Our County

To understand the current structure of Oregon’s property tax system, it is helpful to view

the system in a historical context. Although governments in Oregon began taxing property

before statehood, the structure of the tax changed very little until the 1990s, when two

statewide ballot measures dramatically altered the system.

Measure 5, which introduced tax rate limits, was passed in 1990 and became effective

starting in the 1991–92 tax year. When fully implemented in 1995–96, Measure 5 cut tax

rates an average of 51 percent from their 1990–91 levels. Measure 50, passed in 1997, cut

taxes, introduced assessed value growth limits, and replaced most tax levies with permanent

tax rates. It transformed the system from one primarily based on levies to one primarily

based on rates. When implemented in 1997–98, Measure 50 cut effective tax rates

an average of 11 percent from their 1996–97 levels.

This appendix consists of four sections designed to provide a history of Oregon’s property

consists of a broad look at how the two ballot measures have affected the property tax

have existed during the past twenty years.

One useful way to understand the recent history of the property tax system is to divide the

discussion into three distinct periods: Pre-Measure 5, Measure 5, and Measure 50.

Oregon had a pure levy-based property tax system until 1991–92. Each taxing district calculated

its own tax levy based on its budget needs. County assessors estimated the real

market values of all property in the state. Generally speaking, the full market value of

property was taxable; there was no separate definition of assessed value. The levy for each

taxing district was then divided by the total real market value in the district to arrive at a

district tax rate. The taxes imposed by each district equaled its tax rate multiplied by its

real market value. Consequently there was no difference between taxes imposed and tax

levies under this system. Most levies were constitutionally limited to an annual growth

rate of 6 percent, and levies that would increase by more than 6 percent required voterapproval.

Under this system, the tax rate for an individual property depended on the combination of

taxing districts from which it received services. Taxes for each property were calculated by

first summing the tax rates for the relevant taxing districts to arrive at a consolidated tax

rate. That tax rate was multiplied by the assessed value of the property to determine the

tax imposed on that property. The annual growth in taxes on an individual property depended

on a number of factors, including new or larger levies and the amount of new con

struction within the district. For example, if new construction did not occur, and property

values did not change, then any growth in levies meant taxes increased for individual

properties. On the other hand, new construction within the district meant that the levies

were distributed across greater value. The tax rate would fall when the value of the district

increased. This growth could result in lower taxes for some individual properties.

Measure 5 introduced limits, starting in 1991–92, on the taxes paid by individual properties.

The limits of $5 per $1,000 real market value for school taxes and $10 per $1,000

If either the school or general government taxes exceeded its limit, then each corresponding

taxing district had its tax rate reduced proportionately until the tax limit was reached.

This reduction in taxes to the limits is called “compression.”

Measure 5 resulted in a system that was a hybrid of levy-based and rate-based systems.

For properties where the school and general government taxes were below the limits, the

process resembled a levy-based system; taxes imposed depended on levies. For properties

where the calculated taxes exceeded the limits, and hence the tax rates were fixed at the

limits, the process more closely resembled a rate-based system; taxes imposed depended

on assessed values.

The 1997 Legislature drafted Measure 50 in response to the passage of citizens’ initiative

Measure 47 in November 1996. Measure 47 would have rolled back property taxes (not assessed

values) to 90 percent of the 1995–96 level for each property in the state. Measure

47 was repealed by Measure 50. This legislatively-referred measure was drafted to correct

a number of technical problems with Measure 47 while replicating its tax cuts.

The objective of Measure 50 was to reduce property taxes in 1997–98 and to control their

future growth. It achieved these goals by cutting the 1997–98 district tax levies and by

making three changes: switching to permanent rates, reducing assessed values, and limiting

annual growth of assessed value.

While Measure 5 simply limited the tax rates used to calculate taxes imposed, Measure 50

changed the concepts of both assessed values and tax rates. Assessed value is no longer

equal to real market value. For 1997–98, the assessed value of every property was reduced

throughout the state, this change had varying impacts. Properties that had experienced

the greatest value growth between 1995–96 and 1997–98 received the greatest cuts

in assessed value, and consequently in taxes. For new property that did not exist in 1995–

96, such as business personal property or improvements, the assessed value was calculated

as a percentage of its market value.

For existing property, Measure 50 limited the annual growth in assessed value to 3 percent.

This limitation made predicting future assessed values much simpler. For new property

(e.g., newly constructed homes), assessed value is calculated by multiplying the new

property’s real market value by the ratio of assessed value to real market value of similar

property. This approach to assigning values to a new property assures that it is taxed con

until it reached a rate of $5 per $1,000 assessed value in 1995–96.

sistently with similar existing properties. Measure 50 also stipulates that assessed value

may not exceed real market value. As a result, if the real market value of a property falls

below its assessed value, the taxable value will be set at the real market value.

Prior to Measure 50, levies were set by local governments and voters, and tax rates were

the result of dividing levies by assessed value. Under Measure 50 most levies were replaced

by permanent tax rates, making the permanent rates central to the property tax

system. There are three types of property taxes that taxing districts may impose: taxes

are fixed; they do not change from year to year. Bond levies typically are approved in terms

of dollars, and the rates are calculated as the total levy divided by the assessed value in

the district. Local option levies may be approved either in rate or dollar terms. If the local

option levy is in dollar terms, then rates are calculated the same way as for bond levy

rates.

Taxes from the permanent rates, typically referred to as operating taxes, are used to fund

the general operating budgets of the taxing districts. They account for the single largest

component of property taxes. Strictly speaking, the permanent rates are rate limits, so

districts may use any rate up to their permanent rate.

Local option taxes represent the only way taxing districts can raise operating revenue beyond

the permanent rate amount. Even so, these taxes are the first to be reduced if the

Measure 5 limitations are exceeded. Because voters at the local level must approve these

levies, they represent one aspect of local control over the level of property taxes. All districts

except educational service districts (ESDs) are authorized to levy local option taxes;

2000–01 was the first year that school districts were able to use them. Measure 50 requires

that local option levies in elections other than general elections be approved by a

majority of voters with at least 50 percent of all registered voters actually voting.

Bond levies have remained largely unchanged. They are used to pay principal and interest

for bonded debt. Under the provisions of Measure 50, new bond levies, like new local option

levies, are subject to a 50 percent voter participation requirement if the election is not

a general election.

Some taxing districts receive timber tax revenue. This revenue, known as an offset, actually

reduces the amount of revenue that districts may raise from their permanent rates.

Only county government districts reduce their permanent tax rates when they receive offset

payments. When schools receive timber tax payments, it is in addition to what they

raise through property taxes.

Under Measures 5 and 50, the state was required to compensate schools for losses in tax

revenue due to changes in each ballot measure. In both cases, the effects of the requirements

were negligible since the Legislature appropriated more than the required amount

each biennium. Under Measure 5, losses from tax compression were required to be replaced

through 1996, but the state was not required to continue the level of Basic School

Support that it had provided to school districts prior to Measure 5. The replacement revenue

requirement ended up being partially offset by reductions in other Basic School Support

funds that were no longer mandated. Measure 50 also contained a constitutional

requirement that the Legislature replace school district revenue lost due to the Measure 5

funded with the operating taxes of districts. The pension levy represents an ongoing obligation the City of

Portland has to its fire and police forces. Both of these eventually will become part of the permanent rate for

their respective districts.

rate limits. This requirement likewise has had a minimal effect on actual state school

funding because the school revenue compression losses under Measure 50’s lower tax environment

have been smaller than the amount of Basic School Support provided by the

Legislature.

The changes to the property tax system brought about by Measures 5 and 50 required

significant changes in the way county governments and the state administer the tax. This

section describes how property tax administration was changed by Measures 5 and 50.

The process of identifying and assigning a value to taxable property is called assessment.

Most property assessment is administered by the county assessor. The Oregon Department

of Revenue assesses some property, including public utilities and large industrial

properties. Utility property is placed on a separate assessment roll, then transferred to the

county assessment roll prior to preparation of tax bills. The Department of Revenue appraises

large industrial plants, but those properties appear only on the county assessment

roll.

Property subject to taxation includes all privately owned real property (land, buildings,

and improvements) and business personal property (machinery, office furniture, and

equipment). There is no property tax on household furnishings (exempted in 1913), personal

belongings, or automobiles (exempted in 1920). These as well as other property tax

Budget.

Prior to the passage of Measure 5 in 1990, each county assessor annually prepared an assessment

roll listing all taxable property as of January 1. For example, the assessed value

of a property for the 1989–90 fiscal year was determined as of January 1, 1989. Through

1980, assessed value was set to market value for all classes of property. From 1980 to

1983, taxable property was divided into two categories: homestead and all other. Homestead

property consisted of owner-occupied single-family residences. Property was appraised

at market value but assessments were limited to 5 percent growth statewide per

year for each category. Beginning in 1984–85, the distinctions of homestead and all other

property were eliminated, and in 1985 the Legislature repealed the 5 percent limit on assessed

value increases. Beginning with the 1985–86 tax year, all property again was assessed

at 100 percent of full market value.

The legislation to implement Measure 5 made two primary changes in the assessment process.

First, it changed the assessment date from January 1 to July 1, effective beginning

with the 1991–92 fiscal year. Second, the new legislation set assessed value equal to “real

would sell for during the year.

With Measure 50, property assessment changed dramatically. For 1997–98, the assessed

value of a property was set at 90 percent of the property’s 1995–96 assessed value. From

1998–99 onward, assessed value growth is limited to 3 percent per year. For new properties,

assessed value is calculated by multiplying the ratio of assessed to real market value for

similar property in the county by that property’s real market value. For example, if the ratio

of assessed to real market value for residential property in a given county is 0.8, then the

assessed value for a new house would be 80 percent of its real market value. Measure 50

also redefined real market value as the value the property would sell for in the market on

the assessment date (January 1), thus abandoning the concept of minimum value during

the year that was adopted under Measure 5.

The process of maintaining uniformity of values among property owners and among various

classes of property is called equalization. Prior to Measure 5 taking effect, county

boards of equalization heard taxpayer appeals and could adjust assessed values up or

down to maintain uniformity. Boards of equalization also could adjust values for entire

classes of property at the request of the county assessor, again to maintain uniformity in

assessments. Measure 5 substantially reduced the authority of the county boards of

equalization, and when Measure 50 took effect, the equalization process became unnecessary.

Measure 5 removed the power of the county boards of equalization to equalize values.

Their sole responsibility was changed to hearing petitions for reduction of value from individual

taxpayers. At the county level, it was up to assessors to maintain uniformity in values

by assessing each property at its real market value. At the state level, the director of

the Department of Revenue used information on sale prices and assessed values to adjust

county assessment rolls, if needed, to maintain uniformity among property owners and

property classes.

Under Measure 50, the mandated calculation of assessed value from a base year value

with the 3 percent annual growth limit meant that equalization became unnecessary.

Appeals to reduce real market value and assessed value and to request a waiver of late

filing penalties are heard by the county Boards of Property Tax Appeals (BOPTA) after tax

statements are issued.

Prior to Measure 5, property was assessed as of January 1 of each year. Property owners

received their assessment notices in the spring, and appeals were settled prior to computing

tax rates and mailing tax bills in October.

Two features of Measure 5 required changing the appeal process. First, the assessment

date was changed from January 1 to July 1. This meant that as a practical matter there

was not enough time to complete the appeal process prior to mailing tax bills. The Legislature

remedied this problem by combining the assessment notice and the tax bill and by

October 25 to December 31 with the County Board of Equalization (BOE). Taxpayers

received tax refunds if their appeals were successful.

The second Measure 5 change to the appeal process was the definition of assessed value.

property would sell for during the year. This meant that for some properties, the assessed

value was not the value on the assessment date (July 1), but on some later date. To allow

for adjustments to the assessed value of properties whose value declined after the assessment

date, the Legislature provided for a second appeals period. Between July 15 and July

31 following the end of the tax year, property owners who thought the market value of

their property declined during the tax year could appeal to the County Board of Ratio Review

(BORR). If successful, taxpayers received refunds.

Measure 50 eliminated the BOE and BORR and replaced them with county Boards of

Property Tax Appeals (BOPTA). The limitation placed on increases in assessed value has

resulted in a large decline in the number of appeals filed at this level. With the assessment

date reset to January 1, the second appeals period no longer exists and appeals must be

filed between the date when tax statements are issued and December 31.

Just as the assessment process changed under Measure 5 and Measure 50, so did the

calculation of taxes. Measure 5 imposed tax rate limits, and Measure 50 established permanent

tax rates to replace most tax levies that existed under the pre-Measure 5 and

Measure 5 systems. This section describes how taxes and tax rates were calculated under

the three different systems.

Prior to the passage of Measure 50 in 1997, tax levies played a key role in determining the

amount of property taxes raised by local governments. Measure 50 required that most of

the tax levies that existed previously be assigned permanent tax rates. Below we discuss

the old levy system and describe how it changed under Measure 50.

Under both the pre-Measure 5 and the Measure 5 systems, tax levies played a key role in

determining the amount of property tax revenue local governments received and the

amount of tax imposed on each property. The process of calculating and declaring the

amount of taxes to be raised from taxpayers was termed “making the levy.” Authority to

levy property taxes was vested with the governing body of each local government. Each

governing body determined the levy for its taxing district annually before July 15 as part of

the budget process. Annual budgets for taxing districts are based on a fiscal year that begins

July 1 and ends the following June 30.

Constitutional and statutory limits on the amount that a taxing district may levy were:

approved by a majority of its voters at a state general or primary election, represented a

permanent authority to levy a specific dollar amount each year. That dollar amount

could not exceed the highest amount levied in the three prior years in which a levy was

amounts for annexed territory. A taxing district was permitted to have only one tax

base levy. Proceeds from the tax base levy could be expended for any purpose allowed

by law for the district except general obligation bonds. Tax base levies were subject to

the Measure 5 tax rate limits.

for one year or for two or more years (serial levies). Safety net levies were available only

to school districts and qualifying ESDs and did not require voter approval. The safety

net levy was the amount needed to bring the current year’s total tax base and other

levies for operating purposes up to the amount of the prior year’s total levy for operating

were permanent and were limited in amount by the product of the voted tax rate and

the assessed value of the taxing district (as opposed to a limit on the levy amount).

Starting in 1978, serial levies also could be established using a specified voter approved

tax rate, but the term could not exceed three years. These were sometimes referred

to as “rate levies.” The 1989 Legislature (Oregon Laws Chapter 658) increased

the limit on fixed-dollar serial levies from three to five years for operating purposes and

levies approved for greater than three years (ORS 328.715).

10 years for any other purposes. All one-year, serial, safety net, and continuing levies

were subject to the Measure 5 tax rate limits.

an amount sufficient to pay principal and interest for bonded debt each year. Bond

measures to be paid from future tax levies first had to be approved by a majority of

those voting, unless otherwise provided by law. Proceeds from a bond levy could not be

diverted to another purpose. Bond levies used for capital construction were not subject

to the Measure 5 tax rate limits.

Measure 50 converted most of the levies imposed under the pre-Measure 5 and Measure 5

systems to a permanent tax rate. Tax base levies, one-year levies, serial levies, safety net

levies, and continuing levies all became part of the permanent rate created by Measure 50.

In addition, Measure 50 created a new type of levy known as a local option levy. Local option

levies are operating levies that can be passed by local governments to raise revenue beyond

the permanent rate amounts. The original Measure 50 language did not allow school districts

or ESDs to use local option levies. However, legislation passed in 1999 enabled school

districts to use local option levies starting in 2000–01. Levies for bonded indebtedness remain

in essentially the same form as prior to Measure 50. Taxes from permanent rates and

from local option levies are subject to the Measure 5 rate limits, but taxes from bond levies

remain exempt from limits.

Measure 50 replaced most tax levies with permanent tax rates. Therefore, the exercise of

setting tax rates remains only for local option levies, bond levies, and urban renewal special

levies. Under Measure 50, the county assessor computes tax rates for local option

levies, bond levies, and urban renewal special levies, then adds those rates to the permanent

rates to compute the total rate to be extended to a property. The tax extended to a

property is the total tax rate times the assessed value of the property.

Under the pre-Measure 5 and Measure 5 systems, the county assessor extended authorized

levies and computed district tax rates for each taxing district. District tax rates were

expressed as a dollar amount per $1,000 of assessed value and were computed by dividing

total taxes levied by the total assessed value inside the taxing district boundaries. The total

tax extended to a property was the sum of the district tax rates times the assessed

value of the property. Under Measure 5, if the tax extended to the property exceeded the

Measure 5 limits, the tax going to each local government was reduced proportionally until

the limit was reached.

When Measure 50 first took effect in the 1997–98 tax year, permanent tax rates were calculated

based on a complicated formula that took into account several factors. These included:

a) the amount of taxes that would have been raised in 1997–98 under Measure 47,

b) the levies that existed under the Measure 5 system, c) the tax cut required by Measure

50, and d) a variety of special provisions that exempted certain types of levies from the

Measure 50 cuts and reduced the amount of the tax cuts for districts with rapid assessed

value growth due to new construction.

Compression is the process used to reduce property taxes to the Measure 5 limits. Prior to

Measure 5, compression did not exist. Reductions in taxes due to compression are the

difference between what taxing districts wish to raise through property taxes (tax extended)

and the amount they actually raise (tax imposed).

Measure 5 introduced limits, phased in between 1991–92 and 1995–96, on the taxes paid

by individual properties. The limits are $5 per $1,000 real market value for school taxes

and $10 per $1,000 real market value for general government taxes. These limits are applied

only to operating taxes, not bonds. For each property, the assessor compares education

taxes with the education limit and other governmental taxes with the general

government limit. If property taxes exceed the Measure 5 limits, then taxes are compressed

in a specific order. First, local option taxes are reduced, possibly to zero. If there

are no local option taxes or they have been reduced to zero, the tax rates from the permanent

It is important to note that while property tax rates under Measure 50 are applied to a

Measure 50, this distinction was unnecessary because assessed value equaled real market

value. While the Measure 5 limits still apply under Measure 50, the effect of the Measure 5

limits is minimal for most properties because Measure 50 substantially reduced property

taxes.

Once the tax rates and Measure 5 tax rate limits are applied to each property, the assessor

certifies the assessment roll and turns it over to the tax collector. The tax collector bills

and collects all taxes and makes periodic remittances of collections to taxing districts. Tax

statements mailed to property owners list the assessed value of property and the taxes

extended by each taxing district. They also indicate how much is inside and how much is

outside the Measure 5 property tax limits and the amount of taxes actually due after the

limits have been applied.

Taxes are levied and become a lien on property on July 1. Tax payments are due November

15 of the same calendar year. Under the partial payment schedule, the first one-third of

taxes are due November 15, the second one-third on February 15, and the remaining onethird

on May 15. A discount of 3 percent is allowed if full payment is made by November

15; a 2 percent discount is allowed for a two-thirds payment made by November 15. For

late payments, interest accrues at a rate of 1.33 percent per month. If taxes remain unpaid

after three years from the tax-due date, counties initiate property foreclosure proceedings.

In Oregon, urban renewal agencies receive the bulk of their revenues through a tax increment

financing mechanism. When an urban renewal plan is created, the value of the

property within its boundaries is locked in time, or frozen. The agency then raises revenue

in subsequent years from any value growth above the frozen amount; this value growth is

referred to as the increment. The tax rate used to calculate taxes imposed for the urban

renewal plan is the consolidated tax rate for the taxing districts within the geographic

boundaries of the plan. These urban renewal taxes, referred to as “tax off the increment,”

are calculated as the consolidated tax rate times the value of the increment.

Prior to Measure 5, urban renewal agencies received taxes that would have been imposed

by each taxing district on the excess value of property within each urban renewal plan

area (an agency can have more than one plan area). Technically, only the properties within

the urban renewal plan area paid taxes to the urban renewal agency. However, in effect all

taxpayers in taxing districts overlapping the plan area paid urban renewal taxes because

the removal of urban renewal excess value from the tax rate calculation caused tax rates

to be slightly higher for everyone in the taxing district.

The legislation passed to implement Measure 5 made a number of changes to tax increment

financing in urban renewal areas to avoid potential inequities among taxpayers. If

the Measure 5 tax limits had been imposed under the old urban renewal system where

only properties inside the plan areas paid urban renewal taxes, those properties could

have paid taxes that were dramatically different from surrounding properties’ taxes. If an

agency used its revenue to finance bonds outside the limits, the properties in the plan

area could pay far higher taxes than similar properties outside the plan area. Likewise, if

the agency used the revenue for non-bond purposes, then properties inside the plan area

would have relatively more of their taxes subject to the Measure 5 rate limits and could

pay far lower taxes than similar properties outside the plan area.

The Legislature attempted to remedy this problem by spreading urban renewal taxes over

all properties inside the urban renewal agency’s boundary for taxing districts overlapping

urban renewal plan areas. Urban renewal taxes appeared separately on tax statements,

just like those of each taxing district.

In 1992, tax increment financing in urban renewal areas was changed again. The Oregon

Supreme Court ruled that all revenue collected by an urban renewal agency to pay for

bonds is inside Measure 5 rate limits and hence subject to the general government limit.

This has had a substantial effect on urban renewal agencies, because a large percentage of

their revenues are used to pay for bonds.

Measure 50 returned the structure of urban renewal financing to much the same form it

had prior to Measure 5, with one exception. Urban renewal agencies do not have permanent

rates and continue to raise revenue primarily through tax increment financing. But

under certain circumstances, urban renewal agencies are allowed to raise additional revenue,

beyond what they raise off their increment, via special levies. Starting in 1997–98, if

an existing urban renewal plan received less revenue off its increment under Measure 50

than what it would have received under the pre-Measure 50 tax system, the agency can

impose a special levy to make up for the difference. The special levy is imposed on all

receive tax increment financing revenue only; the agency may not impose a special levy for

new plan areas.

During the past 20 years the Legislature has created six property tax relief programs. Currently,

only two of these programs exist: the Elderly Rental Assistance (ERA) and Homestead

Deferral programs. The Homestead Deferral programs include three components:

property tax deferral programs for seniors (62 years and older) and disabled homeowners,

and a special assessment deferral program for seniors.

In 1973 the Legislature enacted the Homeowner and Renter Refund program (HARRP) to

provide tax relief to low- and middle-income Oregonians. The program was modified in

1989 and phased out in 1991. While it existed, the program provided property tax refunds

to households based on income levels and property taxes paid (for renters, 17 percent of

rent was considered to be property tax), up to specified maximum refund amounts. The

refunds were initially available to households with incomes less than $17,500. Starting in

1989, the Legislature restricted HARRP refunds to households with non-housing assets

less than $25,000. The maximum refund amounts increased as income declined. For

homeowners, the maximum refund for the lowest income category was $750, declining to

$0 as income exceeded $17,500. The maximum refund amounts for renters were one-half

of those for homeowners. The 1991 Legislature phased out HARRP, making the 1990 tax

year the last year for refunds. For 1990, the household income limit was reduced to

$10,000; the maximum refund was reduced to $500 for homeowners, $250 for renters.

The Elderly Rental Assistance program (ERA) was a companion to HARRP that continued

after HARRP was eliminated. It provides tax relief to elderly renters whose rent, fuel, and

utility expenses represent a large share of their income. Starting in 1975, ERA refunds

were available to persons at least 58 years of age with incomes less than $5,000. If rent,

fuel, and utility expenses exceeded 40 percent of household income, renters would receive

an ERA refund instead of a HARRP refund if the ERA amount was higher. In 1990, with

the phase-out of HARRP, the income threshold for ERA was raised to $10,000, and the

rent, fuel, and utility expense threshold was reduced to 20 percent of income.

Homeowners 62 years of age or older who meet certain income requirements are able to

defer all property taxes. Under the Senior Citizen’s Deferral program, the state pays the

property taxes of participants and charges the homeowner 6 percent interest on the deferred

amount. Homeowners are not required to pay the taxes or interest to the state until

they die or sell their homes. Income eligibility requirements have changed multiple times

over the course of the program. For the 2001–02 tax year, the program was open to seniors

with household incomes of less than $27,500. Once approved, senior citizens are eligible

for the deferral in years when their federal adjusted gross income for the prior year

does not exceed $32,000. For the 2001–02 tax year, senior citizens who had household

incomes of $17,500 or less could also qualify for the Senior Citizen’s Special Assessment

Deferral program and have their special assessment charges for public improvements (e.g.

sewer or sidewalk improvement charges) deferred in a similar manner.

The Disabled Citizen’s Property Tax Deferral program, which began in 2001 for fiscal year

2001–02, is similar to the Senior Citizen’s Deferral program in that the same income limits

apply and property taxes are deferred at 6 percent interest. However, this program is for

disabled homeowners who receive Social Security disability benefits and are younger than

62.

Direct tax relief was granted to homestead property owners in maximum amounts of $800

in 1980–81, $425 in 1981–82, $192 in 1982–83, $170 in 1983–84 and 1984–85, and $100

in 1985–86. (The maximum amount granted to renters was 50 percent of the homeowner

maximum.) This property tax relief program (PTR) was repealed by the 1985 Legislature

(1985 Oregon Laws Chapter 784, Section 10).

The 1983 Legislature enacted a tax rate freeze effective 1984 through 1986. The law specified

the maximum tax rate that could be imposed by a taxing district. The maximum rate

was the highest of one of four factors: 1) the net rate in 1981, 1982, or 1983; 2) the rate

necessary to raise the tax base for the first levy made by the taxing district; 3) a temporary

rate limit approved by the voters for not more than three years; or 4) a levy adjusted for an

assessed value growth below 5 percent or a major decrease in non-ad valorem tax revenue.

The 1989 Legislature passed legislation to reduce the property taxes of high-rate, lowspending

school districts. The program, commonly referred to as targeted tax relief, provided

relief in two ways. First, it set a target tax rate, then provided offsets sufficient to

bring each qualifying school district’s tax rate down to the target rate. Second, it gave outright

grants to school districts with high rates and low spending. These grants did not offset

property taxes, so they represented added revenue for school districts. The 1991

Legislature eliminated the targeted tax relief program.