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Property tax increases coming in mail

Portland voters — who generously approved a $482 million school construction bond and a new county library district last November — are about to see the impact on their pocketbooks.

Property taxes are going up 9.2 percent overall in Multnomah County this year, and property owners will start getting individual bills in the mail next week, says Multnomah County Assessor Randy Walruff, who finished updating the county tax rolls Monday.

Most of the increase in property taxes is due to voter approval of three measures, Walruff says: the Portland Public Schools bond, the county library district and Metro’s natural areas levy.

The steepest property tax increases are expected for Portland residents served by Portland Public Schools, where Walruff calculates the typical property tax bill will rise 11.1 percent for 2013. That’s a $454 bump for owners of a home with a tax assessment of $188,590, the median for the county.

Portland residents living in the David Douglas, Parkrose, Reynolds and Centennial school districts will get increases of about half that level, or 5 to 6 percent, according to Walruff. Gresham residents can expect a somewhat smaller increase.

Total property tax collections for all of Multnomah County will go up $115 million over last year, the bulk of it due to the three voter-approved property tax increases. The Portland Public Schools construction bond was the largest bond ever approved in Oregon. Largely as a result, Portland Public Schools’ property tax collections will rise a whopping 22 percent for 2013.

And the county library district, while much smaller in size, just about doubled property taxes earmarked for libraries here. As a result, property taxes going to the county, including the library district, will rise 11.5 percent overall. The entire increase can be traced to the library district, which provided a permanent taxing mechanism so the library system doesn’t have to go back to voters every few years to approve temporary levies.

The library district left the county relatively flush this year when preparing its budget, because it no longer needs to supplement the short-term library levy with money from its regular general fund.

Many homeowners will be surprised to find the “real market value” of their homes, as listed in property tax statements coming soon in the mail, didn’t go up much. Despite double-digit spikes in many home prices this year, the county tax rolls are based on property values as of Jan. 1, 2013, so the rising values won’t show up until next year’s property tax statements, Walruff says.

But property taxes are based on assessed values, not actual market values. And two property tax limitations passed in 1996 and 1997 rolled back assessed values, so those still tend to be well below the real market values of homes.

The two tax limitations capped future increases in the assessed value at 3 percent a year, so the new property tax bills will be based on modest increases in taxable value in most cases, plus the impact of voter-approved measures that jacked up the tax rate.

Oregon’s patchwork of tax limitations continues to make the system more complicated, difficult to understand, and downright unfair, especially in East Portland and Gresham. That’s because closer-in Portland neighborhoods — which have seen home prices rise the most since the tax limitations were enacted — tend to have assessed values well below the current market values. In some cases, homeowners in inner Northeast and North Portland are paying taxes on assessed values that are only one-fifth of their actual home values. In East Portland and Gresham, homes tend to have assessed values that are approaching or equaling the market values.

The result is that East Portland or Gresham residents are paying more than their share of property taxes — based on the true value of their properties — than people in closer-in neighborhoods.

Walruff says he saw no evidence of that gap narrowing this year, and would be surprised if it didn’t grow.

“That’s still prevalent,” he says. “It’s been a theme for a while now; people want to be within 3 or 4 miles of downtown Portland.”

Hot real estate markets such as inner North and Northeast Portland continue to be hot, he says, and slower markets such as Rockwood continue to lag in terms of price increases.

“There’s no magic fix for that,” Walruff says.

County assessors found actual market values of homes in parts of Gresham fell, at least as of Jan. 1 of this year.

Homeowners living between Glisan Street and Interstate 84, and between 201st and 242nd avenues saw their real market values drop an average of 2 percent, Walruff says.

Those living between Southeast Stark and Division streets, and between Hogan and 282nd Avenue, saw their average real market values plunge 7

percent.

Though that won’t affect their taxable property values in most cases, it’s a reflection that some markets are faring much better than others. In contrast, the area of Gresham from Division to Palmquist saw an average increase in real market values of 13 percent, Walruff says.

The city of Portland is getting only a modest bump in property taxes it collects this year, or nearly 2 percent. But total property taxes going to city operations are dropping a smidgeon, by 0.4 percent. The increase is totally due to higher taxes collected to pay for police and firefighter retirements and disability payments. Property taxes collected for the Portland Fire and Police Disability and Retirement Fund will rise 6.5 percent this year.

There is some good — or perhaps sobering — news from the county’s new property tax roll information. The average real market value of a home in the county is now about where it was in 2006, before the Great Recession.

And folks living in the Riverdale School District — the wealthiest in all of Oregon — will see their average property tax bill drop about $55.

Walruff advises property owners to pay their bills before Nov. 15. After that, interest penalties will mount.