Tax Reform in Bend Oregon

Writing in this blog is merely formalizing and documenting talking to myself.  Nobody looks at it but I find talking myself to be enjoyable conversation.  Who knows who is listening in real time or later reading anything I write.  When I hear other actual voices joining in on my conversation with myself I will find another pastime.

Back to "Tax Reform in Bend".  I do like to digress when at a fork in the road.  The forks are more interesting than the road.

I can't fix national tax reform.  I might fix something that needs fixing related to property taxes in Bend, Oregon.  An equity failure of the state property tax system where a hand full of few owners of residential zoned property within city limits, far less than 1%....13 out of maybe 20,000.... pay taxes on a property assessment of $77.07 per acre while the far greater majority pay at a computational base rate of.....(guessing here to be absolutely sure that this is true without a doubt).... $100,000.00 per acre of land.  This year I bought the vacant bare land .25 acre lot next to my home for $225,000.00.  The tax bill I recently received assigns a Real Market Value to that lot of $216,270.00 and assesses the land value for tax computation purposes at $57,040.00.  Tax due 15 November 2017 on that assessment is $858.51.  That is on .25 acres.  If it was a full acre the assessment for tax would be in a fair ball park of more than $200,000 per acre.  Close enough in all the numbers is good enough to describe the disparity.

It would certainly be safe enough....(keeping everything on the safe enough to be most certainly true).....to say that a property tax value special assessment of $75.07 per acre on residential zoned property in the city is something that I am sure everyone wishes they could get but if they did then city services would cease.  It is a benefit for few that could not be extended to the many.  Not extended to the many because it is "special".  Exactly what makes it so "Special" for an equally "Special" few will follow...eventually as I meander through a run up to it.

The tax rate in Oregon is $15.00 (more or less) per thousand dollars of assessed property value.  The assessed value of my adjoining .25 acre is $57,040.00.  Tax due on that assessment is $858.51.  Applying the more or less rate of $15.00 per thousand with a relatively small degree of variation for all tax properties in the city, (state law thing) my tax would compute to $855.60.  Close enough for me to feel that my share of tax paid is comparable to what all property owners in Bend are paying if they don't have a special legal reason for lowering the actual assessed value of their property.

Most property owners don't have any special specific legal reason applied to lowering their assessed value. 

Benefit to the few at the expense of the many expressed as something like the "common good" is a good thing...or, if not, then a bad thing big problem if it is not fair?.  Big problem nationally, big locally.  Big local problems are something that stand a chance of local people to change.  Maybe just me.  At least it is a more substantial windmill to tilt at!

Public property is assessed for tax at zero. Fair.  It belongs to all of us.  Go figure.  No tax on church property also assessed at zero.  Ok, reasonable, I guess, that is the way it is.   Reduced tax on golf course land...... this is pushing it into the realm of if you can get it legally with a good enough story to make it legal then you can get it legally.  Good stories do not come cheap.  They come from legislation influenced by big time, big buck players.  In some cases there is a trickle down to the bit players as far a money goes.  Just because the big buck players got a break some nickle and dime player get it too.  That just takes some relatively minor introduction of "me too" legislation slipped into an often distantly or even unrelated bill.  It is the way things work.

The results of the way things work is seen in the amount of property tax some tax payers pay relative to what most tax payers in the city pay based on assessed value.  A picture of assessment and taxes paid on assessment in Bend can be drawn in different ways.  I'm not sure how to draw it for greatest information presentation vale but since it is a matter of clustering the distribution for relative comparison charts do the job.  Bell charts or others.

All this thought is aimed toward a public platform statement regarding the need to change the unusual and unjust tax advantage presenting a substantial legal tax avoidance opportunity to a few city property owners that have chosen to take advantage of it.  The downside of a public statement is that anyone with a minimum of two acres of land in the city exclusive of an acre for the dwelling only if there is actually a dwelling on it will learn about this "golden" opportunity and also take advantage of it.  The opportunity is called:   Designated Forestland.  That opportunity applies a special computation to the general property assessment value that everyone gets and most pay taxes on.

Designated Forestland is taxed in Eastern Oregon at a fixed land assessment value of $77.07 per acre 2017 tax rate no matter where the property is located in Eastern Oregon.  It is obtained relatively easily by anyone in Bend by application to the Deschutes County Assessor that meets the criteria for obtaining the assessment.  Basically a minimum of 2 acres and  plan to plant and grow trees for future harvest as timber for sale on the commercial market.

This property for example: https://dial.deschutes.org/Real/Index/183021 it is Designated Forestland in the city of Bend in a residential zoned area.  An overview of the surrounding area is here: https://dial.deschutes.org/Real/InteractiveMap/183021  Small lots with homes boarder the property.
Real Market Value: $493,510.00  ($60,038.00 per acre)
Assessed Value: $633.00 ($77.07 per acre)
Tax 2017: $28.57
Acerage: 8.22
Special Designated Forestland Assessment computation: 8.22 acres X $77.07 per acre =  $633.5154
Note:  Designated Forestland in Eastern Oregon regardless of location is assessed at $77.07 (2017)
Official Assessment Authority at this link
2017-18 Specially Assessed Forestland Values - Oregon.gov 
Not much tax to pay on 8.22 acres of land in the city.

Adjoining this property is a street of lots under development seen in the same overhead view
https://dial.deschutes.org/Real/InteractiveMap/183021
This example bare land property in that view: https://dial.deschutes.org/Real/Index/273384
with this overhead view: https://dial.deschutes.org/Real/InteractiveMap/273384
Real Market Value: $255,000 ($1,593,750.00 per acre)
Assessed Value: $166,260.00  (1,039,125.00 per acre)
Tax 2017: $2,598.00 ($16,237.00 per acre)
Acrerage: .16


Look at the large acreage nearby that does not have the Designated Forestland assessment: https://dial.deschutes.org/Real/Index/125163
with this overhead view: https://dial.deschutes.org/Real/InteractiveMap/125163
Real Market Value: $1,631,380.00 ($46,611.00 per acre)
Assessed Value: $274,870 ($7,853.00 per acre
Tax 2017: $3,775.14 ($107.35 per acre)
Acreage: 35





The property owner that gets this designation may have a Real Market Value of