Measure 2: property tax limit
By Stasia Scarborough
Of the Kmerald
This is the first of a six-part
fseries examining statewide
measures that will appear on
the Nov. 6 ballot.
Amid the threats and pro
mises surrounding Ballot
Measure 2, one thing is certain:
If Oregonians approve the proposed property tax
limitation measure, the current means of taxing
and allocating revenues in the state will change
radically.
Supporters of the measure say it will give
citizens more control over government spending
and taxation by constitutionally limiting the
amount local governments can tax.
But to do that, the measure has to deal with
the morass of complicated tax laws and tax
districts.
In a state that relies heavily on property tax
revenues — Oregon has the l()th highest property
tax rate in the nation — the measure does
decrease predicted property tax revenues. The
State Legislative Revenue Office issued a report
in August that predicted a $1.3 billion reduction
in the amount of revenues collected for the
1985-87 biennium, if the measure passes.
That report also predicted an. almost $9.5
million loss of revenue for the city of Eugene and
a $20.7 million loss for the Eugene 4-J School
District tor the 1984-85 tax year.
The revenue office, the Legislature’s staff of
economists, issued its report to local govern
ments in an effort to help them wade through the
conflicting predictions of the impact of the
measure. .
Since the measure addresses the limitation of
property taxes only — at 34 percent, the major
source of funding for. local governments — the.
measure will affect them the most. No property
taxes are used to fund state government or state
run institutions, such as the University.
Opponents of the measure claim that state
higher education will have to compete with local
governments seeking relief from the state's
general fund, hut the state will not'increase its
funding of local governments to match revenues
lost because of the property tax limitation, the
revenue office report says. Currently, local
districts receive approximately 27 percent of their
operating budget from the general fund:
Even though Measure 2 does not directly af
fect tax revenues at the state level, should the
measure pass, it will add money to the state's
general fund. Because they will be paying a lower
rate of property tax, taxpayers will have more
money subject to state and federal taxes. The
revenue office estimates Oregon will gain $40
million in income tax revenues, the federal
government an additional $219 million.
Some aspects of the measure are straightfor
ward. The measure calls for a 1.5 percent tax
limitation on assessed property value. That
means homeowners can be charged only $15 for
every $1000 of their home’s assessed value.
The measure stipulates that the assessed
value can be increased no more than 2 percent an
nually, or the home can be taxed at the 1983-84
assessed value, whichever is higher.
But the report points out that “the real world
(is a) maze of overlapping taxing districts.”
While a single change in tax rules might appear
simple at first, the effects of that change become
very complex.
Few people live in a single tax district, but
often in two or three — including a county,
school, city, and/or fire district taxing area. Each
of these governments can tax, but under Measure
2, the total tax of any property owner cannot ex
ceed the 1.5 percent limit. .
If the combined value of the tax rates is above
the 1.5 percent limit, Measure 2 says the local
districts must somehow lower their rates to meet
that limit.
The problem is how.
According to the 600-plus page report on the
potential impact of the measure prepared by the
attorney general’s office, the measure does not
stipulate how lawmakers should realign the tax
rates. Options range from a proportional decrease
in each district's tax rate to the elimination of
some district’s power to tax.
According to Oregon lawv the tax rate for .
each government must be the same for all its
ratepayers. Even if only a few of the residents of a
district are above the limit, the tax rate for the en
tire district must be adjusted.
According to the attorney general’s report,
the final decision on the plan to reduce the tax
rates will be left to the Legislature.
The Legislature will also be required to
devise a means of dividing the- tax revenues
among approximately 3,000 different taxing
districts. Currently, when homeowners pay their
. property tax, the money does not go directly to
the local taxing district but to the State, which
then allocates the money to the local district ac- .
cording to the amount of money levied.
Measure 2 retains that system for the first
. year after the measure’s approval. After that, the
Legislature must allocate the money, the attorney
general’s report says.
Also, twice.a year, districts may ask voters to
override the 1.5 percent limitation and vote for
any level of taxation they want. But the rules of
such an override require a majority of registered
voters approve the request.
Rick Bornemann, a spokesperson for the
Oregon Taxpayers Union, says the requirement
ensures that a majority of citizens are involved in
any changes in tax laws or rates.
Those opposed to the measure claim that the
override provision is a near-impossible obstacle
for local governments. It gives voter power to
those who don’t participate in an election,
because those who stay home are in essence
voting no, according to the Oregon Commission,
one of the largest groups opposing the measure.
Local opponents, including Tom Doig of the
Eugene Education Assocation, agree. Doig says
that undervoting, when voters skip certain issues
on the ballot, is also been a problem with voter
turnout.
Thousands expected for Ferraro visit
Geraldine Ferraro, the
Democratic candidate for vice
president, will speak on cam
pus today as planned on the
EMU’s east lawn. A rally begins
at noon and Ferraro’s speech
will follow at 12:20 p.m. If it
rains the event will be moved
into the EMU Ballroom.
Ferraro is stopping in Eugene
on a trip north from Medford to
Portland. University students
have been working throughout
the week making posters and
calling local residents to an
nounce her appearance.
Between 5,000 and 10,000
people are expected to attend
Ferraro’s presentation,
members of the Mondale
Ferraro campaign say. Included
in the crowd will be members of
both local and national media,
who have been following the
candidates since their nomina
tion at the Democratic conven
tion in mid-July.
Democratic presidential can
didate Walter Mondale is
scheduled to appear in Portland
Monday morning between 8:30
a.m. and 9:00 a.m. at the
Portland State University gym.
His speech will be open to the
general public, although space
will be limited. Mondale will
leave immediately following
the speech to Seattle.
Persons attending the Ferraro
rally today are warned to refrain
from any suspicious behavior,
such as “assassin” games.
Secret Service officials say that
any unusual activity will be
“seriously” dealt with.
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