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Local budget law
Most local governments in Oregon, from the smallest cemetery district to the largest city, must prepare and adopt an annual or biennial budget. Schools, counties, cities, rural fire protection districts, and most special districts are all subject to the same budgeting provisions. Only those districts specifically exempted in law do not have to prepare and adopt a budget. Local budget law is found in the Oregon Revised Statute, Chapter 294. The law sets out several specific procedures that must be followed during the budget process. The budget must be completed by June 30the day before the start of the fiscal year or biennial budget period to which it relates.
 
What are the purposes of local budget law?
 
The Legislature clearly identified the purposes of local budget law in the statute. It is designed to:
  • Establish standard procedures for preparing, presenting, and administering the budgets of Oregon´s local governments,
  • Encourage citizen involvement in the preparation of the budget before its final adoption,
  • Provide a method of estimating revenues, expenditures, and proposed taxes, and
  • Institute a method for control of revenues and expenditures for the promotion of efficiency and economy in the expenditure of public funds. 
Many of the requirements in the law, such as public meetings, publication notices, non-governing body representation on the budget committee, and the availability of the budget document throughout the development process are designed to encourage citizen involvement. An overriding theme in the law is that public policy decisions are to be made openly in a public meeting. Citizens have the right to be there and to know what their local government intends to do, before it happens.
 
The law requires that all local governments use uniform formats prescribed by the Department of Revenue in the preparation of their budget. This requirement lends a semblance of consistency and predictability between both large and small local governments´ budget documents. From year to year, comparisons can more easily be made when formats are consistent. This will help in analyzing your local government´s fiscal plan.
 
Do all local governments have to comply with this law?
 
Schools, counties, cities, rural fire protection districts, urban renewal agencies, and most special districts are all subject to the same budgeting provisions. Some special districts are not. If you have a question about whether or not a local government is subject to this law, you can contact your county assessor or the Department of Revenue at 503-945-8293.
 
What can citizens expect from the process?
 
You can expect to be notified of all budget meetings. These generally occur between January and June, and notice is often provided in the newspaper. Check with your local district to learn their method of publication or the meeting schedule.
 
You can expect to be able to ask questions and/or make comments at the budget committee meeting specifically designated for public input.
 
You can expect to have the opportunity to submit written and/or verbal testimony at the budget hearing.
 
You can expect to have the opportunity to review the budget document. You can obtain one for yourself if you so desire. Local government can legally charge for copies but the cost cannot exceed the actual cost of the photocopying.
 
You can expect to be able to vote on any temporary property tax measures advanced by the local government.
 
You can expect to be able to challenge the tax levy of the district in tax court if you think it violates the law.
 
What procedural steps must a local government take to comply with the law?
 
Local budget law requires many procedural steps in the development and final adoption of the annual budget.
 
The following are the primary steps each local government must consider:
  • The budget officer prepares a proposed budget.
  • Notice of the budget committee meeting is published.
  • The budget document is made available at or before the budget committee meeting at which the budget is presented.
  • The budget committee conducts at least one public meeting for receiving the budget message and the budget document as well as providing opportunity for public questions or comments.
  • The budget committee approves the budget.
  • Notice of the public hearing and a summary of the approved budget is published.
  • The governing body conducts a public hearing on the approved budget.
  • The governing body, after public comment and deliberations, adopts the budget and enacts resolutions or ordinances accordingly by June 30.
  • The governing body certifies the district´s tax, if any, to the county assessor by July 15.
Note: In Multnomah County, some of the publication and hearing requirements are performed for the local government by the Tax Supervising and Conservation Commission.
 
How is compliance with local budget law monitored?
 
The citizens of a district have the opportunity and the responsibility to be involved in the process. It is more efficient to the overall system when citizens become involved in the development of the budget itself, rather than mounting a legal challenge to the result.
 
The Department of Revenue has administrative oversight responsibility for local budget law. The department prescribes forms, writes administrative rules to clarify the legal requirements, produces a manual for use by local governments, and provides training on the correct procedures. The law also specifically prohibits the Department of Revenue from interfering with the fiscal policy of a local government.
 
How can a citizen participate in the budget process of a local government?
 
As mentioned, the Legislature designed the procedures of local budget law to encourage citizen participation. Citizens can participate in a variety of ways. Here are a few possibilities:
  • Volunteer to become a budget committee member.
  • Attend the budget committee and governing body budget meetings and the public hearing.
  • Obtain a copy of the budget when it becomes available or simply review it at the office of the district.
  • Vote on ballot measures for additional funding requested by the local government.
  • Provide written or oral testimony to the budget committee or the governing body on the policy outlined in the budget, and,
  • Respectfully challenge irregularities observed in the budget process.
Can a citizen challenge the process and if so, how is that done?
 
Yes, ORS 294.485 outlines a process that allows 10 "interested taxpayers" to appeal to the Oregon Tax Court any ad valorem property tax made contrary to law. The challenge must be made within 30 days of the district´s certification to the county assessor. If the court finds that the budget and the tax certification in question do not substantially comply with local budget law, the tax levy can be declared void or be modified.
 
For specific questions about local budget law, e-mail us at: Finance.Taxation@state.or.us.