On May 19, 2020, Oregonians will be voting on primaries as well as differing local and state tax initiatives, but the ability to pay current taxes under the current system during the COVID-19 crisis should be foremost in the minds of taxpayers.

Oregon is struggling under the weight of a collapsing local economy. That so many businesses almost immediately closed their doors or proceeded to lay off most of their staff reveals much about the economics of Oregon that the Oregon state government conveniently ignores as a part of its narrative. The Oregon economy has experienced some good times but has always been fragile. It always feels the first downturns and is often among the last states to benefit from an improving national economy. Now Oregon business owners hope they can get enough help to avoid bankruptcy. The every day Oregonian just wants to be able to pay bills, and a very big bill is coming soon.

Unlike extending the time in which individuals can pay personal income taxes, Oregon has made no effort to address that payments of property taxes are due April 15, 2020. For most home owners in Oregon, property taxes on primary residences amount to an ever increasing annual bill which are not indexed to ability to pay. Oregonians that can afford to have more than one residence generally speaking are more likely to have greater incomes and more liquidity. For everyone else, that is one income and one home. And now for many, no income. The state is calling on renters not being evicted in the interim, which we hope should avoid placing an even greater burden of once middle class Oregonians into a state of homelessness. Yet the state keeps its hands out and expects to be paid on time.

Federal Stimulus for State Taxes

Yes, the state wants you to get that $1,200 from the federal government because it wants you to turn around and pay your taxes. For this reason in the short term, the State of Oregon should entirely waive the May 2020 property tax payments on primary residences. Oregonians that distribute their $1,200 to the state can't pay other bills or pay for goods and services that in turn will improve the likelihood that private citizens can keep their jobs.

Once the initial COVID19 crisis is over, the legislature should evaluate a new methodology for assessing property taxes that indexes property tax to income. Because Oregon economics have always been fragile and will continue to be fragile for some time to come, the state should be assessing taxes based on the ability to pay.

I will write more about a methodology for how this could work that would scale what people pay according to what they are earning. It would also mean that if you are making over a certain threshold, you could be paying more. At the end of the day though, since property taxes are not based on consumption but typically assessed towards paying government services for the public good.

Arguments Based on Costs

I want to dispel one major argument about waiving this first property tax payment and primary home residence property tax. Property taxes as they stand now in Oregon do pay for essential services. Reducing sources for services means either you reduce the services offered or you find new sources of revenue to pay for them. Arguing that you are condoning harm based on reducing intakes of funds that pay for essential services is fallacious, and verging on an ad hominem attack. Any good custodian of the public good should always be looking for efficiencies to increase value while maintaining or lowering costs. Assuming that is true, then spending on truly essential is a common good. How the funds are acquired to do so is a completely separate matter.