Many cities and counties across the state are in financial trouble, Dirksen said, and the problem isn’t because of the still struggling economy.
“The problem is caused by a fundamental problem with the way tax revenue is collected in Oregon,” Dirksen said. “Not the overall tax rate, but the process.”
Part of the problem, Dirksen said, is Measure 50, the Oregon law passed in 1997 that limits the rise of a property’s maximum assessed value to no more than 3 percent per year.
But while the state is taxing homes at the same rate each year, the cost of doing business continues to rise.
This is the same problem ECONorthwest wrote about, it is why every municipal budget discussion in Oregon amounts to a question of "what will we cut this year". The only way to grow revenue faster then 3% is to either impose new use-based fees or allow development to reset property values to a higher (much higher) value. Remember this when someone tosses around the idea of another historic preservation district.“Though the assessed value only rises by 3 percent, the municipal costs increase in Tigard by about 4 to 5 percent in order to provide the same level of service as we did the year before,” Dirksen said.