by Bob Clark
John Charles ends the meeting with “The Purloined Letter”
The Oregon House Revenue Committee met March 7 and 8, last week, on various proposals to increase property taxes, essentially proposals aimed at eliminating or weakening Measures 5 and 50. (I review these proposals in “Oregon House takes up Property taxes tomorrow,” Oregon Catalyst, March 6, 2013.)
In summarizing this meeting, I would say key House Revenue Committee members voiced resistance to referring any property tax increase proposals to voters, at this time. (This may be in keeping with Governor Kitzhaber’s agenda for this legislative session. The Governor reportedly spoke patience to those in education about tax increase proposals leading up to this year’s legislative session.) Committee Chair Barnhart (D-Central Lane and Linn Counties) voiced skepticism about referring the proposals at this time, a skepticism echoed by Representative Berger (R-Salem).
Representative Conger (R-Bend) voiced strong resistance to changing existing property tax rates and mechanisms. There were three representatives who revealed a level of support for lifting property tax limits, although the passion with which they spoke was rather low key. (Of course, those of us who want to stick with existing property tax rates and mechanisms should not take much solace in these statements of House Revenue Committee members. Lest we forget our Yogi Berra-ism: “It’s not over, until it’s over.”)
Judging from this House Revenue Committee meeting, the greatest risk to existing property tax rate limits and mechanisms very well might come via initiative measures launched by Oregon’s various state and local government employee unions. A union representative, American Federation of State and Municipal Employee Union, testified at the meeting saying his city’s police department has struggled for funding because of property tax compression; whereupon, Chair Barnhart seem to say, let the campaign begin. One has to wonder, though, if PERS (Oregon’s Public Employee Retirement System) is indeed reformed so as to curve public employee retirement benefits; won’t a significant portion of public employees and retirees be less inclined to also vote themselves a property tax increase (kind of a double whammy to their pocketbooks). So, maybe there is some hope in keeping existing property tax rate limits and mechanisms, although the drumbeat of property tax inequity stories doesn’t help instill much confidence in such a hope.
A Rather Selective Fairness Argument
The League of Oregon Cities testified in support of the proposals to lift property taxes, arguing in part existing property tax rate limits distort voting by citizens whose property tax bills are compressed. Other supporters of lifting property tax rates also presented the same testimony, saying in essence it is unfair for voters who won’t get a property tax increase because of compression to vote in favor of new local property taxes. So, the argument goes: a voter who is up against property tax rate limits doesn’t mind voting in favor of an operating levy; because he or she will not bear any of its additional costs. This begs a much larger question, as if you think it unfair for this particular voter to vote others taxes, what about the hundreds of thousands of Oregon voters who are without material real property who routinely vote in favor of property tax increases, borne by those with homes and other real property? Now, being a homeowner myself, I might lessen my opposition against increasing property tax limits if persons without material real property (non-home owners) were ineligible to vote on property tax measures. The Chair and other Representatives on the House Revenue Committee took briefly to the deeper question of tax fairness and efficiency, and opined such taxation is the matter of imperfect politics.
But who should happen by but John Charles, offering an Edgar Allan Poe Story (The Purloined Letter)
The last person of the public to testify at the meeting was John Charles, president of the Cascade Policy Institute. His testimony I believe bewildered several members of the House Revenue Committee and those testifying in favor of the property tax increase proposals. Charles offered the following analogy to describe the continual legislative deliberations about the optimal tax system: Like the detectives in the Edgar Allan Poe story who look all through the nooks and crannies of a suspect’s house for a secret letter which would solve matters, only to ignore the obvious letter sitting in plain sight on top of the desk; our politicians continually look for the ideal tax in convoluted manner ignoring the efficiency and fairness of the most routine private sector funding mechanism (user fees). Charles said why not charge more fully the persons actually using the government service? In other words, why not fund government in greater degree than currently with user fees? Why should someone perfectly capable of paying for their child’s education, for instance, not be charged directly by the public school for their child’s educational expense? Well, with that, the meeting came to a ghostly like Edgar Allan Poe ending.
Others with Public Testimony on the Property Tax Increase Proposals
Jason Williams, Taxpayer Association of Oregon, gave impassioned testimony of folks who over the years have called his organization thanking him and Don McIntire (Father of Measure 5) for helping them to save on their property taxes, thereby allowing them to manage to stay in their homes. Williams said for most folks their home represents their life’s work and sacrifice, making the proposed property tax changes particularly burdensome. A spokesperson for the Oregon Association of Realtors testified against the property tax increase proposals, citing polling data showing most Oregonians think property taxes are already too high. John Chandler, Oregon Home Builders Association, testified neither against nor in support of the property tax increase proposals, saying they were “small ball,” in that a much broader reform of Oregon tax structure is in order. Home builders are less sanguine as they’ve seen an increase in construction excise taxes, a trend in local government funding. Jan Meekcoms, State Director of the National Federation of Independent Businesses, testified against the property tax increase proposals, saying they would harm small businesses particularly during slow local economic times such as now. Spokespersons for both the City of Portland and Metro testified in favor of the property tax increase proposals, talking of financial difficulties for their government bodies resulting from property tax compression.