Lawmakers debate experimental property tax scheme

By Taxpayers Association of Oregon

This week, the House Revenue Committee held a work session on HB 2972, a bill that proposes a study for a new land valuation tax system in Oregon. Not a traditional property tax, the proposal is an obscure form of taxation that’s only used in an estimated 25 cities in Pensilvania. Henry George, an economist wrote Progress and Poverty in 1879, was the primary advocate for the tax system.

In many ways, the proposal, if adopted by a subsequent legislature, and then passed by a referral by a vote of the people, the concept would replace Oregon’s tax system adopted though Ballot Measure 5.

The proposal would study the impact of changing Oregon’s property tax that focuses on land values, and not the improvements on the property. In other words, the land values would be evaluated primarily based on zoning, rather than improvements made by the land owner.

As such, Oregon’s land use system creates an additional complication to implementation. Where property values within the UGB have increased valuations based on various public investments like sidewalks, and public transportation, Oregon’s forest and farm land could see sizable increases to their property based on the productivity of the property.

The good news, HB 2972 is only a study. And it’s unclear if the House Revenue Committee will take action on the bill this session. The Work Session (for discussion only) occupied the Revenue committee’s agenda during a slow period in the legislative agenda.

The Taxpayers Association will continue to monitor and engage on these issues on behalf of Oregon’s taxpayers. The next major milestone for the 2021 session is Wednesday, May 19, when the final revenue forecast will be presented, setting the budget for the 2021, 2022 biennium.

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