INFORMATIONAL MEETING

 

TAPES 8-9, A-B

 

HOUSE REVENUE COMMITTEE

JANUARY 18, 2005   1:30 PM   STATE CAPITOL BUILDING

 

Members Present:                        Rep. Tom Butler, Chair

                                                Rep. Vicki Berger, Vice-Chair

                                                Rep. Brian Boquist, Vice-Chair

                                                Rep. Sal Esquivel, Acting Chair

                                                Rep. Larry Galizio

                                                Rep. Mark Hass

                                                Rep. Betty Komp

                                                Rep. Andy Olson

                                                Rep. Chuck Riley

                       

Staff Present:                            Paul Warner, Legislative Revenue Officer

                                                Mary Ayala, Economist

                                                John Phillips, Dept. of Revenue

                                                Kristi Bowman, Committee Assistant

 

TAPE 8, SIDE A

003

Acting Chair Esquivel

Calls meeting to order at 1: 30 P.M. Introduces presenters: Mary Ayala and John Phillips.

 

ORIENTATION MEETING

 

018

Mary Ayala

Overview of presentation. (Exhibit 1) Part 1 will provide background about tax collections, and it provides discussion of measures that impact the property tax burden in OR over the past 30 years relative to other states. Part II will cover the property tax structure, focusing on the types of property that are taxed. Part III will describe the taxing structure on the sub-state level (taxing districts). An example of a tax return will be described to show how compression works given certain changes in taxing of different districts, as impacted by Measure 5 and Measure 50.

 

 

 

42

Ayala

Slide: Historical Overview of Property Tax Collections

 

 

 

49

Ayala

Slide: Property Values and Tax Rates

 

 

 

73

Ayala

OR Property Tax: Per Capita and As % of Income (chart)

 

 

 

160

Rep. Hass

Clarification question about the taxes paid by businesses—is that information in this presentation?

 

 

 

168

Ayala

Response: that data is not in this report but can be found in the Dept. of Revenue document, Oregon Property Tax Statistics, 2003-04 (Exhibit 2).

 

 

 

170

Ayala

Slide: Property Tax per Capita and % Income State Ranking. OR ranks 25th in FY 99-00.

 

 

 

191

Ayala

County Ranking of Total Assessed Value

 

 

 

205

Ayala

Property Tax Rates FY 03-04 (correction to exhibit)

 

 

 

245

Ayala

Slide: Part 1 Summary  (2 slides)

 

 

 

288

Ayala

Slide: Part II: OR’s Current Property Tax Structure Overview

 

 

 

315

Ayala

Slide: What Property is Taxed?

 

 

 

322

Ayala

Slide: Pie Chart of Real Market Value (change “residential” to “real” on exhibit)

 

 

 

359

Ayala

Slide: Pie Chart of Assessed Value

 

 

 

380

Ayala

Slide: Comparison of Real Market Value and Assessed Value, by Property Type

 

 

 

417

Butler

Questions: Is the ratio rate of 74.4% of assessed value to real market value a constant statewide?

 

 

 

420

Ayala

Response: No, the ratio percentage varies county by county.

 

465

Butler

Question: Is there property tax on livestock and inventory? (referring to slide titled: What Property is Taxed?)

 

485

Ayala

Response: There are no taxes on retail inventory but will research the other tangible personal property items listed.

 

 

 

TAPE 9 SIDE A

 

 

 

010

Chair Esquivel

Requests additional information on the tangible personal property items from LRO and the Dept. of Revenue to be provided to the committee.

 

 

 

020

Chair Esquivel

Clarification question about new addition to existing property and its assessed value.

 

 

 

025

Ayala

Response:  New addition would be assessed at the appropriate ratio for that county.

 

028

Rep. Riley

Provides clarification of value of new construction. Value is based on its location; the same building in another location could be assessed at a lower rate.

 

 

 

033

Ayala

Slide: Property Tax Structure

 

 

 

037

Ayala

Slide: Major Components of Property Taxes

 

 

 

042

Ayala

Slide: Characteristics of Permanent Rates

 

 

 

052

Ayala

Slide: General Obligation Bonded Debt

 

 

 

057

Ayala

Slide: Three Other Components of the Property Tax Structure

 

 

 

077

Ayala

Slide: Characteristics of Local Option

 

 

 

081

Ayala

Slide: School Local Option

 

 

 

093

Ayala

Slide: Building Blocks of the Property Tax System

 

 

 

118

Butler

Requests clarification regarding general obligation bonds and bonded debt. Clarifies life of general obligation bonds which could be longer than 10 years as opposed to local option taxes which are imposed for 5-10 years.

 

130

Phillips

Slide: An Overview of Measures 5 and 50

 

 

 

141

Phillips

Slide: Measure 5 Limit: Key Elements (2 slides)

 

 

 

177

Butler

Clarification question regarding taxation on real market value instead of assessed value.

 

 

 

190

Phillips

Response: Under Measure 5 the real market value (RVM) was used for taxation purposes; Measure 50 uses the assessed value for taxation.

 

 

 

211

Phillips

Slide: Measure 50 Principles

 

 

 

241

Phillips

Slide: The Roll Back (Maximum Assessed Value) (MAV)

 

 

 

260

Phillips

Slide: Limited Growth in Taxable Value  (3 slides)

 

286

Riley

Clarification question on MAV. If assessed value is $100,000, but my market value goes below that, the assessed value does not decrease to that new value.

 

 

 

288

Phillips

Response: the real market value can go down, but when RMV goes above where the assessed value has been frozen, it won’t shock the property owner “all the way up” just because of something the market decided to do. Uses Curry County as a recent example of fluctuating values. Clarifies the assessed value (AV) is the lesser of the maximum assessed value or the real market value of the property.

 

 

 

365

Phillips

Slide: Continuation of previous slide (3 of 3)

 

 

 

373

Phillips

Slide: Graphic examples of MAV calculation

 

 

 

397

Butler

Question: is there a different ratio for commercial, residential, industrial, vacant lots? How many ratios will a county have?

 

440

Phillips

Response: Each category has a different ratio for assessed value?

 

490

Rep. Berger

Clarification question about assessed value ratios as a constant figure.

 

 

 

494

Phillips

Response: The ratios change from year-to-year, but it is the same county-wide.

 

TAPE 8 SIDE B

006

Phillips

Slide: Consolidated Levy Authority

 

 

 

012

Phillips

Slide: Measure 50 Tax Calculation

 

035

Ayala

Slide: Part II Summary of Current Property Tax Structure (3 slides)

 

 

 

041

Ayala

Slide: Continuation of previous slides (Slide 3 of 3)

 

 

 

053

Ayala

Slide: Part III: Local Taxes by Taxing District

 

 

 

061

Ayala

Slide: Who Levies Taxes on Property?

 

 

 

070

Ayala

Slide: 2003-04 Property Taxes Imposed by District and Structure

 

 

 

084

Ayala

Slide: Shares of Imposed Taxes, by Major Taxing District

 

 

 

091

Ayala

Slide: Components of the Tax Statement

 

 

 

101

Ayala

Slide: Property Tax Bill. General obligation bonds are outside the M-5 limits.

 

 

 

140

Ayala

Slide: Compression: When it is NOT Needed

 

 

 

151

Ayala

Slide: Measure 5 – Tax Compression

 

 

 

160

Ayala

Slide: Examples of Measure 5 Tax Compression (2 slides)

 

 

 

185

Ayala

Slide: Example of Compression When Applied to Local Option Levies

 

 

 

200

Ayala

Slide: Example of Compression When Applied to Tax Rate Increases and a Local Option Levy Exceeds Measure 5 Limits

 

 

 

215

Ayala

Slide: Measure 5 Compression Losses (graph)

 

 

 

228

Rep. Boquist

Question: How many counties are compressed?

 

 

 

237

Phillips

Response: Dept. of Revenue will provide aggregate data on specific counties to the Representative. Information can also be found in the Legislative Revenue Office  (LRO) document “2005 Oregon Public Finance: Basic Facts.” (Research Report #1-05).

 

 

 

246

Phillips

Slide: Urban Renewal (3 slides)

 

 

 

350

Ayala

Continuation of Urban Renewal Slides

 

 

 

458

Ayala

Slide: Urban Renewal: Division of Tax Revenue by County (FY 98-99 to FY 03-04). (chart)

 

 

 

TAPE 9 SIDE B

50

 Berger

Gavel handed over from acting chair Esquivel.

 

 

 

63

Acting Chair Berger

Comments regarding property taxes. Suggests that committee members use the information presented on how the formula is derived for further discussions on taxation bills.

 

 

 

75

Berger

Adjourns meeting at 3:05 p.m.

 

 

 

 

Tape Log Submitted by:

Reviewed by:

 

 

 

Kristi Bowman, Committee Assistant

Kim Taylor James, Committee Coordinator

 

 

Exhibit Summary:

1. Slide Presentation: OR Property Taxes, LRO Staff, 37 pp., 01/18/05

2. Booklet: OR Property Tax Statistics, LRO Staff, 164 pp., 01/18/05