Why is property tax so high? (Portland, Detroit: schools, income, maintenance)

[tprice7111]

Portland: An expensive bundle of joy

Originally Posted by dperry9

I found this online from some kind of educational institution in South Carolina. There was no copyright statement so I decided to repost one of the relevant sections.

Incidentally, the specific case is out of date (1993) and on the other side of the country, but it did say most of South Carolina's property taxes (58%) went to schools.




The Case For the Property Tax
One might rightfully ask, given the resentments against the property tax, why does it persist? There are a number of reasons why. Chief among them are the fact that it provides a stable source of revenue for local governments; nonresident property owners are taxed; it is often used to finance property related services and to construct publicly owned infrastructure; it is difficult to evade; and, it has enabled local governments to maintain some autonomy from state and federal control.

Stable Source of Revenue. For all its disadvantages, the property tax does have one advantage over rival revenue sources, such as the income tax and sales tax. It does not fluctuate as quickly with local and national economic ups and downs. When the economy is up, that may be a disadvantage. But, when it is down, one doesn't find sudden, unexpected drops in property tax revenues of significant proportions. Thus, it is relatively stable. And, in most cases predictable as well. To appreciate predictability, one need go no further than recall the difficulty the state of South Carolina has experienced in recent years with its revenue forecasting and the resulting budget reductions, often necessary in mid-year. One doesn't find this very often in local government, and the stability and predictability of the property tax is probably one of the chief reasons.

Reaches Nonresident Property Owners. Property owners who benefit from local services, but who live in other locales may often avoid sales and income taxes. But, they don't avoid the real property tax. Particularly property that is income producing needs to share its portion of the tax responsibility for financing government. By reaching nonresident owners, the property tax helps distribute the tax burden to all who should pay something.

Finances Property Related Services. Local government services like police and fire protection, construction and maintenance of streets, curbs, sidewalks, and stormwater drainage systems benefit most all in a community. Good services and solid infrastructure in a local government will, other things being equal, result in higher property values than in other communities with lower quality services and inadequate infrastructure.

Difficult to Evade. Failure to pay property taxes may result in a lien on the property, and utlimately in a tax sale to recoup the delinquent taxes. Compared to other taxes, collection rates for the property tax are relatively high, ranging often from 92 to 98 percent collection ratios. Although admittedly legally complex, property taxes are harder to evade than other taxes. Observe, for instance the controversy over mail order sales tax collections by state governments. Or, trying to collect income generated in another state. The property tax is much harder to evade and avoid.

Promotes Local Autonomy. Finally, the property tax provides more than security and stability for many local government, it also can provide a measure of independence. Local governments are subject to a variety of state and federal forms of oversight. As political subdivisions of the state they are circumscribed by constitutional and statutory requirements and constraints, such as forms of government they may use, revenue raising options, and general powers and duties.


In short, local governments are often dependent upon higher levels of government. Often, this translates into financial dependency. Yet, local governments are the closest to the people, and in the eyes of many the most accountable to the people. The property tax allows many local governments to be responsive to their citizens and deliver the services they need and desire. Why? Because for many governments, as in South Carolina, it is the only tax local officials have effective control over. In the words of one observer, "without a steady, strong flow of revenue, local governments cannot govern." The property tax is an important source of local revenue controlled at the local level.

[skiffrace]

Originally Posted by pdxMIKEpdx

...
My boat payment is 350 a month not including insurance.
My moorage runs me 100 a month for a nice covered slip that I rent for six months and pay in advance for, and get a discount because I pay cash.

Nice. But I keep my kayaks in the garage, at the extra cost of $0.
And I enjoy them more - several times\week most of the year.
I live in WashCo, but it would be the same in MultCo. MultCo with some of it financial follies can get annoying,
but deep down we all live in Portland.

I am a fouth generation Oregonian.

We respect that. You provide a perspective that all of us newcomers to the area miss.
But the world marches on. Oregon of today <> Oregon of yesteryear <> Oregon of tomorrow.

Originally Posted by Leisesturm

Guaranteed if the income tax were repealed and a sales tax put in you all would go ballistic when the reality hit that you actually do buy stuff on a near daily basis. The tax outrage would be constant and unrelenting. If an annual bite causes this much hand wringing imagine what daily usury would do to your stress levels. Washingtonians can come here to attempt to preserve some of their hard earned wages. ..

Sales tax (with food, clothing etc. exempt) is VOLUNTARY.
Suffer only if you crave bigger-yet stupid-tube, or another piece of iS*it.
The true necessities of life should be tax-free, and the best things in life are *free*, as always.

The 2 of you gentlemen have more in common than you think. We all love this place, and don't want Portland and Oregon to become another NYC, TX, CA, or even Seattle (NOTE TO ALL THE CORPORATE STIFFS CRUISING THIS FORUM: move to Seattle to "develop your careers", while we enjoy our lives here in Portland)
Long-time Oregonians love Portland as their fatherland, newcomers love it with the new-convert fanaticism.
If you truly love it, be ready to sacrifice by paying for it if needed (within reason). It won't be the same as 20, 30 or 50 years ago. Still, it will be better than 90% of US (Seattle included).

[pdxMIKEpdx]

Nice. But I keep my kayaks in the garage, at the extra cost of $0.
And I enjoy them more - several times\week most of the year.

Nice. To each his own.

Enjoy your kayaks.
They are a lot of fun.
My daughters family used to have a couple, but since I am an older guy, I'm not so agile, don't like getting wet, hate loading and unloading them, my range was limited, I couldn't take much with me, and frankly, and fishing is a pain in a kayak, unless you are goofing around catching bluegill or something small...

I keep my boat tied up at my dock through the summer, and I do not mind paying $100.00 for the convenience.
I take my boat out for afternoon cruises three times a week or more.

I drive up, walk down the dock, jump in, turn it on, loose the lines, and have fun.

After summer is over, and the tourists go home, and everyone is back in school and the frenzied summer season is over, the boat goes back on it's trailer, and I take it around the state to my favorite lakes and enjoy the uncrowded, peaceful, spectacular fall fishing.

It's not to big, it's not to small, and even my wife (who hates water) feels comfortable riding in it.
My kids use it for water skiing sometimes.

My boat has a nice hard top, a heater, comfy chairs, an excellent electronics package, and an economical 80hp four stroke engine, with a 10hp kicker that I use for fishing.

I can comfortably take it out in any kind of weather, and most conditions.
I can cruise around all day on a tank of gas.

When not moored on the river for three months (which is on Willamette, but south of the Portland area), my boat sits on it's trailer, in my barn, at a cost of $0.

It's a great boat, and to keep this post on topic, the reduction of property taxes and utility costs that occurred when I moved out of Portland and Multnomah county is the reason that I own such a marvel of modern nautical engineering.
I upgraded from a twenty year old boat.

I also realize that you can't stop the march of time and "progress".
We can't keep things the same forever, and frankly, when I look at Portland today, I realize it could have ended up much worse.

What really chaps my hide is when newcomers decide that they know more than the locals because they think that they have a "fresh perspective".
They don't bother learning any local history, they don't bother to try to figure out why things are the way they are, they just point out everything that they think is wrong with the area, and say you should have done this, you should have done that.
Gee thanks for the brilliant insight.
Many longtimers and locals just smile and nod their heads, not really paying any attention to them, because they figure they'll be gone within a couple of years anyway.

[Larry Caldwell]

Originally Posted by freemkt

There was a story in The Oregonian several months ago; apparently it goes back some years (1990s?) to a ballot measure (Measure 5?).

There is some historical context to property tax levels in Oregon; East Portland historically had much lower taxes than the rest of Portland and that huge difference persists today.

Yes, there is a 3% a year cap on property tax increases, but bonded indebtedness is not covered under the limit. If an area decides to build a new school, the bill goes on the property tax without limit.

[Pholtor]

Put it in perspective.

You in Portland get a higher quality of life and have a lower cost of living. Property tax where I'm at would be a STEAL at 6k.

[Steve Pickering]

If they would lower the property tax and guarantee they would, people might consider the sales tax in Oregon, but the greedy legislators have refused to consider it. They want to add sales tax on top of the existing property tax and fees they charge now. Therefor sales tax will not work in Oregon because we would be paying the highest tax in the nation.

[bler144]

Originally Posted by Steve Pickering

If they would lower the property tax and guarantee they would, people might consider the sales tax in Oregon, but the greedy legislators have refused to consider it. They want to add sales tax on top of the existing property tax and fees they charge now. Therefor sales tax will not work in Oregon because we would be paying the highest tax in the nation.

Personally if they do move to incorporate sales tax, I'd rather see them address revisions to the personal income tax over the property tax.

While no change can be fully equitable, the income tax is at least more transparent. Statewide about 40% of households are renter occupied, and call me a cynic, but I doubt pretty highly that property managers would pass through savings to renters. So renters could end up eating a sales tax without getting any relief on their housing.

Of course, reforming income tax but not property tax while adopting a sales tax would pinch people who are on tax-exempt fixed incomes. So ultimately you'd probably need to reconcile all the tax systems in one sweep, which is easier said than done.

[skiffrace]

Interestingly, each solution touted as "just" and "efficient", mainly benefits the social class the proponent belongs to.
Reducing property taxes is a "great" idea if you own property, but if you don't, it's "useless".
BTW: no chance in hell it would ever work. Property taxes are to large extent determined at county level - 36 in Oregon. See how likely they will all agree on anything.

Retirees fight tooth and nail against instituting sales tax and lowering income tax - can you guess why?
They use every Fear, Uncertainty and Doubt trick in the book to argue "sales tax won't work in Oregon".

That leaves the working stiffs to support the state with our income taxes. AARP members are well organized,funded and they vote.
Workers spend most of the day at work (or posting blah blah on city-data), and have little time and energy to research, think-through, organize and fight for what is good for us- the majority.
This, my friends, is deemokrasee in action.

[Steve Pickering]

So the answer is "Leave it alone". Oregon does not need or want a sales tax.

[Nell Plotts]

Oregonians do not trust politicians to offset any sales tax with reductions of other fees/taxes. They would rather leave well enough alone.

'Back in the day' (keep in mind I am over 70) there were two opinions about a sales tax: it is regressive and expensive to collect. With the advent of the computer sales taxes are less expensive to collect but they disadvantage our local businesses both competitively and from the standpoint of operating cost. I just don't see our voters opting for a sales tax.

And while I am at it if the Portland City Council proposes one, or assesses fees to cover the street maintenance money they have diverted, I will carry the flag on the march to vote them out of office. Am I riled up, you bet!