How Measures 5 and 50 Affect Your Property Taxes

Two statewide ballot measures approved more than 30 years ago have continued to have a profound effect on how cities can generate revenue to support community services decades later.

Measures 5 and 50 were approved by Oregon voters in the 1990s. Together, they changed how property taxes are calculated for all types of properties - everything from industrial factories to small businesses to your own home. They also put strict limits on how much property taxes can increase each year.

Property taxes: What does it all mean?

The League of Oregon Cities publishes helpful videos and resources explaining the of the impact of Measures 5 and 50.

Here are a few highlights:

Property tax increases are limited to 3% per year

In general, a typical homeowner's property taxes can't increase more than 3% a year (even if their home value increases more than that amount). This means that tax revenue for the city generally tracks at around 3% per year. In recent years, this has become particularly challenging as costs to provide services (vehicles, equipment, personnel) has risen far more than 3% per year.
As a result, property tax revenue has been shrinking as a percentage of total city revenues. Services supported by property taxes (such as public safety, library, and recreation) are increasingly challenged to create a balanced budget each year.
The 3% property tax increase also applies to other taxing districts in our community. So the Benton County Library Service (which supports our local library) as well as the Benton County 911 Service District (which funds our 911 emergency dispatch service) are both limited in how much their property tax revenue can increase each year.

Property values: Real Market Value vs. Assessed Value

For most of the last century, your property taxes were based on the home's Real Market Value, which is exactly what it sounds like: the price you could expect to get for your home if you sold it tomorrow.
Measure 50 changed this approach by introducing Assessed Value, which is a valuation number that isn't strictly tied to Real Market Value and can vary widely from property to property.
This change reduced overall property tax revenue and also made it more difficult for typical homeowners to understand how their annual taxes were assessed.

Cities can't increase their permanent tax rate

The City's permanent tax rate was set in 1997 at $5.1067 per $1,000 of assessed value. It hasn't changed since then.
Contrary to what you have might read on social media, cities like Corvallis can't increase their permanent tax rate. So while your individual tax bill might go up as your property increases in value over the years, the city's tax rate has stayed the same for the last 30 years.

Cities in Oregon have just a few tools to raise additional revenue

Cities can't raise their permanent tax rate that was set in the 1990s. They can use voter-approved local option levies to raise additional funds. Levies are limited to five years before they must be renewed by voters. The City of Corvallis has a local option levy that funds livability services at the Library and Parks & Recreation.
Cities can create and implement new taxes to fund core services. Some examples include a payroll tax or an income tax. Several cities in Oregon have implemented new taxes to support community programs and services.
Cities can also implement fees on their monthly service bill. Corvallis is one of many cities in Oregon that implements fees in this manner.