Why Keizer’s tax rate is $2.08

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Eppley (left) and Johnson (right)

Eppley (left) and Johnson (right)

By CRAIG MURPHY
Of the Keizertimes

Sometimes Keizer City Manager Chris Eppley has to give complicated answers to complex questions.

Then there are the times he has simple answers for seemingly complex questions.

Questions about potentially raising Keizer’s base tax rate fall into the latter category.

As has been documented in recent issues of the Keizertimes, the $2.0838 per $1,000 in assessed value base tax rate in Keizer is the lowest of any city included in Keizer’s salary survey.

While efforts are made to keep employee salaries as close to the median as possible, the lower tax rate means something has to give – namely, some city services.

So could the tax rate that’s been around for nearly 20 years be changed?

“It can’t be changed,” Eppley said. “It is a permanent tax rate. We can levy less than the max, but not more than.”

City Attorney Shannon Johnson also puts the funding bind in simple terms.

“Realistically, at $2.08 you can’t do anything other than stuff you have to have like sewer, police and water,” Johnson said. “The reality is all the equipment and improvements depends on $2.08. Unless we can get other revenues from other places – which we have tried – there is no room for discussion.”

Johnson showed city documents from 1996, when the current tax base was set. That was also the year Measure 47 was approved by Oregon voters, limiting the assessment of property taxes. Measure 50 in 1997 revised that law.

“Before Measures 47 and 50, jurisdictions imposed a tax base levy in terms of the total dollars they wanted,” Johnson said. “In the past (city councilors) wanted $1.9 million. After that, county would take that and figure out the millage rate, or the per thousand rate. They would say Keizer has X amount in property value and would figure out the millage. We just told them how much we wanted.”

Johnson noted city leaders at the time were going to the voters with levies every three years. That meant employees would get pink slips, with the hope being the following levy would pass so layoffs didn’t happen.

Eppley, who came to Keizer in 2000, noted three-year levies were not an ideal way to run a city. There haven’t been any such levies since his arrival.

“It was not efficient,” Eppley said. “You would spend a year gearing up for the election, then you don’t collect until the following tax cycles. It’s not a good way to do business. There have been no tax levies in my time here. I understand levies if you’re trying to buy something. You have something that will cost this much, so the levy will be for this many years. I can understand that. But developing programs or hiring with levies is a bad way to do business.”

That has meant a reliance on the low tax rate. Eppley and Johnson said only a constitutional amendment could change the way tax rates are figured; Eppley said there hasn’t been the political will to do such a change at the state level.

Eppley noted the old millage rate formula used in Oregon is still “by far” the main way taxes are determined around the country, fluctuating each year.

“It gives a lot more local control to setting budget and determining services,” he said. “If a community wants to add three new officers and 100 people say we want to even if it increases our taxes, they can do it. Here, we would have to turn them away, even if they came in demanding it with pitchforks.”

According to Eppley, making due with less has been a way of life since Keizer was incorporated in 1982.

“Keizer was created on the idea of providing low cost government, basic services at the lowest possible cost,” he said. “When you run into conflict is when other people have moved in from places with other services. They want those here, but they like the lower taxes. What we do is the best we can to provide services the community wants with the resources we have.

“We do a lot with fewer people,” Eppley added. “We treat people well, have a positive environment and have a low turnover rate. We don’t pay the highest or the lowest, we aim for the middle of road. It’s a good place to work. They respond well to the responsibility. They have more investment to the overall scheme of things. It works well for us. We’re used to it. If you translate that to another city, it would be difficult.”

City leaders depend on citizen surveys sent out every couple of years to see what citizens want for services.

“We translate those goals to the budget,” Eppley said.

The survey also lets leaders see how satisfied the citizens are with their local government.

“One of the questions is do you feel you’re getting a good bang for the buck,” Eppley said. “The response on that question is always over 60 percent, which is hard to accomplish. It’s hard to get that, when it’s 30 percent positive at the state level and 14 percent at the federal level. It dipped in the recession, but I think we will see it continue to go up. We generally haven’t seen demands for services we’re not providing.”

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