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Oregon's property tax system underwent a major transformation in 1997-98 as the voter-approved Measure 50 was implemented. Measure 50 cut total property taxes by $51 million from last year (1996-97) and made three fundamental changes to the structure of the property tax system: first, it replaced most tax levies with permanent tax rates; second, it rolled back the assessed value of every property in the state to 90 percent of its 1995-96 assessed value; and third, it limited the future growth in each property's assessed value to three percent per year.
These changes in the property tax system require changes to this publication. Historically, the purpose of this publication has been to provide a detailed description of the property tax system. This continues, and this year we also provide a comparison of the new system to the old one. In addition, because the new system is based primarily on tax rates rather than tax levies, the publication provides a step-by-step description of how the permanent tax rates were calculated.
A number of tables in the publication have changed as well. Tables reporting value generally report both real market value and assessed value because, under Measure 50, the two values differ. And because Measure 50 replaced roughly 80 percent of tax levies with tax rates, the emphasis of tables reporting taxes has changed from reporting levies to reporting the amount of tax the permanent tax rates will raise.
Measure 50 was passed in May of 1997 and took effect for the 1997-98 tax year, which started in July of 1997. The short timeline to implement the new system was a tremendous challenge for county assessment and taxation offices. As a result, some of the information requested for inclusion in this publication was not available from some counties. For example, some counties were able to provide total assessed value for the county but were unable to provide any breakdown for different property classes (residential, commercial, industrial, etc.). In an effort to provide as much useful information as possible, we have included tables with missing data but have made every effort to clearly identify the gaps. Totals are only provided where we have complete data. The "Guide to Using the Data" section provides further discussion of the major data problems.
This document is organized into six sections: Introduction, Summary, How Measure 50 Changed the Property Tax System, Calculating the Permanent Tax Rates, Guide to Using the Data, and Detailed Tables. To round out the Introduction, highlights of changes that occurred this year are provided below. The following section provides a summary of assessed values and taxes imposed in the first year of Measure 50. Next, the discussion turns to a brief description of the property tax system prior to Measure 50 and the changes made by Measure 50. The fourth section includes details of the permanent rate calculations. The Guide to Using the Data outlines caveats to understanding some of the detailed tables provided in the last section. These tables, which show assessed values, tax rates, and taxes imposed, are similar to those provided in previous years. However, because the information needed to describe the new system is different from prior years, the tables have been modified accordingly.
Appendix A provides tax rates for each taxing district in the state, and Appendix B contains of a glossary of terms. Further detailed information for each taxing district can be found within the 1997-98 edition of Oregon Property Tax Statistics Supplement. Additional information regarding property tax exemptions is located in the 1997-99 edition of Tax Expenditure Report.*
  • Property taxes imposed declined 2.0 percent from $2,527.9 million in 1996-97 to $2,476.5 million in 1997-98.
  • Real market value climbed 10.4 percent from $190.2 billion in 1996-97 to $210.0 billion in 1997-98, but assessed value, which under Measure 50 is the value subject to taxation, declined by 12.5 percent, falling from $190.2 billion to $166.4 billion. The strong growth in real market value marks the seventh consecutive year that average growth has exceeded 10 percent, although growth is showing signs of slowing.
  • Among taxing districts, special districts took the biggest percentage cut in taxes imposed between 1996-97 and 1997-98, falling 7.7 percent from $284.1 million to $262.4 million. Taxes imposed by schools declined 3.6 percent (from $1,135.0 million to $1,094.1 million) and taxes imposed by cities fell 3.5 percent (from $568.8 million to $549.1 million). Counties imposed taxes of $469.6 million in 1997-98, down 1.2 percent from $475.3 million in 1996-97.
  • Taxes imposed by districts are used to fund general operations and bonds. In 1997-98, operating taxes fell to $2,016.3 million, 6.0 percent below their 1996-97 level of $2,144.3 million. Conversely, bonds increased 12.5 percent from $318.9 million to $358.9 million.
  • The total taxes imposed include local option taxes, which are temporary operating levies not subject to the Measure 50 cuts. In 1997-98, voters approved $22.6 million in local option taxes.
  • Urban renewal taxes grew in excess of 50 percent for the second straight year. In 1997-98, they reached $101.3 million, up 56.4 percent from their 1996-97 level of $64.8 million.
*The 1999-2001 edition will be available by January 1999.