Publication Date


Document Type



City Club of Portland Bulletin, Vol. 95, No. 8, November 7, 2013

Executive Summary

Oregon’s more than 1,200 counties, municipalities, and special districts—including school districts and community colleges—rely upon property taxes to fund the public services their citizens enjoy. Ballot Measures 5, 47, and 50 define the State’s property tax system. The sponsors of these measures, along with the voting majorities who supported them, sought to do good: reduce taxes and increase the predictability of property taxes for owners of property. They succeeded at these goals.

However, like the creature in Mary Shelley’s novel, Oregon’s property tax, a Frankentax, is slowly but surely wreaking havoc upon its creators and their communities in ways they might not yet realize.

The City Club of Portland chartered your committee to research the evolution of the Oregon property tax system, to understand and explain it, to evaluate its pros and cons, and to recommend improvements. The committee adhered to the principles identified in the City Club’s 2002 comprehensive study, Tax Reform in Oregon. Those principles include fairness, sufficiency, certainty, clarity, efficiency and neutrality.

Your committee interviewed thirty-four witnesses, including tax assessors; current and former elected and appointed representatives from state and local government; lobbyists for services funded by property taxes; proponents of property tax limitations; proponents of changing the property tax system; and policy analysts. The committee surveyed assessors, receiving responses from throughout the State representing 20 of 36 counties. The committee also tracked news reports related to the property tax beginning in January 2013, and reviewed academic literature and policy analyses published by think tanks.

This report makes six recommendations to rebuild Oregon’s property tax system. Voters must act on the first, a ballot measure to be referred to the voters by the Legislature. It will take effect if passed and if the Legislature enacts the second, third and fourth. Recommendations five and six can be achieved by legislative action alone. We propose that the Legislature implement our recommendations in phases to avoid precipitous changes in tax bills or budgets.

Recommendation 1: The Legislature should place a ballot measure before the citizens repealing Constitutional Measures 5 and 47/50.

Recommendation 2: The Legislature should by statute implement base levies, adjusted annually for inflation and population changes and subjected to periodic citizen review.

Recommendation 3: The Legislature should by statute apply property tax rates to a rolling average of real market values.

Recommendation 4: The Legislature should create a task force to prepare recommendations for reestablishing local control over funding of K-12 while satisfying equalization.

Recommendation 5: The Legislature should scrutinize and scrub exemptions of property from the tax base, which should be treated as tax expenditures. Subject them to a means test and review them periodically.

Recommendation 6: The Legislature should by statute improve the equity and efficiency of property tax administration.

Your committee makes two recommendations for further study:

City Club should study a phased process for replacing the tax on land and buildings with a land or split-value tax.

City Club should study the use of performance management in local government to educate the public about the benefits they receive for the taxes they incur.

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