1. Chris Fick League of Oregon Cities 1

2.  Revenues have declined nearly 4 percent over the last five years;  Rainy day funds have plummeted 16 percent;  42 percent of cities report being less able to address their financial needs this year; and  Nearly half of cities believe that their city will be even less able to meet financial needs next year. 2

3. Cut road maintenance38% Reduced staff and/or operations at city hall37% Reduced total operating spending30% Decreased planning and permitting services30% Reduced number of FTEs27% Cut infrastructure spending25% Increased employee contribution to healthcare24% Decreased overall service levels16% Reduced public safety spending14% 3

4.  Makes revenue reform a long-term priority of the League  Primary revenue constraints  Measures 5 and 50 4

5.  Capped property taxes for all general governments (cities, counties, special districts, local option levies) at $10 per $1,000 of RMV  Limits property taxes to 1% of RMV  $300,000 home = $3,000 limit on general government property taxes  Measure 5 limits mimic the real estate market 5

6.  Set a new assessed value (AV) level  At 10% less than 1995 RMV  Capped annual growth in AV at 3%  Set permanent rates for all taxing districts 6

7.  Compression  Loss of local control  Inequity  Permanent rate  Neighborhood to neighborhood  New Property - Changed Property Ratio  Increased service delivery by districts 7

8.  Compression under Measures 5 & 50 occurs when the value of property taxes on an individual property is greater than the $10 per $1,000 of RMV  More than half of Oregon cities are in compression  Revenue lost to compression is increasing 8

9. 9 20092012Difference RMV$200,000 $180,000 ($20,000) Measure 5 limits$2,000$1,800 ($200) Local Taxes Local option levies$50$0($50) Special District$500$462($39) City$650$600($50) County$800$738($62) Revenue lost to compression Revenues compressed

10.  Voters lack the ability to:  Make local decisions;  Prioritize; or  Engage in long-term planning (5 year limit on local option levies) 10

11.  Timber-dependent city in Linn County  Measure 50 permanent rate of $1.42 per $1,000 of AV  City has funded police and library services with local option levy since 1986  Voters approved levies with nearly 60 and 55 percent support respectively in 2010 11

12.  However, other taxing districts recently passed local option levies  Market values plummet $38 million, $34 million, and $18 million over last three years  Result: Revenue loss from compression has doubled, from $300,000 (13% of property tax revenues) in 2009-10 to $730,000 (31% of property tax revenues) in 2011-12  Seven taxing districts in 1997  Possibly eleven taxing districts by 2013 12

13.  Permanent Rates vary dramatically  $0.59 - Josephine County  $0.60 – Curry County  $4.34 – Multnomah County  $4.50 – Harney County  $8.53 – Wheeler County  $8.71 – Sherman County 13

14. 14 PhilomathPhoenix Population4,6104,550 Tax rate per $1,000 RMV$5.30$3.65 Police dept?Yes Fire dept?No Property Tax Revenues$1,301,749$923,205 Permanent Tax Rate (in $) per $1,000 of RMV Number of Cities Percentage of Cities None135.4% $0.01 to $1.00239.5% $1.01 to $3.007229.8% $3.01 to $5.007229.8% $5.01 to $7.004518.6% $7.01 to $9.00145.8% $9.01 to $12.0031.2% All Cities: A comparison:

15. Measure 50 locked in AV at 1996 levels 15 Block 1RMVAVTaxes 9910 SW 61st$ 307,980$ 195,790$ 4,147 9931 SW 61st$ 316,630$ 216,090$ 4,577 9930 SW 61st$ 326,880$ 198,530$ 4,205 9911 SW 61st$ 365,590$ 230,690$ 4,886 Block 2RMVAVTaxes 5134 NE 16th$ 312,720$ 66,690$ 1,416 5117 NE 16th$ 313,530$ 47,410$ 1,007 5126 NE 16th$ 330,910$ 47,270$ 1,004 5133 NE 16th$ 392,540$ 64,100$ 1,361 This block receives a Measure 50 discount of 79 to 85 percent off their tax rate applied to their RMV. This block receives a Measure 50 discount of 32 to 40 percent off their tax rate applied to their RMV. A Tale of Two Blocks Established Gentrifying

16.  Changed Property Ratio (CPR) determines the “assessed value” given to newly constructed or altered property  Assessors multiply the ratio of AV to RMV within a county to the RMV of a new or changed property  Result: Inequity across cities – slower growing cities have lower AV; faster growing cities have higher AV 16

17. 17 Example: New Property with RMV of $200,000 Local tax rate of $5 per $1,000 CPR calculated at county level Central Point City CPR: 81.1% AV: $162,200* Tax liability: $811* Jackson County County CPR: 70% AV: $140,000 Tax liability: $700 Ashland City CPR: 61.4% AV: $122,800* Tax liability: $614* -$111 + $86$0 * If CPR were determined locally. Loss due to county-wide CPR Gain due to county-wide CPR

18.  HJR 26 – Constitutional Amendment  Allow local option levies outside of compression  Restore maximum length of voter-approved local option levies to ten years  Reset at Sale  Allow cities to create City Service Districts  Set a “floor” on CPR  Lifting other state preemptions 18

19.  HJR 26  Build a coalition  Polling  Leverage governor’s support  Research/Media  State of Cities  EcoNW report  Toolkit  Regional meetings 19