Although few of us relish paying property — or any other — taxes, there are things that make the task easier. Knowing that people in similar homes will pay similar amounts is one; knowing that growth in your tax bill is predictable is another; being able to understand the system is a third. In Oregon, property taxes fail on all three counts, at least some of the time.
Take predictability, which has been especially damaged by the housing slump that began in 2008. While many homeowners have seen property taxes rise through the recession, others have actually seen their bills go down, and county assessors cannot say for certain what will happen to your bill in the coming year. Some Oregonians may well be in for a rude shock, while others will continue to plug along as usual, with slow but steady increases. For the same reason, assessors cannot tell taxing districts with any certainty how much money to expect as they prepare budgets.
That’s because voters approved Ballot Measure 50 in 1997, a legislative fix to two previous attempts to limit property taxes. Unfortunately, no one could have foreseen the decline in home values that would begin just 10 years later, and Measure 50 provides predictability only if housing values increase or remain fairly steady.
As for equitability, it went out the window with Measure 50. A number of different elements, including when a home was built, now contribute to the formula on which your property taxes are based, and similar homes in similar neighborhoods can be taxed at different rates as a result. Voter-approved bond measures can add to the inequity.
Finally, there’s transparency, the ability to understand why your bill is what it is. It’s here that Oregon’s system really fails most of the state’s residents. The current system is complex, and even county assessors can explain it only if armed with a fistful of caveats. The recession has served to make the problem worse.
All this begs for reform, though lawmakers who talk about reform this year generally mean reform of the state’s Public Employee Retirement System. The governor, meanwhile, is talking tax reform but has focused on income and consumption taxes, not property taxes.
We’d like to see property tax reform become part of the discussion. Some experts say it’s difficult to impossible to include all three elements — predictability, equitability and transparency — in a single tax, but that’s no reason not to try to improve mightily on what we now have.