Oregon's Economy: Revenue and Taxes
Oregon collects personal income taxes, corporate income taxes, property taxes and gasoline taxes. It does not have a state sales tax. The personal income tax rate ranges from 5 percent to 9.9 percent of taxable income. The corporate income tax rate is 6.6 percent or 7.6 percent of taxable business income. The minimum corporate tax ranges from $150 to $100,000. In 2009, voters increased the minimum tax from a flat $10. In tax year 2009, almost 78 percent of all C corporation Oregon taxpayers paid the minimum tax.
Property tax rates vary from community to community. Voters passed tax initiatives limiting the growth of property tax values to 3 percent a year. In addition, voters shifted much of the responsibility for funding public schools from property taxes to the state’s general fund. This has depleted resources for other programs that are also dependent on the general fund. When the 2001 recession struck, public education and human services were hit particularly hard. A significant part of the reason for the intensity of the downturn, at least as experienced by those who lost employment, was the restructuring of Oregon’s tax system in the early 1990s. The demands on the state’s general fund, when faced with a decline in revenues, meant pervasive truncation of government services. Perhaps the most conspicuous victim was public education. School districts throughout Oregon were faced with shorter school years, larger class sizes and elimination of programs.
Landowners who harvest timber from lands in Oregon pay a tax on the timber harvested. The tax rate for 2012 and 2013 is $3.6841 per thousand board feet of timber harvested. This rate is set biennially by the Legislature based on the budgetary needs of the recipients. The recipients are the Oregon Department of Forestry for fire protection and monitoring forest practices, Oregon State University for forestry research and Oregon Forest Resources Institute for forestry education.
Measure 37 was approved by voters in November 2004. The law allowed owners of private real property to file claims against the state and local governments that enacted or enforced land use regulations that restricted the use and reduced the fair market value of their property. After establishing that a claim was valid, the government entity could pay compensation or waive the restrictive regulations so that the property owner could apply for a use that was allowed when the property was acquired. Approximately 7,000 Measure 37 claims were filed with the state, and, in all cases, the state waived land use regulations back to the date of acquisition. These claims included uses ranging from farm partitions and non-farm dwellings to 100-lot subdivisions, strip malls and gravel mining operations.
Measure 49 — which amended the scope of Measure 37 and clarified many of its terms — was drafted by the 2007 Legislature. Measure 49 was referred to the voters and passed. The compensation for claims that were filed under Measure 37, whether or not a waiver had been issued, was amended to limited residential development. Under Measure 49, claimants could elect for supplemental review of their claim by the Department of Land Conservation and Development (DLCD) if they had not already “vested” the use authorized in a Measure 37 waiver. Review under Section 6 of Measure 49 provided maximum relief of a total of three home sites. Section 7 allowed for up to 10 home sites, but required the claimant to submit an extensive appraisal demonstrating the loss of value due to the restrictive land use regulations.
Under Measure 49, DLCD has reviewed 4,660 claims involving 239,099 acres of rural land. Approximately 80 percent of those claims have been approved and home site authorizations are transferrable to new owners.
Going forward, Measure 49 also provides for claims based on new land use regulations restricting residential use, or farm or forest practices that reduce the fair market value of private real property.