'Tis the season


Our annual property tax bill arrived yesterday. The taxes are due on November 16 this year. If you don't pay by then, you have to pay extra.

The timing of the invoice is interesting. It always seems to get here after people have already received their ballots in Oregon's all-vote-by-mail election system. This year, the pressure was on to vote early, and so a lot of Portlandians voted themselves a bunch of new taxes before they even saw how bad the existing taxes are.

Of course, people who don't own property don't get a property tax bill, and so renters don't see how bad the situation is. Mr. Landlord does, however, and that's part of why your rent is so high, kids.

But I digress from the point of this post, which is to spend some quality time with the bill, see who's getting our money, and think about what it's going for. I used to do this on the old version of this blog, and it's relatively easy to get back into that groove. It's a few hours I'll never get back, but to me, the subject is fascinating, if sobering.

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Let's start with who gets the money. Of each $1,000 in property taxes on my bill, I count $395 going to the City of Portland, $194 going to Multnomah County (including the library), and $343 going to the Portland public school district. That leaves $68 for other hangers-on, like Portland Community College ($23.50), Metro ($21), the educational service district ($16), the Port of Portland ($2.50), and the historical society ($2).

That blend has morphed a little over the last decade. Ten years ago, the city's cut of the $1,000 was $435, the county got $223, and the school district got only $268. And so over the years, the school district has been sucking up a bigger chunk of the property taxes Portlanders pay. Those fancy remodeled high schools are nice; at these prices, they'd better be. And don't forget, the city's piece includes $16 "for the children," and I think a lot of that goes for services that you might expect a public school system to provide. (The county is currently pushing a county income tax for pre-schools, which is also really a school district function, in my book.)

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Another interesting exercise is to analyze how Portland City Hall spends the property tax money it receives. Let's assume the city collects $100 of property taxes on a lot. Where does that $100 go?

You might be surprised to learn that only $40 of the $100 goes into the city's general fund, to pay ongoing operating costs. The other $60 of the $100 is already spoken for. First, $27.50 goes into the dark hole known as "urban renewal." The "children's levy" takes another $4, and this year $3.81 is going to pay back bonds, money the City Council borrowed and spent long ago.

Of the $100, another $24.33 goes to pay retired police and firefighters. The city has nothing put away for public safety pensions – that's right, zero – and so the property taxes go straight to the retirees. (In fact, the city usually borrows the taxes from a bank a few months before the revenues even come in.)

And so lo and behold, once you set aside the set-asides, there's only $40 left out of the $100 currently collected to pay for the things the city needs now.

That mix has changed over the years as well. Ten years ago, out of $100 in property tax that the city collected, $43.61 was available for the general fund. Only $25.57 went to "urban renewal." "Urban renewal," which to me is largely a waste of money, has obviously gotten hungrier. The "children's levy" has also increased, from $3.87 to $3.99, and the bond chunk has exploded, from $1.85 to $3.81. The police and fire pensions ate up $25.10 of the $100 a decade ago, and so that percentage has actually declined a little, although in dollar terms that tax has increased by 3.32 percent a year.

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Of nearly two dozen categories of property taxes on the bill, all but one increased this year over last. Overall, the bill was 3.82 percent higher than last year's. That is pretty steep, but over the last decade, our bill has grown at an even faster clip – annual increases averaging 4.65 percent compounded annually. 

This year's worst culprit, in percentage growth terms, were taxes to pay City of Portland bonds, which went up a staggering 86.33 precent over last year, with a 10-year compound growth rate of 11.41 percent a year. I recently looked at the city's debt picture, and I thought it showed that bonded debt wasn't growing all that quickly. Maybe it's just that more bonds are coming due, and so the city's required payments to its bankster buddies are much larger. I'll have to look further into that.

Also jumping is the police and fire pension tab, which is up 6.51 percent from last year. "Urban renewal" is up 4 percent. And given how big those two pools of money are, those percentages add up to serious dollars.

The Metro bond portion of the bill is down 13 percent, but that's small change given how relatively few dollars are involved. Metro bonds make up only about 1.4 percent of the overall tax bill, and so a decrease, while nice, doesn't make much of a dent.

At the risk of causing you to pass out, here's a spreadsheet of the trends:

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So there you have it, more than you ever wanted to know about our property taxes for another year. It's as depressing as it is dry. Between the constant increases in taxes and the obscene jumps in water and sewer rates, Portland's become an awfully expensive place to live. 

People with money react. Willamette Weed ran a weak hit piece yesterday on the spouse of the Republican candidate for Oregon secretary of state. He reportedly can be found up by Spokane a lot of the time, and the insinuation is that it's to try to beat Oregon taxes. For a time, Char-Lie Hales, who went on to become mayor of Portland, voted in Oregon but claimed Washington residency for tax purposes. 

Even I myself have entertained the thought of moving, I must confess. If I changed my domicile to Clark County, Washington, I would save so much in Oregon taxes that I could have a limo driver on call to take me to Portland whenever I wanted. I could stay in the Presidential suite at the Benson, too.

But right now, we're not going anywhere, and so it's time to return the deposit bottles, sell some plasma, and get ready to write the check in a little less than a month.

Comments

  1. This is really great! Thanks for breaking it down. A little more info on the Urban Renewal. Those funds are siphoned away from the City's tax portion. So, if/when Urban Renewal goes away, the funds will simply increase the amount the City has to dole out (you will see no change on your tax bill, except in title). Those funds go directly toward redevelopment including a sizeable amount toward housing and a small amount toward roads and other infrastructure, but they are limited to redevelopment and thus couldn't be used for anything else until the district expires.

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    Replies
    1. "Urban renewal" is "Prosper Portland," formerly the Portland Development Commission. It's a tumor, in my opinion. "Urban renewal" should be wound down, and out.

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