The bulk of city budgets in Oregon come from a percentage of the property taxes collected in the state. In the early 90s, state-wide measures were passed that limit the increase on assessed value of property to 3% every year, regardless of how much the market value of a property might increase. Further, the overall property tax rate cannot exceed $5 per $1000 of real market value for schools and $10 per $1000 of real market value for local governments. We’re already right up on both of those numbers, so a new levy would trigger what’s called “compression”, where any assessed tax over those two numbers is not collected and the lost revenue is spread evenly over all assessed levies.
That is to say, the City of Eugene could assess a new property tax levy to generate revenue, but for most properties, not only could they not collect it in full, but they would likely also trigger a loss of revenue for all other assessed levies on that property. That includes 4J, parks, the jail, the library, and potentially others depending on where you live.
This is a state-level problem that impacts all Oregon cities. It means that, roughly, city budgets can only grow by 3% each year. Even when inflation outpaces that number. And it is, in part, why Eugene faces an $11.5 million budget shortfall for the 2025-2027 budget.
Contact your state senator and representative and tell them we need a fix to Measures 5 and 50. Multiple bills this session—HB2321, HB2333, HB2334 and HB2335—seek to establish task forces to formally investigate the impact of these measures on local government funding, historically disadvantaged communities, higher education costs and various taxing districts in the state.
A Case Study
Read more about how this impacts two properties in particular and how it creates disparities between properties.
coming soon