After a hearing held a month ago, a work session is now scheduled on Representative Rob Nosse’s bill, HB 2972. It calls for a study on how property values influence and constrains tax assessments that are creating shortfalls. As with most studies, a solution is on the table for a two-rate taxation system that shifts taxation towards land and taxes structures separately. The buzz word for this session comes into play -- a more equitable taxation, economic justice, affordable housing and ecological sustainability that skirts around the constitution and Measure 5 and 50 -- property tax regulations passed in the 90s.

The theory is that vacant lots remain vacant because of their low property tax and if land were taxed separately, the land tax could be increased to encourage development. Whether taxed separately or together, when adding a structure, the tax will increase. Maybe not as much under the two-tax rate system because it’s already high, but they will both end at the same amount unless the intent is to increase property land taxes more than the reduction on structures, which appears to be the intent.

Modeled after the Lincoln Institute of Land Policy in China, land value increments created by regulatory changes, population growth and economic development should belong to the public. Since China’s higher levels of government provide minimal resources, land leasing fees became the main source of local and urbanization revenue. The principle as described for the proposed two-rate taxation system goes to what is in the public interest should be taxed less and what is not desirable should be taxed more.

It is understandable that government looks for stability and want to prevent a roller-coaster economy. Landowners also experience the same economic impact. Economic instability due to poor policy management can't be fixed by aggressive property taxation.

A D V E R T I S E M E N T

A D V E R T I S E M E N T

The actual reason for the introduction HB 2972 is found in the bill:

(2) “(c) An examination of comparative economic incentive effects on classes of land use in selected local urban and rural jurisdictions. (d) An examination of comparative economic incentive effects on property in selected jurisdictions currently utilizing rural enterprise zone tax incentives. (e) An evaluation of tax burden relief measures that might accompany land value taxation, including a homestead exemption and property tax deferral for homeowners who are financially overburdened."

One testimony creatively described it like this: “Ah, the usual stench of discriminatory inclusion of wealth spreading to societal "have-nots," has wafted once again, into the nostrils of those who have, justly and honorably accumulated wealth by; working hard, saving and investing money, providing services and or inventions to advance civilization, must now experience; forcible confiscation of their wealth, justly and honorably accumulated, to be shared with the huddled masses; for whatever reason, have yet to become prosperous on their own volition and or initiative.”

Since the passage of voter approved Measures 5 and 50, the Oregon property tax system has been massaged and manipulated by law makers until it has eroded local control and undermined the ability of cities to maintain a healthy mix of revenues. Will a progressive two-rate tax system benefit counties or the state?


--Donna Bleiler

Post Date: 2021-04-22 07:50:37

Last Update: 2021-04-22 07:51:41