Umatilla and Morrow counties share a border, a community college system and several state and federal representatives. When it comes to taxes, the counties paint slightly different pictures.

Despite the location of several major businesses and continued growth at the Port of Morrow, Umatilla County’s tax base is significantly larger.

“Umatilla County has a much higher value than Morrow County,” said Morrow County assessor Mike Gorman.

He noted the larger geographical size and the higher population.

“There’s more homes, there’s more stuff to tax,” he said. “I think we’re about half, maybe a little more, of their value.”

But in terms of businesses contributing to the county tax base, Morrow County is outpacing Umatilla County. Morrow County’s top taxpayer, Vadata, Inc., pays $1.3 million more in taxes than Umatilla County’s top contributor, Hermiston Power LLC. Vadata, a subsidiary of Amazon, pays $4.72 million in taxes to Morrow County in 2018. It was also the second-highest taxpayer in Umatilla County, paying $3.1 million in taxes. Hermiston Power paid the most in Umatilla County, contributing $3.3 million in taxes in 2018.

Other major taxpayers in Morrow County are Portland General Electric, which paid $3.66 million in 2018, Avista Corporation, which paid $3.58 million, Threemile Canyon Farms, which paid $2.4 million, and Lamb Weston, which paid $1.96 million.

In Umatilla County, other top contributors in 2018 were Union Pacific, which paid $2.2 million, Pacificorp, which paid $2 million, and Hermiston Generating Company, which paid $1.4 million.

According to data provided by Gorman, Morrow County’s real market value has increased by about $3.7 billion in the past 10 years. That increase, he said, is mostly as a result of new industrial development and utility value. But the assessed value, or taxable value, has increased at a slower rate, by about $1.1 billion. That’s because many of those properties have received tax exemptions, either through Enterprise Zone agreements or Strategic Investment Program (SIP) agreements. Additionally, a business can stack its exemptions — it can receive one for constructing a new building, and a separate one, with a different timeline, for purchasing new equipment.

Gorman said while many of the largest business contributors receive major tax exemptions when they first locate in the area, some of those exemptions are now starting to expire.

“They don’t contribute very much, while exempt, in hard costs,” Gorman said. “In soft costs maybe, like donations to local charities.” He said many enterprise zone agreements include language in their contracts to encourage businesses to support local interests.

Even with the exemptions, he said, those businesses have a huge impact on the county. About 25 percent of the taxes levied go to administering services in the county like the sheriff’s office, the planning and health departments, human resources, part of the district attorney’s office, and others, Gorman said.

Umatilla County Assessor Paul Chalmers said the goal with offering exemptions is to entice businesses to locate in the area.

“Even if the benefit may be deferred, it’s always going to be beneficial,” he said. He noted that in SIP agreements, a certain portion is set aside to go on tax rolls each year during the exemption.

“So it’s not a stagnant number,” he said. “It gets indexed.”

Chalmers dismissed the idea that the deferral of taxes means those businesses aren’t contributing to the county.

“Some folks are concerned they’re not paying their fair share, but at some point they’re going to pay a significant share,” he said.

Taxes to homeowners

Though Umatilla County is larger by population and area, the two counties have a comparable average tax rate. Umatilla County’s average property tax rate is $14.15 per $1,000 assessed value. Morrow County’s average rate is slightly higher, at $14.83 per $1,000 assessed value.

But there’s a huge range in both counties by code area. A code area refers to the specific taxing districts serving each geographical area within the county. Umatilla County has 151 code areas, and Morrow County has 63. Tax rates are higher in code areas within incorporated cities, because those places have more services. Three code areas in Umatilla County tied for the highest tax rate, all within the city of Hermiston. Those areas pay $22.09 per $1,000 assessed value. Unique costs in those areas include city taxes, a city bond, and the Hermiston Urban Renewal District. The lowest rate in Umatilla County is an unincorporated area near Ukiah, which pays $9.84 per $1,000 assessed value.

In Morrow County, the highest rate is $25.06 per $1,000 assessed value, within the city of Heppner. There, city taxes alone are $10.62 per $1,000 assessed value.

Because of Measure 5, passed in 1990, property taxes in Oregon have assigned rates and can’t go above a certain amount without being subject to compression. For school taxes, it’s $5 per $1,000, and for city taxes it’s $10 per $1,000 assessed value.

Gorman said that despite that, Heppner lobbied to have a higher tax rate, but they lose about as much in compression as the city of Boardman, which has a rate of $19.71 per $1,000 assessed value.

“They lose almost the exact same in compression, but the city of Boardman collects a lot more in dollars,” he said. That’s because Boardman has more commercial property, and more people living there.

Chalmers said because of compression, without new businesses coming in, and without incentives like the enterprise zones to bring them there, schools and cities would not see additional revenue streams.

“They would have to lay people off,” he said. “The property tax system in Oregon is not fair or equitable.”

Gorman said it can be misleading to look at county taxes by their average rate, as both have cities with a huge range of services and populations. But, he said, overall they are similar communities.

“Umatilla County has some larger cities, but it’s still a rural frame of mind,” he said, citing the offerings of each county, like libraries and fire protection services. “They kind of want the same thing.”

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