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MailTribune.com
  • Give your property tax bill a little more thought

  • Homeowners throughout Oregon recently received their property tax statements in the mail. While the very thought of a property tax bill fills most homeowners with dread, it does provide an opportune time to share five important facts about our property tax system, while at the same time taking a closer look at the important services you are paying for.
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  • Homeowners throughout Oregon recently received their property tax statements in the mail. While the very thought of a property tax bill fills most homeowners with dread, it does provide an opportune time to share five important facts about our property tax system, while at the same time taking a closer look at the important services you are paying for.
    Fact No. 1: Contrary to popular belief, Oregon ranks in the bottom half nationally when it comes to property taxes per capita — despite being one of only five states without a sales tax — according to the nonpartisan Tax Foundation's 2013 Facts & Figures report.
    Fact No. 2: Most property tax revenue supports local schools and local public safety services. Statewide, 42 cents from every property tax dollar goes to local schools, while 22 cents go to your city. For many cities property tax collections do not cover the costs of providing public safety.
    For example, Ashland spends 211 percent of property tax revenues on public safety. Medford, Grants Pass and Klamath Falls spend 119 percent, 108 percent and 103 percent respectively.
    For many homeowners, the property taxes they owe cover the costs of keeping their neighborhood safe and emergency responders on call. It does not cover other services that residents value, such as parks and libraries.
    Fact No. 3: Oregonians pay more per capita in state income taxes than they do in property taxes. Yet the property tax is more loathed largely because of the way it is collected — in a transparent bill that lists where your money goes. Researchers from Stanford University posit that homeowners who pay their property taxes monthly in escrow don't dislike the tax as much as those that pay in a lump sum, and still obtain the benefit of seeing what their tax dollars fund.
    Fact No. 4: Sadly, our current property tax system is simply not fair. Several months ago, two homes sold in Medford for about $235,000. One will pay $4,272 in property taxes this year, the other $2,279, a difference of nearly $2,000, or $167 per month.
    Why such a large disparity? A ballot initiative in the mid-1990s locked in assessed or taxable value largely based on a property's 1995 real market value. But since values have grown at dramatically different rates since then, the tax bills for identically valued properties are now out of whack. Many property owners essentially subsidize the services provided for others, while the different tax bills manipulate the housing market to favor areas that had lower values in the mid-1990s.
    Fact No. 5: Voters often no longer have a say in the level of property tax revenue provided for local services. Property tax limitations adopted a generation ago capped property taxes. Even voter-approved temporary taxes are subject to these limits. In Ashland, the voter-approved temporary levy for the Ashland School District collected $1.2 million less than voters approved because of these caps, reducing revenue by more than one-third.
    There are things to like and dislike with our property tax system, but with this knowledge it is our hope that Oregonians better understand what their taxes pay for and think about ways to improve our system's shortcomings.
    Chris Fick is an intergovernmental relations specialist for the League of Oregon Cities.
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