tax loophole
p r o p e r t y p h o t o s c o u r t e s y o f M u lt n o m a h C o u n t y
cont.
BIG HOUSE ON THE PRAIRIE : Dick and Mary Jaffe’s
farmhouse on Northwest Saltzman Road.
Last year, more than 2,700 property owners in Mult-
nomah County took advantage of those deferrals, pocket-
ing nearly $5 million in deferred property taxes.
Multnomah County tax assessor Randy Walruff says
he does not think the way property owners are benefiting
from tax deferrals on high-value properties in the metro
area meets the original legislative intent.
“We’re talking about a law that was created to help
Oregon’s forest industry,” Walruff says. “Now, the same
exemption is being used for estate sites. I just don’t see
how the public benefits from that.”
Walruff says forest and farm deferrals make even less
fair a property tax system that already disproportionately
rewards high-value property owners.
“They are taking breakfast out of low-income chil-
dren’s mouths,” Walruff says.
Property tax breaks reduce funding for schools and
the police and fire bureaus.
Yet it seems nobody in Salem wants to examine these
loopholes. Even the tax-friendly Democrats who control
the Legislature have shown no appetite for examining the
farm and forest tax breaks.
“In my four sessions on the House Agriculture Com-
mittee, I don’t recall there ever being a review of these
programs,” says state Rep. Brian Clem (D-Salem). “I think
they are serving their purpose.”
In fact, powerful lawmakers have pushed to make a
generous program even more lucrative. In 2011, state Rep.
Peter Buckley (D-Ashland), co-chairman of the budget-
writing Joint Ways and Means Committee, pushed
unsuccessfully to lower the already minuscule minimum
income requirement for a small farm tax deferral.
And House Speaker Tina Kotek (D-Northeast Port-
land) was the chief sponsor of a 2009 bill that provided a
multimillion-dollar property tax bailout to just one con-
stituent—a farmer who’d seen his tax deferral canceled
(see sidebar, page 14).
Currently, lawmakers led by state Sen. Betsy Johnson
(D-Scappoose) are seeking an expansion of such loop-
holes, pushing legislation that would generate retroactive
new tax deferrals for wildlife habitat.
“If we are not going to make sure that people with
locations of Properties mentioned in this story
friedrich
hodel
Blaize
fazio
angel
jaffee
NW
sk
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in
e
TAX BREAK: The Jaffes have separate farm deferrals for
a 20-acre wood lot and 11 acres of rangeland.
existing tax deferrals are actually doing something that
benefits the public,” Wiser says, “we shouldn’t be passing
new laws that help more people avoid paying taxes.”
A
nyone who has driven through the Cascades knows
what a forest looks like. But forests look different
to legislators, who allow property owners with
only 2 acres of trees to qualify for a tax deferral.
Originally, lawmakers created forest and farm defer-
rals to promote the timber industry and food production.
As a result, farmers and foresters pay greatly reduced
property taxes—in the range of 10 or 20 percent of what
they’d otherwise pay. That costs local tax authorities
across Oregon nearly $250 million a year, according to
state figures.
The tax deferrals may make sense for large farm and
timber operations. It’s less clear what they do for the
hobby farms and small forests that dot the metro area.
A good example is the home owned by Loran and Erena
Friedrich, who live on 4 acres in Northwest Portland. The
Friedrichs have a forest deferral for 3 of their 4 acres.
The Friedrichs are not timber people. Erena Friedrich
says she and her husband moved from Hillsboro to rural
Portland in 2005 seeking more green space. She says the
“They are taking breakfast
out of low-income
children’s mouths.”
—Randy Walruff, multnomah
county tax assessor
forest deferral on the Portland property they purchased
was not a big consideration.
“Our taxes would be higher,” she says. “It’s handy to
have the deferral.”
One indication that property owners are serious about
forestry is having a forest-management plan with a sched-
ule for harvest, removal of invasive species, etc.
Erena Friedrich says she and her husband have no
forest-management plan, nor have they given any thought
to harvesting trees.
“It’s just woods,” she says. “There is a game trail
through it. We’ve seen coyotes come through. One morn-
ing I woke up and the entire yard was covered with elk.”
cont. on page 16
Willamette Week MARCH 11, 2015 wweek.com
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