AOC brought objections to the House Committee on Revenue on April 12th to House Bill (HB) 2384, which carried a laudable intention.
HB 2384 sets a limit on taxes due on homesteads of seniors 65 years of age or older living on a fixed income equal to the total amount of taxes due for the property tax year preceding the first year for which relief under the bill is allowed. The amount of taxes in excess of the limit is abated.
County assessors expressed concern about whether they are able to administer the bill. The assessors do not have the capability to automatically abate or defer a portion of property taxes levied; it would require a computer system rewrite.
AOC noted that the bill raises another question, one of inter-governmental relations. If this is sound statewide public policy, why does the bill use critical *local* property tax resources to pay for it? Current Senate Bill (SB) 160 creates the template to use for property tax exemption bills: a refundable *income tax credit* for a qualified senior homeowner with a property tax assessment greater than 10 percent of the homeowner’s adjusted gross income.
The income tax in Oregon is, after all, the major revenue source for the state, and this bill imposes state policy. Under Oregon’s rate-based property tax system, which is already cut, capped, and limited to benefit the property owner, a property tax expenditure causes a straight loss of revenue for essential local and state-shared public services.
And there is an existing program, the Senior Citizens Property Tax Deferral Program, that is state-funded and pays the homeowner’s local property taxes in exchange for a lien on the house. AOC asked if an affordable adjustment to this program could meet the purpose of the bill?
AOC also noted that the Task Force on Comprehensive Revenue Restructuring (Jan. 2009) made this short-term recommendation: “Refrain from new property tax expenditures or state mandates on local governments. This recommendation is directed at the Legislature and essentially says ‘do no harm’ that will make local government’s fiscal situation worse.”
No action was taken on HB 2384.
Contributed by: Gil Riddell | AOC policy director