Taxes create confusing puzzle

It's a riddle. If Deschutes County property owners didn't pay more taxes than they owed, how did they pay too much?

The riddle has snagged county politics, and may have an effect on the county commission race between Nancy Pope Schlangen and Tom DeWolf, as well as the upcoming vote on the sheriff's levy and library bonds.

The problem is that Measures 47/50 - attempts to revolutionize Oregon's system of property taxes - had some flaws. The legislation was intended to roll back property taxes to levels below those paid in 1995-96.

However, the laws included some government expenses in the '95-'96 number, such as expiring sheriff's levies in Deschutes and Linn counties, that possibly should have been left out. It also ignored new sheriff's levies approved in following years that possibly should have been included when lawmakers were calculating the impact of the tax cuts.

New levies, passed by a "double majority" ( a majority of those voting and a majority of registered voters) were exempt from the law's tax limitations.

In crafting Measure 50, the state set a target for tax reductions statewide at 13.2 percent. All 1,800 taxing districts in Oregon were told how much to cut their budgets for this fiscal year to achieve that targeted average of 13.2 percent.

However, because expiring levies were followed by new levies, Deschutes and Linn counties were given more "taxing authority" than some other taxing districts.

Other taxing districts across the state were given less "taxing authority." They were forced to ask their taxpayers for less money. Their property owners paid less taxes.

Deschutes and Linn counties were able to ask taxpayers for more money. Taxpayers in these counties paid more taxes.

This was not a local grab for taxpayer dollars. It was the result of circumstances that weren't considered when the law was written: that in two counties taxpayers would approve sheriff's tax levies in 1997 to replace ones that expired the year before.

The earlier sheriff's levies were counted and possibly shouldn't have been, and the later levies were not taken into account and possibly should have been. But that was how the laws were written.

Should the money be returned? The question becomes, unfortunately, "what money?" Basically, Deschutes County governments were told by the state how much they had to cut from their budgets. They cut what they had to and spent the rest.

Do county citizens want services cut even deeper next year to make up the difference?

Deschutes County taxpayers did approve the new sheriff's levy at $6.7 million. Did they intended that amount to be reduced by state averages?

At the same time, Ballot Measure 47, which rolled back taxes, passed by a wide local margin.

For now, at least some of Deschutes County's taxing districts and politicians are saying that taxpayers asked for (through Ballot Measure 47) and should receive a larger tax cut than they got. There is currently no legal way to make this happen.

State Senator Neil Bryant, former State Rep. Dennis Luke and State Rep. Ben Westlund have all been working on legislation that would correct the problem.

County Commissioners Nancy Schlangen, Linda Swearingen and Bob Nipper have put the additional money the county received aside for a property tax offset, possibly next year.

Commission candidate Tom DeWolf has said the money should be returned. However, last week he received some information from the Oregon Department of Revenue that the amount of taxes paid were in fact correct.

So there is disagreement among the various branches of state government over whether there is a problem, and if so, what the problem might be. Any legislation passed could possibly have an impact on the entire state.

The taxing problem in Deschutes County is a riddle. How to fix it without doing more damage may be an even bigger one.