Under Oregon's current system, statewide limitations can prohibit local voters from raising their own taxes to support services they demand. Measure 5 limitations restrict general governments (cities, counties and special districts) and schools to levying no more than $10 and $5 per $1,000 of real market value respectively. Any taxes levied in excess of those limities are reduced until the limitations are met, a process known as compression. Temporary taxes that are in addition to the municipality's permanent rate and are approved by voters to provide funding for services, such as public safety or school services, are compressed first under this system. As a result, voters residing in a municipality in compression are limited in their ability to raise revenue to support services they desire.
Compression is a growing problem for local governments statewide. Since 2008/2009, total revenue lost to compression has increased from $51 million to $212 million in 2013/2014 (pictured below, generated by League of Oregon Cities).
This year 90 percent of school districts, 34 out of 36 counties and more than one-half of all cities in Oregon have seen property revenues reduced to statewide caps. Pictured below is Baker City's revenue loss due to compression over the last 7 years.
Last May (2014), local voters approved 16 of 21 (76 percent) temporary tax measures. While voters may still be concerned about the state of the economy, in many instances they clearly realize the value of local government services and are willing to tax themsleves to provide those services. Whether or not any local voters approve temporary taxes outside of compression is irrevelant. What matters is that voters currently do not have the freedom and opportunity to do so. In order to see property tax reformed, contact your local legislature. For more information please reference the League of Oregon Citie's website here.Add a comment