Bladine: Proposed ballot measure would disrupt city services
Tax-limiting ballot measures are nothing new in Oregon, but the proposed McMinnville referendum on city property tax levies is a rarity. If petitioners can collect 3,540 signatures from active registered voters, look for a contentious political campaign with high-stakes consequences.
By the numbers:
McMinnville can levy $5.02 per $1,000 assessed value to fund general government services. Of that, about $1.50 per $1,000 financed fire and EMT services until voters last year created an independent fire district with its own dedicated levy of $2 per $1,000.
The city retained its legal authority to levy $5.02, but reduced its 2023-24 levy to $3.52 per $1,000. The city Budget Committee has approved an increase to $4.02 per $1,000 for 2024-25, and currently intends to phase in the remaining tax authority. If fully phased in, McMinnville property owners would pay $7.02 per $1,000 for combined government services previously costing taxpayers $5.02 per $1,000.
As perspective, a McMinnville levy of $1.50 per $1,000 produces approximately $5 million in property taxes. The newly proposed ballot measure would eliminate $1.50 from McMinnville’s taxing authority unless approved, in whole or in part, by voters.
Along the way, there will be “teaching moments” related to property tax levies.
For example, the submitted ballot title summary states: “This measure, if approved, would limit the city to levying a tax rate of $3.52, plus 3 percent per year.” More accurately, an unchanged tax rate would be applied to property values that can increase 3 percent per year, and also be levied on new property developments.
Gathering 3,540 valid signatures is no easy task, so this proposal may never see light. But petitioners may capitalize on new revenue-enhancing city fees that many property owners view as de facto tax increases.
If an election materializes for this proposal, there will be two clear sides of the campaign:
From the city: “We told voters that approval of a new fire district would free up tax revenue badly needed to maintain other city services, and voters approved the new district.” From voters: “We didn’t really understand what you were doing or how much it ultimately would cost us.”
In the background, prospects of this ballot measure going to a vote could have a dampening effect on various city initiatives. Increasing fees might annoy voters; spending increases might later collide with new tax limits; and significant infrastructure improvement plans could have new timing challenges.
It definitely is a complicated time for city finance.
Jeb Bladine can be reached at jbladine@newsregister.com or 503-687-1223.
Comments
Don Dix
Jeb -- from my perspective, it seems the city 'encouraged' voters to create a new fire district with the added $2/K tax. At the same time, every potential city project was drooling at the prospect of an unexpected funding source, simply because the scheme was pre-planned all along (by keeping a defunct city cost)
If presented as -- 'you are voting to increase your tax liability by another $2/K, with the city keeping the $1.50/K you are currently paying for fire protection service' -- would the measure pass? Not at all likely!
CubFan
Don Dix... I completely agree with you. I don't think most people understood the tax implications of what they were voting for.