County Fiscal Distress Spotlighted the Week Of April 3rd

Two House Committees see AOC presentation

On April 5th, the House Committee on Economic Development & Trade held a hearing on House Bill 3374, introduced by Representative David Brock Smith to provide matching grants to fiscally distressed counties that approve local option or bond levies. Amendments are under discussion, and a work session has been scheduled before the deadline on action on bills in the first chamber. What the hearing provided was an opportunity for Association of Oregon Counties to present background material on the all too common phrase “county fiscal distress.”

The same opportunity presented itself the next day before the House Committee on Revenue, which heard House Bill 2363 introduced by Representatives Brock Smith and Carl Wilson to provide additional resources to hard-pressed county property tax assessment and collection offices. Amendments to HB 2363 are currently under discussion. Proponents of the bill, supported by AOC, were propelled by dynamic testimony from Douglas County Commissioner Gary Leif, Josephine County Commissioner Lily Morgan, and Assessors from five counties – Mike Cowles (Lane), David Arrasmith (Jackson), Roger Hartman (Douglas), Jim Kolen (Curry), and Doug Schmidt (Polk).  Doug Schmidt has been a frequent presence in the capitol this session representing the Oregon Association of County Assessors. And Diane Belt has been extremely helpful on county tax collection issues. The two commissioners crisply laid out the budget facts for their two counties, warning that the fiscal cliff is before them. The Assessors described the inner-workings of their offices and lamented the number of taxable properties that are left unfound and unassessed due to staff shortages.

At both hearings, AOC posed the question why so many counties are in fiscal distress, and gave several reasons.

For several counties, the County Permanent Property Tax Rate Authority (per $1,000.00 of Assessed Value) is too low. See the following  13 examples.

Josephine            $0.5867

Curry                    $0.5996

Coos                     $1.0799

Douglas                $1.1124

Linn                       $1.2736

Deschutes           $1.2783

Lane                     $1.2793

Columbia            $1.3956

Hood River          $1.4171

Tillamook            $1.4986

Clatsop                $1.5338

Polk                      $1.7160

Klamath               $1.7326

Contrast the average (mean) tax rate imposed by counties to that imposed by cities and school districts (FY 2015-16; per $1,000.00 of Assessed Value)

Counties              $2.82

Cities                    $5.44

K-12 & ESD         $6.92

County local property tax administration is the engine to produce revenues for public services of local taxing districts; yet the percentage of collections retained for county services, including for property tax administration, is often inadequate (FY 2014-15).  See the following six stark examples.

Curry                    6.83%

Josephine            9.22%

Douglas               9.49%

Hood River          10.83%

Coos                     11.68%

Lane                     12.10%

Statewide mean:

  • Counties                       17%
  • K-12 & ESDs                41%
  • Cities                             21%
  • Special Districts         14%

Several counties are forced by location to be dependent on federal forest management policy decisions and federal forest receipts or their substituted safety net payments (Secure Rural Schools Act of 2000 and its successors). The following data is dated, but still relevant and proportional today.

General fund loss without safety net payments (FY 2006):

  • Douglas               69%
  • Josephine            68%
  • Curry                    63%
  • Coos                     54%
  • Lane                     35%
  • Jackson                34%
  • Columbia             26%
  • Klamath               25%
  • Polk                      23%
  • Grant                    22%
  • Benton                 16%
  • Linn                       14%

[County mean – 12%]

Road fund loss without safety net payments (2006):

  • Grant                    73%
  • Harney                 70%
  • Lake                      66%
  • Curry                    64%
  • Douglas               59%
  • Wheeler               58%
  • Klamath               56%
  • Crook                   52%
  • Lincoln                 50%
  • Wallowa              49%
  • Lane                     47%
  • Wasco                  47%
  • Tillamook            44%
  • Hood River          43%
  • Lane                     42%

[County mean – 28%]

 

Federal forest safety nets (Secure Rural Schools Act and successors) have expired!

See accompanying bar chartFederal Forest Payments (AOC).

Without the safety net, national forest payments to Oregon county road funds based on actual harvest in FFY 2012 ($4.8 million) would have been about 10 percent of the safety net payment.

Without the safety net, O&C and Coos Bay Wagon Road payments based on actual harvest in FY 2013 (about $18 million) would have been about 48 percent of the 2013 safety net payment. These are county general funds.

Why are federal forest payments so important? Location, location, location.

See accompanying mapFederal and State Owned Land in Oregon (DSL).

  • The white portions are privately owned and subject to property taxation; but 97 percent is under farm or forest deferral.
  • Other colors on the map are public lands and not subject to property taxation.

See accompanying mapFederal Land in Oregon (AOC).

  • This shows federal land ownership by county.

The current statute related to public safety emergency conditions is scheduled to sunset January 2, 2018. Fortunately, House Bill 3434 would extend the sunset to January 2, 2024.  HB 3434 has been referred to the House Committee on Rules, which has no deadline for action.

Contributed by: Gil Riddell | Policy Director

2017-04-14T03:42:15+00:00 April 3rd, 2017|Categories: Community & Economic Development|Tags: |