Multnomah County and the City of Gresham would like to give it a try

House Bill (HB) 2088, as introduced, would grant authority to a city by ordinance or resolution to require calculation by the county assessor of the Changed Property Ratio (CPR) within that city rather than county-wide.

Under Oregon’s complex property tax system, a large portion of which was embedded in the Oregon Constitution by Ballot Measure 50 (1997), new real property is put on the tax roll at a maximum assessed value (MAV) determined by a calculation. First, the property must be identified by category, examples of which include residential, industrial, commercial, machinery & equipment, apartment, or manufactured home. Each category has a Changed Property Ratio (CPR) in each county determined by dividing the average MAV by the average real market value of unchanged property of that category in the county. New property of that category is given a MAV that results from multiplying the CPR (typically a fraction of the number 1) times the real market value (RMV) of the new property.

For example, a new home with an RMV of $400,000.00 is built in a county that has a CPR for residential property of 0.7. That new home is added to the tax roll at a MAV of $280,000.

HB 2088 would authorize a city to require the county assessor to calculate the CPR for properties within the city based only on properties within that city.

AOC and the Assessors Association opposed the application of the concept statewide, because it would add complexity and uncertainty of administration; require additional time and expense to monitor, track, maintain and explain multiple CPRs in the county; and county computer software would need to be programmed to handle the change.

The City of Gresham sponsored the bill and the League of Oregon Cities endorsed it. Gresham determined that the CPR for the city is a larger fraction than for Multnomah County, and Gresham is expecting a surge in residential development. After negotiations among the city, county, AOC and assessors, Multnomah County agreed to amendments that confine the concept to its cities. On May 11th, the House Revenue Committee adopted amendments that confine the concept to Multnomah County, and sent HB 2088A to the House floor with a “do pass” recommendation. The amendments include specific provisions insisted upon by the assessors: county cost recovery up to $60,000; a commitment by the city of the city CPR for at least five years; and a beginning date of January 1, 2019, unless the Multnomah County Assessor consents to January 1, 2018.

Contributed by: Gil Riddell | AOC Policy Director