The AOC Governance and Revenue Steering Committee has unanimously adopted support for adequate assessment and taxation funding as its priority for the 2023 Legislative Session. Most county commissioners, judges, and chairs are aware that property taxes are the largest source of revenue for Oregon’s county governments. Fewer may be familiar with the funding stream that county assessors receive from the state to assist in the appraisal function that nets those valuable property tax dollars. Unfortunately, state assistance for county assessment and taxation services has steadily declined in recent decades. This article will attempt to shed some light on the history of that decline.
1989: The Birth of CAFFA
When Oregon’s economy declined in the 1980s, alarm bells went off about the inadequacy of funding for county assessment services. Legislators became concerned that discrepancies in funding levels across counties would lead to unfair outcomes for taxpayers. They subsequently created the County Assessment Function Funding Assistance (CAFFA) grant program to stabilize the system. The CAFFA grant program is funded through transfers from county assessment and taxation funds held at the county level, and is made up of a combination of revenue from interest on delinquent tax payments, a portion of certain document recording fees, and, historically, some state general fund allocations. Counties are able to access CAFFA grants provided that they certify adequacy requirements specified in ORS 294.175.
Declining Adequacy
The first five years of CAFFA’s existence saw county assessment and taxation expenditures offset by roughly 23 percent. This offset increased to a high of 32 percent annually in the early 2000s before it began its decline to the current offset of just 16 percent. Part of the reason for this decline was that the state stopped providing a general fund allocation, thus reducing the amount of state assistance available for assessor offices. Put simply, county expenditures are now steadily outpacing CAFFA distributions. This decline in system adequacy can be seen in the chart and graph below, courtesy of Oregon Department of Revenue data.
| CAFFA Year | Total Certified Expenditures (Rounded to Nearest Million) | Total CAFFA Distributions (Rounded to Nearest Million) | Percentage of Expenditures Offset by CAFFA |
| 1990-91 | $53 | $12 | 23% |
| 1991-92 | $55 | $12 | 22% |
| 1992-93 | $58 | $13 | 22% |
| 1993-94 | $59 | $14 | 24% |
| 1994-95 | $61 | $15 | 25% |
| 1995-96 | $63 | $11 | 17% |
| 1996-97 | $64 | $12 | 19% |
| 1997-98 | $59 | $12 | 20% |
| 1998-99 | $62 | $14 | 23% |
| 1999-00 | $64 | $15 | 23% |
| 2000-01 | $65 | $19 | 29% |
| 2001-02 | $69 | $22 | 32% |
| 2002-03 | $72 | $23 | 32% |
| 2003-04 | $75 | $24 | 32% |
| 2004-05 | $80 | $21 | 26% |
| 2005-06 | $84 | $21 | 25% |
| 2006-07 | $88 | $20 | 23% |
| 2007-08 | $88 | $19 | 22% |
| 2008-09 | $92 | $17 | 18% |
| 2009-10 | $92 | $20 | 22% |
| 2010-11 | $94 | $20 | 21% |
| 2011-12 | $95 | $19 | 20% |
| 2012-13 | $95 | $21 | 22% |
| 2013-14 | $98 | $20 | 20% |
| 2014-15 | $99 | $18 | 18% |
| 2015-16 | $103 | $18 | 17% |
| 2016-17 | $105 | $18 | 17% |
| 2017-18 | $108 | $18 | 17% |
| 2018-19 | $113 | $17 | 15% |
| 2019-20 | $119 | $19 | 16% |
| 2020-21 | $121 | $22 | 18% |
| 2021-22 | $125 | $20 | 16% |
| 2022-23 | $126 |
Next Steps For CAFFA
Without additional state funding, administration of Oregon’s property tax system faces the same threat that it faced in the eighties. As assessor offices find themselves unable to inspect properties in a timely manner, properties will be unassessed or inaccurately assessed. State funding of CAFFA could well provide more funding for counties and other taxing districts as those missing properties get added to the tax rolls.
For questions, or feedback, please contact AOC Legislative Affairs Manager, Tyler Janzen.
Contributed by: Tyler Janzen | Legislative Affairs Manager