Public policy organization criticizes Oregon's senior property tax freeze proposals

PORTLAND, Ore. (KOIN) — Two proposed measures could help Oregon senior citizens defer their property taxes. If approved, a political organization estimates the proposals would cause a $140 million gap in state funding by the end of the decade.

Initiative Petition 10, which could go on the 2024 ballot, and Senate Joint Resolution 202, which was introduced during the current legislative session, would freeze the assessed value of Oregon homes owned by residents over the age of 65.

According to those in favor of the measure, increasing property taxes have made housing “unaffordable” for seniors living on fixed incomes. The Oregon Center for Public Policy, an organization focused on “economic justice," argues the measure would exacerbate inequality in the state.

“Although it is difficult to put precise numbers on it, the revenue loss that would ensue from the enactment of either of the proposals to freeze property taxes for seniors would grow over time due to two factors: the structure of the policy itself and the aging of the population,” OCPP said. “As such, over time, it would eat away at the main source of revenue for cities, counties, school districts, library districts, fire districts, and more.”

The organization used the Oregon Department of Revenue’s property tax statistics and the U.S. Census Bureau’s American Community Survey to determine how much funding local governments would lose with the senior tax freeze.

If the proposal were enacted by the 2026-27 tax year, researchers estimated that Oregon’s tax districts would lose $20 million in total. The following year, they estimated another $50 million deficit. By 2023, OCPP has projected a total revenue loss of up to $140 million.

According to the organization, 60% of Multnomah County’s discretionary budget comes from property taxes. It also noted that local revenue makes up 33.5% of school funding.

In addition to funding concerns, researchers claimed that IP 10 and SJR 202 would exclude renters who are more affected by the housing crisis.

“Households are considered to be ‘cost-burdened’ when they spend more than 30% of their income on housing,” OCPP said. “In 2021, 61% of renter households in Oregon that included a senior were cost-burdened in terms of housing. That was more than twice the rate of home-owning households that included a senior.”

The organization also found that a senior tax freeze would benefit 23% of Oregonians above the poverty line, compared to 12% of Oregonians below the poverty line.

OCPP additionally said the measures could worsen racial inequities, as white residents are already more likely to be homeowners than non-white residents.