How School Districts are Making Homes and Office Buildings Less Affordable

Many of you may not know but the Legislature gave school districts taxing authority without requiring a vote of the people. In 2007, the Legislature passed the SB 1036 which allows school districts to charge a construction excise tax. This allows school districts to charge up to $1.00 per sq foot on a house and $.50 a sq foot on commercial buildings with a max of $25,000 and $.25 per sq foot on industrial with a max of $25,000.

School districts can’t pass these fast enough. As the housing economy is slowing drastically, it makes no sense to be adding these types of taxes. These types of policies will continue to drive up home prices up throughout Oregon and drive businesses out of Oregon who want to expand.

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Posted by at 06:03 | Posted in Measure 37 | 10 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Jerry

    And pass them they will. Oregon is a tax and spend state run by wacked out left-wing tax and spend dems. What did you expect?


    Luckily I own my own house and am planning on staying in it until I retire. By my calculations I’ll retire and move out of this state about the same time it becomes insolvent by driving other people away due to huge tax wastes.

  • Steve Plunk

    The Medford school district has already brought this topic up. After failing to manage the recent construction bond properly they are now looking to find cash anywhere they can.

    The problem is development fees don’t work well for infrastructure improvements. The money dribbles in so districts will want to borrow money and pay it back with an unpredictable revenue stream. A recipe for disaster.

    There are serious moral concerns with charging future generations these fees while also saddling them with a national debt so unbelievably large. We are charging them twice to be members of society. How about some spending discipline?

  • dean

    Its well established that new homes mean more kids which drives the need for expanding schools. Just look at the growth in students in the North Clackamas District over the past 10 years as a case in point. Short of aboloshing public schools, how would you 3 propose to pay for new and expanded schools?

    And CD…you need to work on your math or your calendar. Shouldn’t you sell and move out BEFORE the state goes in the tank? NOt that you wouldn’t be missed….

    • Steve Plunk

      In Medford enrollment is falling so it is not well established.

      Perhaps you could address the moral implications of charging our children a “initiation fee” to become homeowners in our society while at the same time we saddle them with our national debt along with city, county, and state bonded debt for infrastructure? We are charging them twice, correct?


      Well, when I bought this house I only bought it to build equity instead of paying rent to someone else. With the usual curves of the real estate market there should be another up turn in about 10 years which fits into my plans since the whole house will be paid off. I don’t do short term investments, I’ve seen to many people lose their shirts, gotta be patient.

      Right now I have enough to by a larger house where I plan to move with my equity in this place and am keeping tabs on the market movements there.

      As far as this states tanking (which it will due to it’s indebtedness e.g. long term debt, local debt, PERS etc….) I estimate that will happen around 2020 or so. Not only will it’s own financial mismanagement come home to roost the financial crisis cause by the federal government will make raising taxes here to pay for the mistakes of today virtually imposible.

      You’d miss me Dean, this page wouldn’t be as fun without the great dicotomy of opinions on it…………………..unfortunately you do seem to be the only liberal on here lately. I did get a socialist friend of mine (common sense Carl) on here at one time but he couldn’t handle many of the unbridled free thinking ideas that perpetrate this site ,lol!

  • Jerry

    Remember, according to Dean, money is the answer to everything. Not personal responsibility, not budgeting, not cutting wanton and rampant waste, not stopping the pouring of more and more money into failed efforts, etc.
    Just money – and more of it.
    That will solve everything.
    Yes, it most surely will.

    • dean

      Jerry…you are exagerating my position. I never said money is the answer for everything. Of course it all depends on the question being asked.

      It does clearly take money to build and maintain school facilities. In the good old days a community might get together to build a 1 room schoolhouse and pitch in to hire a school marm teacher. But also the kids would only get schooled for a few years before leaving to work in the woods or on the farm. Those days are long gone, and kids are now in school for many years, and need much more specialized education than 1 low paid school marm teacher could deliver.

      Several communities have declining enrollments in spite of rising populations. Portland is in that position, as is Ashland and now Medford if Steve is correct. In those situations it is harder for the school districts to make a case for the excise tax, though older systems do have aging facilities that need periodic upgrading.

      But in the burbs around here (Damascus and NW Clackamas County) there is no question that more homes means more kids and more schools. In Damascus alone the estimate is that we will need 2 new high schools and several middle and elementary schools to handle our projected propulation increase, from 9000 at present to well over 50,000 in 20 or so years. Over $400 million in capital expense.

      Eben Fodor (in Better Not Bigger) estimated that one new single family home added over $11K in school capital investment. This is the single highest capital cost of new homes by the way, above, parks, storm drainage, sanitary sewer systrems, water systems, and so forth. We think nothing of making a builder pay for hooking up to a sanitary sewer or water system to pay hsi share of the capital cost. Why the objection to a fee on school costs? The state pays zero for school capital expenses by the way.

      Also, prior to 1980 the federal government paid a huge percentage of the costs of infrastructure for suburban growth. They have cut that way back, which is as it should be. But that means the burden is now on local taxpayers and/or developers, meaning new home owners.

      If you don’t charge the builder you have to charge the present property owner through a bond measure. And the truth is we will need to do both since the excise tax is capped at far below what is needed.

      CD…I’m happy to be the token liberal for a while. But be nice.

  • Whisper Chick

    Forgive me, but I thought the Homebuilders Assoc. helped pass that bill this last session because they recognized that good school districts make for good communities. There were compromises on both sides, but in the end, it was a policy that everyone agreed on. Thoughts anyone?

    • dean

      WC…my take is a bit different. The Homebuilders fought against school SDCs for years. Oregon was the last holdout among western states that did not have a fee on new homes to support school construction. I think they saw the writing on the wall with the Democratic legislature and Governor, so they cut the best deal they could and put a smiley face on it.

      “Conservatives” need to remind themselves that they were successful in passing a strict property tax limitation and rollback that shifted school funding to the state, but since they failed to identify any substitute tax source the schools now compete with all other state programs, and there is no funding provided for new construction. So they should support shifting at least some of the burden to the home builders. Unless they think we just don’t need schools, which by some of the posts one would have to conclude.

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