Description of issue

County assessment and taxation (A&T) offices value property, calculate and collect taxes, and distribute tax revenue to the taxing districts within their jurisdiction. 

County A&T offices receive financial support from the County Assessment Function Funding Assistance (CAFFA) program, which was established in 1989 when the Oregon Department of Revenue reported that the property tax asset – which is the funding source for cities, counties, schools, and special districts – would be in a “state of disintegration” without a system of statewide financial support. 

The Legislature funded CAFFA through the following three mechanisms: 

1. A $10 filing fee for real estate documents
2. A 25% retention of interest on delinquent property taxes
3. A $5 million investment from the State’s General Fund each biennium

At its peak, CAFFA supported statewide county A&T operations at 36%. Due to the statutory funding mechanisms not keeping up with inflation and the state pulling back their $5 million General Fund investment during the Great Recession of 2008, CAFFA funding to county A&T offices has slipped to just 12% statewide. 

CAFFA’s current funding levels are untenable and will worsen each year that the status quo remains. This has forced county governments to make difficult decisions with their limited general funds, resulting in loss of county A&T office staff, forfeited revenue from omitted property valuations, and depleted capacity to defend property valuations in court.

HB 3518  is the solution that CAFFA needs to get back on track. This legislation will sustain the property tax asset to the benefit of all property owners and taxing districts and will increase CAFFA’s statewide funding capacity from 12% to 25% by doing the following: 

• Increasing the $10 county clerk filing fee to $19, and then indexing it to inflation
• Replacing the current 25% retention of interest on delinquent property taxes with a 0.3% retention of all property taxes prior to distribution to taxing districts
• Reestablish the state’s investment in CAFFA with a $10 million appropriation from the General Fund each biennia. 

For more information, please see AOC’s one-pager on HB 3518. 

We appreciate your advocacy and engagement on this important issue. Please reach out to AOC Legislative Affairs Manager Justin Low if you have any questions about providing testimony on HB 3518. 

Talking points

• In ___ County, we have property that hasn’t been revisited for assessment in ___ years. 
• Over the last ___ years we have had to downsize our A&T offices from ___ staff to only ___ staff.
• Our county assessors estimate that there is $___ of assessed value out there that we haven’t captured on our taxing rolls. 
• As we head into fiscal year 2025-2026, ___ County is facing a $___ budget deficit. HB 3518 could help us avoid future budget deficits. 
• ___ County is having to make budget cuts in the following critical public services that our residents rely on daily (e.g., public safety, public health, behavioral health, libraries, document recording, utilities, waste management, social service programs, etc.). 
• Property taxes make up $___ or ___% of our county’s general fund. 
• The county general fund makes up __% of our public safety budgets.
• The county general fund makes up __% of our building and planning departments’ budgets, which support housing and economic development. 
• The county general fund makes up __% of our health and human services budgets. 

Testimony tips

• As best as possible, make the talking points reflective of your county’s current budget status. 
• Do not be afraid to get specific and technical on how this bill could impact current services.