Item 2D - 2005 Leg.Policies Doc - Laserfiche WebLink

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Property Taxes Before the passage of Ballot Measure 50 and the resulting introduction of a rate-based tax system, there was little .Oppose any modifications or ~corrections" competition between the public-policy to Measure 50 that reduce revenue to cities goals associated with exemptions and without full reimbursement from the State. the public-service activities carried out under a local government's .Oppose any modification to urban renewal budget. Even if a property was that affects maximum revenue collection exempted from taxation, the city's authority granted to urban renewal agencies under Measure 50 that would reduce urban levy remained intact, and the revenue was replaced by shifting the renewal revenues, cause compression where obligation to the remaining taxable compression does not exist under current properties, law, or that requires any retroactive reimbursement of tax revenue already This is no longer the case. Now, collected. property tax exemptions reduce revenue to cities. If the amount of assessed value is reduced because a property is exempted, then the amount of tax revenue collected is reduced. Without another form of revenue to replace the property tax loss, the result is fewer city services or reduced service levels. In fact, state- granted property tax exemptions are simply state expenditures of scarce local government revenue without consideration of the local government's priorities or needs. The realities of the new property tax environment faced by local government raise serious concerns about a) granting exemptions or other property tax reductions; and b) exemptions of intangible property. a. Granting Exemptions or Other Property Tax Reductions There is a concern that the State can grant property tax exemptions without regard to the impact such exemptions will have on local property-tax-dependent jurisdictions. It is recognized, however, that regardless of the revenue impact, there may be occasions when property tax exemptions or deferrals are the best method of serving a city's long-term interests. In those cases, the decision to grant an exemption should be made at the local level, rather than by the State. If, however, the State grants property tax exemptions or other property tax reductions without the approval of the taxing jurisdiction, the State should reimburse cities for the resulting revenue loss. The Tax Expenditure Report highlights a number of property tax exemptions that may no longer serve their public policy objective. Local governments would be well served by a thorough review of all of these expenditures. Recommendations: City of Eugene Legislative Policies, 2005 Session 10