Oregon’s tax system is a mess. Everyone knows it, and the debate usually revolves around the need for a sales tax.

But this year, the City Club of Portland tackled another dysfunctional part of the system: the property tax. A committee spent the year studying property taxes and concluded the current “Frankentax” — as our report calls it — has got to go.

The headline from the 15-member committee’s work: Repeal Measures 5 and 50 and return to a levy-based system that uses real market value, giving local voters more control over their budgets

The committee interviewed 34 witnesses, including tax assessors, state and local officials, lobbyists, proponents of tax limits, and policy experts.

A quarter-century of inflation in the cost of government services, migration of residents and businesses, and other changes have run into inflexible, constitutional limits on tax rates set in 1990, and on assessed values pegged to 1995.

We uncovered deep flaws, mostly unintended consequences of Measures 5 and 50.

The system is inequitable. Owners of properties with similar real market values pay differing property taxes, and the relative tax burden grows as income declines.

The system undermines local control. A tax approved by one jurisdiction can reduce revenues in overlapping jurisdictions, limiting the ability of those jurisdictions to sustain service levels their voters approved. The caps on total tax rates that protect property owners from changes in their tax burden induce a confusing, uncoordinated proliferation of tax jurisdictions that cannibalize each other and make accountability more difficult.

Property tax exemptions make the situation worse. Non-exempt properties bear a greater burden of paying for government services that all properties enjoy. Nearly 200,000 properties in Oregon with a combined real market value of $98.3 billion are exempt from paying some or all of their property taxes.

The committee believes that bold action is needed to deal with these problems. Incremental change would be just as difficult to achieve, would not significantly improve the situation, and could make matters worse.

We recommend that voters repeal the constitutional limits imposed by Measures 5 and 50, and that the Legislature design a statutory levy-based system to replace them. We suggest a phase-in of any new system to limit severe changes.

We recommend a return to real-market value to determine tax assessments. But to lessen the impact of rapid value changes, we recommend a five-year rolling average. The committee further recommends that lawmakers scrutinize the list of exemptions, with an eye to determining which ones are truly needed.

The sense of the committee is perhaps best captured by former Republican lawmaker and revenue committee chairman Lane Shetterly, who described the property tax as a “crisis in slow motion.”

The committee will hold a town hall to discuss the report on November 13. The club will vote on the report on November 15.

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James Mayer is a longtime Oregon resident who recently retired after a 33-year career as a newspaper reporter. Among many other topics, he covered the Oregon Legislature and the state’s tax system for a decade. He also wrote extensively about local government.

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