Rural Oregon counties face many challenges related to funding. One issue that has recently been unearthed is property tax reappraisal, and the stymied process for most counties.
Curry County’s Assessor and Tax Collector Jim Kolen has the solution to this issue, through collaboration with the following stakeholders: Association of Oregon Counties, League of Oregon Cities, Special Districts Association of Oregon, Oregon Department of Revenue, Oregon School Boards Association, and Deschutes, Polk, and Curry County Assessors, Kolen generated interest in a mechanism to obtain missed or lost revenues.
Kolen’s solution is to create a pilot program housed in Curry County to provide additional funding of $125,000 to employ an additional 1.5 appraisers, reducing the rotation to six to eight years. This is done in HB 2383. This legislative proposal seeks $75,000 from the state because almost 60 percent of property taxes are collected to fund schools, a big ticket issue for the Legislature this session. The remaining funding needs would be distributed among stakeholders, and each have agreed to pay their fair share. If passed, this bill could put Curry County in a strong position to finance high need services for its residents, move beyond the current backlog, and be assured the county is not losing additional funds.
Prior to Measures 5 and 50, assessors were on six year reappraisal timeframes. Unfortunately, as budgets tightened, reappraisal rotations moved to a slower rate. For Curry County, the rotation timeline moved to around 16-18 years.
This large change in reappraisal years meant significant loss of revenue for the counties. Curry County has a very low tax rate, just under 60 cents per $1,000 of evaluation, and from the 1950s through 1980s, Curry County also received significant funding from timber harvested on federally owned timber land. Many rural Oregon counties relied heavily on timber revenue to fund county services and did not seek high property tax rates.
Due to the Endangered Species Act listing of the spotted owl, the implementation of the Northwest Forest Plan, and the subsequent lawsuits starting in the 1990s, timber harvest and revenue declined. At the same time, Measures 5 and 50 made county property tax rates permanent, locking Curry County into their extremely low rate. This perfect storm resulted in diminished revenue with few alternative or band-aid funding options.
The revenue decline stifled many timber counties, forcing cuts across the board, including assessor budgets, resulting in slowed timelines for reappraisals. This meant even less revenue from property taxes for counties.
Building permits serve as a good flag for county assessors that appraisal value will change, however, there are many circumstances where permits are not sought or are misused. Fortunately, Curry County has been able to keep up with known permitted changes, but there are numerous examples of missed revenue opportunities from non permitted property or misused permits. One example of misuse is a property that claimed to have added a garage, but instead created an addition and remodel. Others built driveways, single family dwelling units, and more without permits. All of these examples would result in a greater appraised value. With current funding, this type of property addition may not be identified until their assessment within the 18 year cycle. Once a property is discovered, an assessor can collect tax on the current year and the five preceding years, but potentially could be missing out on 13 years of tax revenue. HB 2383 would resolve the backlog of taxes and keep property taxes current.
During the first public hearing on HB 2383, Special Districts Association of Oregon Lobbyist Hasina Wittenberg said of Kolen and his proposal in her testimony, “he’s done every bit of work to get the bill to this point and really deserves every bit of the credit.”
The bill was moved out of the House Committee on Economic Development in early April and awaits a hearing in the Joint Committee on Ways and Means.
To view testimony on this bill, click here.
Contributed by: Megan Chuinard | Public Affairs Associate