Featured Stories

Other Pamplin Media Group sites


Should public property be transferred without payment?

Ed Allick and I were having a “senior” coffee the other day, when a rather irate Oregon City citizen sat down at a table next to us and said loudly, “Why do we have to pay twice?”

Ed, a successful businessman, past mayor and commissioner, teacher, wrestling coach and a boxer in his youth snapped out a reply, “Pay twice for what, the coffee?”

“I’m talking about the Mount Pleasant school property over on Linn Avenue. We paid once for it with our tax money way back when, now the city is using our tax money to buy the property for city offices. We are paying twice.” He got more agitated as he talked.

Caught a little off guard, Ed looked my way and said, “I think former Mayor Williams is up on that stuff, so John, why do we pay twice for the same piece of property? Isn’t there some credit or something we get on our tax statement in a case like this?”

The ball was hit neatly into my court.

“Well, I don’t think anyone ever asked us that very good question when we were in city hall, but common sense would tell you there should be a good answer.” I stumbled a bit. “Maybe we get a credit on our property tax statement, but I’m not sure about that. I’ve never noticed one on my tax bill.”

Our inquisitor said, “Well, I don’t know about that. All I want to know is why we are taxed twice for the same piece of property.” You guys ought to know about this.”

We agreed it was a good question. Why does one unit of government pay an overlapping government for public property?

Maybe there was an answer down at City Hall from our resident expert, City Manager David Frasher. How come taxpayers pay a second time for the same piece of property?

I didn’t reach the manager byphone, but his assistant volunteered to ask him and relay the answer. I think something was lost in translation, but I understood the manager suggested the schools would be the beneficiary of the sale with more money for the school budget, so we really are not “paying twice.” That was a bit of an answer, but not to the question at issue.

Even though the school district may have more money to work with to the benefit of students, the taxpayers have paid twice for the same piece of property. No money has been returned to the original property tax payers of 40 or 50 years ago.

In fact, the school district must be getting a profit on the tax money invested. The value of the land has risen remarkably from the time of purchase.

Ironically, the property value has increased measurably in the intervening years BECAUSE taxpayers have built houses, stores, streets, sewers, etc. around the school site. Taxpayers not only paid for the property initially, taxpayers are responsible for the increase in land value now being purchased by city property taxes!

The question needed to be asked of “higher powers.” How would a state representative answer the question “why do taxpayers pay twice for public property?” The answer was the same. There is no mechanism in place covering the situation of one government unit buying property from another except for the usual obligations of a government body selling or buying property.

After further discussion over coffee, Ed and I could only pose further questions and pose other situations. It’s true to say the schools (therefore the taxpayers) benefit from the cash received when selling to the city. It lessens the need, by a little bit, for more taxes for schools. That’s a good thing.

But SHOULD the taxpayers get a “return on their investment?” Such a refund would be quite small for each individual property owner when divided out over thousands of property owners, and probably not enough for most of us to make much a difference. And COULD we even find property owners who paid school taxes decades ago and pay them their share?

Another question is COULD a school district simply pass the property to the city for no remuneration? More importantly, SHOULD public property common to the two units of government be transferred back and forth without payment?

Obviously another “caffeine conversation” was needed to answer the basic question, “why do we pay twice for the same piece of property?”

One answer to the conundrum might be a “land swap.” Maybe the city owns a parcel of land having the same value the school district could use sometime in the future.

A better one perhaps is a “land bank.” How about putting the money received from a land sale away for a rainy day. The original investment would be enhanced in value and maybe preclude the need to use more tax money. We might pay twice the first time, but from then on we would be compounding our tax money.

“So there you are,” I said, as we got a couple of refills, “are those good answers or what?”

When it comes to taxes, emotion often overtakes intellect. Surely it will take a few more cups of senior coffee to explore the next good question from a concerned taxpayer. We’ll be in the office.

John Williams is a former mayor of Oregon City.



Local Weather

Cloudy

56°F

Clackamas

Cloudy

Humidity: 87%

Wind: 7 mph

  • 22 Oct 2014

    Rain 59°F 54°F

  • 23 Oct 2014

    Rain 59°F 49°F