rise 3% per year.

      In the City of Portland, property tax rates have increased at a rate of 5% per year over the past ten years, whereas per capita income has risen only about 2.5%.

      Government has gotten so use to having steady increases in tax revenues the unofficial problem for government officials is to find new ways to spend the money, or else lose it back to citizens. Organizations like Metro and the Energy Trust of Oregon have countless planning meetings trying to either scalp more free federal government monies, or in the case of the Energy Trust of Oregon, trying to expand their expenditures outside of conservation.

      • Jonathan

        I don’t live in the Portland metro area, but my property taxes have been very well controlled, actually going down a couple of times in recent years. If there is a problem in Portland, that is a problem for Portland, not the rest of Oregon.

      • Myke

        Since its Portland who has been electing our State leaders, who really have no interest outside of Portland, evidenced by the declining economic vitality of the rest of the state, its only appropriate that Portland’s tax payers become the financing arm of the rest of Oregon. Thanks!

      • rharris78

        Well, it was Mr. Lucas who used the 1990 as a base year. Not me. Perhaps it’s not the best year to use. Which sort of goes to show you how difficult it is to extrapolate from a single point or factor. It may be useful to start somewhere, but there are many factors that should be considered. As you point out.

    • Jonathan

      Very astute about the inflation adjustment. Practically within “the noise” his property taxes are unchanged.

      The rest of his analysis is just about as silly — no accounting for inflation, overall growth of the economy in Oregon, growth in population.

      Basically, taxes in Oregon are pretty well controlled, including property taxes — so the state and local government share is growing at about the same rate as the pie. Maybe not a case for raising taxes, but not a case for cutting, either, unless someone wants to make the case honestly.

      • guest

        Peals akin to a David Jonathan Appell .

      • Sally

        Yes, very astute. According to the same math, my iPhone should cost $2345.
        Great argument. Perfect. I only wish I was that smart.

        • Jonathan

          Maybe your smart phone can teach you about inflation.

          • period, et al.

            Resumed lesions garnurd from Viagra intonation, pilgrim, say swat?

          • .

            Troll!

          • p,ea

            Your drum Troll roles on like a Studebaker in express need of Avante’guard supercharger.

          • Sally

            Yes, and inflation would dictate that large screen TVs should be 10K at least when you factor in inflation. How idiotic can you get…not everything always costs more due to inflation….but, I guess you would not want to admit that….anyway, if you want to send more money in, why don’t you????
            Cause you are too cheap?

          • Jonathan

            The inflation index is a composite. Of course some things go down in price because of rapid technological change, mainly. Frankly, you are being moronic.

        • rharris78

          So you’d like your pay to be indexed to the cost of an iPhone?

  • Bob Clark

    Unfortunately, unless the GOP can stalemate the Oregon Senate, property tax limits will be part of the legislative agenda next year. The weasels like those at Portland City Hall and other league of Oregon Cities will push the “fairness” issue for restructuring property tax law; but no one should be so dump as to think these weasels won’t make sure the changes are revenue neutral. In other words, “fairness” is code word for a new round of property tax revenue grabs by Cities like Portland, where public conspicuous consumption is job number one. How about some more make work cemented bio-ditches in what were once kid play friendly streets.

  • Grazyna Mianska

    How about thinking out side the box? Do away with the property tax! Get a different tax system for the schools.

    • Jonathan

      What do you suggest?

      • Myke

        Federal welfare! Oh, Oregon is already on that.

      • CherryAnn1000

        The only alternative is a sales tax, which I don’t like, either, but if they would do away with property and income tax, I would get on board.

        • Jonathan

          I think a partial elimination of income tax in exchange for a relatively small sales tax is the most that Oregon has any chance of being willing to do. Elimination of local property tax not on the table.

          I think Oregon’s high income tax structure is completely out of date.

          • Roger Enout

            Another lever of governmentium to pay for!

            But, butt, sorely you jest, monsewer ad infinitum extraterritorial insurgi-turnip-trucker !

  • CherryAnn1000

    I live in Salem, and they have been wringing their hands and gnashing their teeth for decades that they just don’t have enough money for education. Since I never sent my kids to public school, and now have no kids in school, I resent every penny filched from people like us who have to fund these worthless public schools when we don’t use them and don’t have kids in them. While our property taxes have not increased nearly as much as the authors, ours have still gone up as I imagine most of you have. Maybe if the schools would actually educate kids instead of enabling more of us might feel better about public education. As it stands, no more money, and I don’t anticipate my opinion changing any time soon.

    • Sally

      Just remember one thing. Teachers work with kids 175 days each year for about 5 hours each day. That is HARD. And they only make 70K or so when near the high end of most districts’ pay scales. And their PERS has been decimated by the courts. So, these “high” property taxes are only gong higher so we can pay these professionals more of a living wage. Remember, most of them went to college and worked really hard to train to become teachers. Plus, there is a lot of continuing ed required, so not every summer is free time. Plus, they need more money to pay their union dues, even if they are not in the union. Most of all, they are subject matter specialists and know what they are doing just like doctors and lawyers and CEOs. They need commensurate pay. Now.

      • Fiend of CherryAnn 1000

        Sally “Froth” – ‘peering to have undergone a two stage process – one, brain washed by the NEA – two, bleached like the flags waving atop the Brooklyn Bridge.

        In essence-liability, staged performances fruitlessly worth any $tock in trading for.

        Take it from mime, silence is golden, articulate common sense or find no amenable audience at all, y’all.

        “I have always noticed that people will never laugh at anything that is not based on truth.” – Will Rogers

  • David Johnson

    Since Barky came to power my property value went down by 26% but my property taxes keep going up every year. I guess the amount the government steals for property taxes has nothing to do with the value of my property.

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