INFORMATIONAL MEETING

 

TAPES 7 A-B, 8 A

 

SENATE REVENUE COMMITTEE

JANUARY 20, 2005  9:00 AM  STATE CAPITOL BUILDING

 

Members Present:                  Senator Ryan Deckert, Chair

                                                Senator Charles Starr, Vice Chair

                                                Senator Gary George

                                                Senator Rick Metsger

                                               

Members Excused:                 Senator Floyd Prozanski

 

Witness Present:                    John Phillips, Legislative Liaison, Oregon Department of Revenue 

 

Staff Present:                          Paul Warner, Legislative Revenue Officer

                                                Mary Ayala, Economist

                                                Barbara Guardino, Committee Assistant

 

 

TAPE 7, SIDE A

004

Vice Chair Charles Starr

Calls meeting to order at 9:00 a.m. Committee will continue with informational hearings.

 

INFORMATIONAL MEETING

019

Paul Warner

Gives overview of updated Withholding Payments chart (EXHIBIT 1).

 

045

Mary Ayala

Begins slide presentation on Oregon Property Taxes (EXHIBIT 2) slide 1. Part 1: Historical Overview of Property Tax Collections.

 

84

Ayala

Discusses Property Values and Tax Rates, slide 3, assessed value and market rate.

 

102

Ayala

Reviews Oregon Property Tax: Per Capita and as % of Income, slide 4. Property tax as % of income; property tax per capita. Discussion on effects of Measure 5 and Measure 50.

 

162

Ayala

Discusses Property Tax per Capita and % of Income State Ranking, slide 5. Compares Oregon’s tax burden with other states.

 

179

Ayala

Discusses County Ranking of Total Assessed Value, slide 6. Total of 46% of assessed value could be accounted for by three counties, Multnomah, Washington and Clackamas.

 

209

Ayala

Discusses FY03-04 Property Tax Rates, slide 7.

 

293

Ayala

Reviews Part 1: Summary – Historical Overview of Oregon’s Property Tax Collections, slides 8-9.

 

258

Ayala

Begins Part II of presentation, Oregon’s Current Property Tax Structure, slide 11.

 

273

Ayala

Discusses What Property is Taxed? Real property and personal property are taxed, slide 12.

 

282

Ayala

Explains pie chart concerning real market values, slide 13. More detailed table is available in Table A-4 in DOR report (EXHIBIT 3).

 

307

Ayala

Explains pie chart, slide 14, FY 03-04 Assessed Value. Compares with previous slide.

 

328

Ayala

Discusses Real Market Value and Assessed Value, by Property Type, slide 15.

 

350

Ayala

Continues discussion with The Property Tax Structure, slide16, and Major Components of Property Taxes, slide 17.

 

365

Ayala

Discusses Characteristics of Permanent Rates, slide 18.

 

380

Ayala

Discusses General Obligation Bonded Debt, slide 19.

 

389

Ayala

Discusses Three Other Components of the Property Tax Structure, slide 20.

 

398

Ayala

Discusses Characteristics of Local Option, slide 21.

 

417

Ayala

Discusses School Local Option, slide 22.

 

429

John Phillips

Continues discussion with An Overview of Measures 5 and 50, slide 23. Notes, measures have ongoing effects on taxing districts’ ability to raise additional revenue and the legislature’s ability to assist. Measure 50 creates certainty for taxpayers and provides relative stability of property tax.

 

450

Phillips

Discusses Measure 5 Limit, Key Elements, slide 24.

 

475

Phillips

Discusses Measure 5 Limit Key Elements, School limit, slide 25.

 

TAPE 8, SIDE A

040

Phillips

Continues presentation with discussion on Measures 5 and 50. Discusses Measure 50 Principles, slide 26.

 

065

Phillips

Discusses The Roll Back – Maximum Assessed Value (MAV), slide 27. Discusses ratio comparing real market value to maximum assessed value.

 

082

Phillips

Explains RMV/MAV ratio, Limited Growth in Taxable Value, slide 29.

 

093

Phillips

Continues explanation of Limited Growth in Taxable Value, slide 30.

 

122

Phillips

Continues Limited Growth in Taxable Value discussion, slide 31. References exceptions to the tax limits.

 

130

Phillips

Limited Growth discussion, slide 32, includes minor construction.

 

158

Phillips

Directs members’ attention to examples of exceptions including new construction. Explains ratio of assessed value to real market value. Slide 33.

 

165

Phillips

Discusses Consolidated Levy Authority, slide 34.

 

170

Phillips

Discusses Measure 50 Tax Calculation, slide 35.

 

185

Phillips

Reviews, Part II: Summary of the Current Property Tax Structure, slides 36, 37 and 38.

 

209

Ayala

Begins Part III: Local Taxes by Taxing District, slide 39.

 

215

Ayala

Discusses Who Levies Taxes on Property? Slide 40.

 

222

Ayala

Begins discussion on Who Levies Taxes on Property? Slide 40. Directs members’ attention to table D-2 in Oregon Property Tax Statistics, exhibit 3.

 

251

Ayala

Continues discussion on chart: 2003-04 Property Taxes Imposed by District and Structure, slide 41.

 

161

Ayala

Discusses Shares of Imposed Taxes, by Major Taxing District, slide 42.

 

269

Ayala

Summarizes Components of the Tax Statement, slide 43. Identifiers, property values and tax amounts for each district.

 

298

Ayala

Discusses Property Tax Bill, slide 44.

 

325

Ayala

Explains Example A: Compression – When It Is NOT Needed, slide 45.

 

341

Ayala

Explains Measure 5 – Tax Compression, slide 46. How compression value is applied to each tax statement.

 

361

Ayala

Explains Example B: Compression of Governmental Limit – How Compression is Applied to Each Account, slides 47 and 48.

 

419

Sen. George

Asks if this compression was a result of Measures 47 and 50.

 

421

Phillips

Responds, most taxing districts will levy a permanent rate. If they levy local option tax that could throw all districts into compression except that in Measure 50 the local option is prioritized.

 

TAPE 7, SIDE B

022

Ayala

Continues explanation of local options that are levied. Compression has taken its toll over the years. Refers to Example D: Compression, When Tax Rate Increases and a Local Option Levy Exceeds Measure 5 Limits, slide 50.

040

Ayala

Discusses M5 Compression Losses ($millions), chart, slide 51.

 

057

Ayala

Reviews section, Part III: Summary Local Revenues by Taxing District, slide 52.

 

058

Sen. George

 Asks for clarification on the effects of the use of a local option, compression, permanent rate.

 

053

Phillips

Responds, most districts will impose full permanent rate. In regard to local option, there are many factors involved.

 

085

Warner

Most of the discussion and questions coming to LRO is on the issue of schools district local options. It’s difficult for schools to calculate how much money they will bring in. Seventeen school districts have passed a local option in the last five years.

 

103

Chair Deckert

Requests inclusion of the local options in the School Finance Report next week.

 

123

All

Questions and discussion pertaining to compression and how educated school districts are on this matter.

 

163

Chair Deckert

Previews next week’s topics of discussion. Adjourns meeting at 10:10 a.m.

 

 

 

Tape Log Submitted by,

 

 

 

Barbara Guardino, Committee Assistant                               Reviewed by Kim Taylor James

 

 

Exhibit Summary:

1.      Withholding Payments, Ayala, 1 pp.

2.      Oregon Property Taxes, Ayala, 26 pp.

3.      Oregon Property Tax Statistics, Fiscal Year 2003-04, Ayala, 175 pp.