what if we put an accurate value on everyone's home? REVOLT!

Nope, the "revolt" already happened, by statewide initiative and popular vote years ago, and the result was, property tax assessments in Oregon bear no resemblance to reality.

There was a lively exchange during the Q & A period at City Club on Taxes in general. It was said pre measure 5 business and commercial paid 60% of taxes, where now individuals pay 70% of the taxes used to run the governement. Is this true? When looking in the Tri-County area, there is not such a gap between the AV and RMV. In Clackamas 20% more of the value of a home is taxed. What is fair with taxes? What would be a good and fair tax system. What split should there be between business and individual taxpayers.

Your use of the word "miraculous" to describe your property taxes going down is accurate - I am also in the Portland School District, and my tax bill went UP 6.3%. They upgraded the value of my palatial .18 acre lot 73%. Unbelievable. Imagine my terror if they HADN'T rolled back the school levy?!?

They upgraded the value of my palatial .18 acre lot 73%.

I didn't think that was allowed under Measures 47 and 50 (or whatever numbers they were). Readers?

Gresham schools recently awarded salary increases effective July 1, 2004.

Sandy (Oregon Trail School District) is charging that demands for pay increases for the already completed 2004/05 school year is not something over which the teachers can lawfully strike.

Adjusting past pay for past work? (Oregon Trail School District, Sandy Oregon)

I even posted a couple pictures from the front line.

"2005/06 average teacher salary with benefits & associated payroll costs: $72,615"

Does that number speak for itself?

Gresham taxpayers, income or property, might look at the gift that was recently delivered to the teachers for the prior year, and it's impact on next year's (or the following year's) adjusted PERB demand.

The regional income tax is dead.

Portland Police were there (Sandy) too, for labor support. See pic.

Property tax - just like fun only different. Here is the simplistic version of our current two-tier system which ignores the impact of Measure 5 compression (yeah, its still around too) which may or may not play a modest role in determining your ultimate assessment:

Measure 50 limits the growth of Maximum Assessed Value (MAV, your 1995 assessed value less 10% compounded at 3% for each year after 1997 and adjusted for exception) to 3% a year unless certain limited exceptions apply (improvements to your property, subdivision, etc.). Your taxes are based on your Assessed Value (AV), which is the lesser of your Real Market Value (RMV, nominally what your property would sell for in an arm's length transaction on the assessment date) or your MAV. Bottom line, your property's RMV could double in a year but since your MAV can only go up 3% and MAV is usually lower than RMV, unless your rates change (new bonds, voter approved special levies, etc.), your taxes based on the AV should not go up more than 3%.

Caveat emptor - its possibly the whackiest property tax system of any state in the country and, by its own terms, Measure 50 exempts itself from constitutional uniformity.

So, Greg, if you didn't improve or subdivide your property, I can't see how a 73% increase in AV would be permitted. I suppose if your RMV was previously way less than your MAV, it would be theoretically possible, but that would be very unusual.

They upgraded the value of my palatial .18 acre lot 73%.

I didn't think that was allowed under Measures 47 and 50 (or whatever numbers they were). Readers?

I bet I know what happened I think it happened on my taxes too, they depreciated my improvements and increased my land, but the increase in taxes on the whole shabang was the 3% but the increase in lot value was a lot more. I'll dig it out tomorrow and do the math.

This would be smart as the house is older, and when you remodel you increase the value of the house and that increase doesnot fall under the limit. So if they use the depreciation of the house and the full 3% on the lot, then it will be a fat city for taxes when you upgrade the house.

I will dig it out tomorrow and get the % but I bet the improvements decreased in value on this

Was curious and did the math.

Land increased 9% House depreciated 8% overall taxes, surprise surprise right on 3%. Strait line depreciation would be 30 years or between 3 and 4% ususally a house structure is more like 45 years or between 2-3% depreciation. It seems odd thought that it appreciated in years past. The house was built in 71, and we replaced the roof, HVAC, windows, etc. So it seems odd. other than for theory above.

Caveat emptor - its possibly the whackiest property tax system of any state in the country and, by its own terms, Measure 50 exempts itself from constitutional uniformity.

It's not just that its a wacky system...it gets wackier every year, with assessed values becoming more and more divorced from reality with each new tax year.

As some home prices skyrocket more than others, say in gentrifying neighborhoods, that 3% annual increase comes no where near capturing actual values. So some "assessed values" can be 25% of "real market value" or even less. Plus, the more valuable the property, the bigger tax break, i.e. a $100 million office tower assessed at $50 million. And even new construction benefits, assessed at a fraction of its real market value, developed with a formula that involves the examination of goat entrails.

The voters got conned on this one, I'm afraid. Yes, high property taxes were a problem. But this "solution" has a Robin-Hood-in-reverse effect that, combined with absurdly generous tax deferments on expensive condos, gives this system a very rank and unpleasant smell.

Is corporate taxation a progressive answer to revenue shortfalls or just another game of "hide the salami"?

Econ. 101 question: Who exactly pays the cost of corporate taxes? Is it *someone else*, or is it *us*?

Answer: Only individuals bear the cost of corporate taxes:

* customers, in the form of higher prices
* employees, in the form of lower wages
* shareholders, in the form of lower dividends
* everyone else, in the form of higher inflation / lower purchasing power

Sorry Blue Oregon. Corporate taxation is simply a case of politicians shifting the cost of government (hiding the salami) by enslaving corporations to be tax collectors. This scam is not only legal and acceptable, but even a Kleptoratic shibboleth. What a shame. There should be more transparency so consumers can know what it truly costs.

Note:
shibboleth - a custom, principle, or belief distinguishing a particular class or group of people, esp. a long-standing one regarded as outmoded or no longer important

"And even new construction benefits, assessed at a fraction of its real market value, developed with a formula that involves the examination of goat entrails."

In theory, any "exception" (e.g., new construction) receives a new MAV value that is the product of the exception property's RMV times the Changed Property Ratio (CPR, the ratio of RMV to MAV for similar properties in the same area). So if the average MAV of all houses in a neighborhood was 75% of the RMV for those same houses, any new house would have its MAV set at 75% of its new RMV. So, in theory, there remains some level of parity between similar properties.

Of course, if individual properties appreciate at different rates (TaxQuestions - most real property's actual market value does not depreciate; the schedules you refer to may be applicable to federal income tax depreciation for business property but are inapplicable for determining market value in most cases), then disparities will grow over time. This is all the more true of different classes of property (apartments vs. houses vs. offices etc.).

The good news - as convoluted as Measure 50 (referred by the legislature and passed by the voters) is, it is substantially better than Sizemore's back-of-the-envelope Measure 47 (also passed by the voters) that it replaced. Now don't you feel better, secure in the modern version of mob rule?

In theory, any "exception" (e.g., new construction) receives a new MAV value that is the product of the exception property's RMV times the Changed Property Ratio (CPR, the ratio of RMV to MAV for similar properties in the same area)...

Like I said, goat entrails. RMVs (Real Market Value) usually have little relationship to ASPs or CTBTDTs (that's "Actual Sales Price" and "Cost to Build the Damn Thing") so multiplying THAT figure by the square root of your neighbors average birthday gets you...?

The problem with the whole system is like so many other things the means is so disconnected from the end that no one understands or trusts the system anymore. In Portland Property Taxes are only part of what is collected, there is the business tax which, the Hotel/entertianment, the franchise fees for utilities.

There are not rules of the game anymore except greed of special interests that twist things and information to suite thier whims. It is just so absurd, the whole thing needs to be thrown out and started over and people need to understand what they are paying for, and that it is their fair share.

Thanks for the thoughts - Here's a bit more detail about my situation. I purchased the home in spring of 2004 and have done no improvements or subdivisions. Last year's assessed value (for tax purposes) was 58% of my purchase price (with an arms' length transaction). This year's assessed value - with the 73$ increase in land assessed value, and a 4% INCREASE in structure value (huh?) - my assessed value is now 63% of my purchase price last year. My assessed value went up 9.5% and my actual taxes went up 6.3%.

I'll be appealing the bill - anyone have creative thoughts? I've downloaded all the relevant info from portlandmaps.com - including the neighbors' lots/taxes, etc., but I'm at a bit of a loss how to argue it since I don't know what happened to their assessed values this year. I'd appreciate any other input. Thanks in advance.

Elves - Do I have to have owned the property in 1995 to qualify under Measure 50?

The goat entrails are looking more and more like the source of logic.

Before filing an appeal, consider calling the assessor's office and asking about the aspects of your assessment that you don't understand - you've got plenty of time and they have a real incentive to explain what they've done. You both may learn something that will save everyone a lot of time and trouble. Rather than simply offering more ad hoc voodo reasons for things that may actually have a real explanation, most blog readers would likely be interested in the outcome. Of course, it could actually be the divination of owl's entrails (my personal preference).

Since Measure 50 is enshrined in the constitution, applies to all property, and expressly prevents recalculation of the 1995 value, it doesn't matter whether you owned your property in 1965.

Das it - I'm off to frolic with the wood nymphs.

"I'll be appealing the bill - anyone have creative thoughts? "

I want the full tax roll data from the county, but the lowest price thus far is 350 bucks, that I do not have.

I want to match the distribution of qualitative features of homes against a distribution of qualitative features of incomes in a little economic report. I want to attack, in aggregate, the methodology used by the county to make their determinaiton. My theory, 3 percent down, with an ARM or interest-only loan, is not an arm's length transaction.

Measure 5 -- the RMV ratchets up, with a prohibition on lowering the RMV.

The assessors office needs to get hard look by someone.
IMO.
I have found more than a few unexplainable low balled assessments.
One was the Eastbank Commerce Center
82,000 sq. ft building, bought for $3.1 million, got another $4.4 million in renovation.
$7.5 million in purchasing and renovating the building
Yet, the building assessed at only $1.1 million?
I called the assessor myself about this one and got no explanation.
They have none. So what's wrong?

Here's the Portlandmaps.com link

http://www.portlandmaps.com/detail.cfm?action=Assessor&propertyid=R149846&state_id=1S1E03AD%20%201400&address_id=646153&intersection_id=&dynamic_point=0&x=7646872.348&y=681468.816&place=1001%20SE%20WATER%20AVE&city=PORTLAND&neighborhood=BUCKMAN&seg_id=139532

The assessors office needs to get hard look by someone. IMO

Years ago I forwarded to the County Auditor a list of big-ticket property sales in downtown, all of which were millions of dollars more than "Real Market Value" would suggest. It got a big shrug.

We don't assess properties on Real Market Values, but as has been pointed out, they help set assessed values for new construction, by being part of the formula. Wanting some reality in our property tax system shouldn't be all that radical a concept.

Accurate assesments require trained professional staff, so the competing reality is money. Assessor's offices took big hits after Measure 50 forced cutbacks in local government funding. The obvious reason was the new contitutional disconnect between market value and most assessments. Sure, due to reduced staff there are other problems such as inaccurate ratios that result in incremental assessment errors, but fixing the problems might require local government to choose between more assessment staff and _______ (pick your boondogle and add [rim shot] where appropriate).

Accurate assesments require trained professional staff, so the competing reality is money.

The consistent theme, however, is grossly under-valuing commercial properties, often by the tens of millions of dollars. I think what's lacking is less a "trained professional staff" then a committment to see that assessments are fair. I don't know of any examples where commercial property has over overassessed because of a lack of professional trained staff.

If you own a $150,000 home and are underassessed by $15,000...but someone else owns a $100 million building underassessed by $40 million, we're stealing from the poor to give to the rich as far as taxation goes. That's not just unconstitutional, its immoral.

If no properties, commercial or otherwise, were overassessed, there would be no appeals, right? Check the appeal statistics and you'll find thousands of folks think their properties are overassessed (even after M 50's passage), including quite a few commercial properties. Is an underfunded, understaffed mass appraisal system ideal - absolutely not. Is there an iota of political will to spend more money to get it right - same answer.

Steve,

I bet I know at least part of the mystery with the Eastbank. A good number of non-profits are located in that building which makes it eligible for property tax exemption. So they only owe property tax on what they are collecting commercial rents on. However, that leads to the question on whether the City is getting the Tax Exempt rebates on the $1million a year in office space it is renting the story that came out earlier. Renting to the government is a good deal as they are a steady payer, and also you can then write off some of the common areas to the tax exemption.