Myron Shenk, of Albany, leans on the frame of a destroyed bunk bed at the remains of a weekend home he shared with his wife in Detroit on Saturday, Sept. 27. (Amanda Loman/Salem Reporter)
On top of badly damaged or destroyed homes and businesses from last month’s wildfires, property owners in the Santiam Canyon will soon face tax bills for property that has drastically changed in value.
Marion County Assessor Tom Rohlfing said that his office is preparing to send out tax statements to property owners on Oct. 19 for payments that are due Nov. 15.
While property owners can apply to have their property taxes reduced, Marion County Commissioners are concerned that the relief won’t be enough.
“Just think about it, you just lost your house,” Marion County Commissioner Kevin Cameron said at a press conference last week. “You’re going to open this green envelope that says, ‘hey, by the way, you have $3,000 in property taxes.’”
State law allows property owners to seek a cut in their tax bill if their property has been badly damaged or destroyed by fires, tornadoes, lighting or an “act of God.”
Rohlfing said his office would consider a property owner’s request for relief, evaluate the property’s taxable value and then adjust their tax bill to account for the damage. Property owners have until June 30 of next year to seek relief from this year’s tax bill.
But some property owners might not catch a break.
Tax bills are based on the taxable value of a property’s land and structures as set by the county assessor’s office at the beginning of the year. To qualify for a reduction, property owners must show that the fire caused the real market value (the price it would likely get on the open market) of their property to drop below its taxable value.
Rohlfing said some properties that have a taxable value that is much lower than its real market value, which could mean relatively little or no tax relief.
For instance, a single-family home in Detroit on a quarter acre, with a finished attic and garden shed had a taxable value of $120,870 for last year’s taxes. The property’s total tax of $1,829 for both the land and the structures helped pay for local school bonds, the library, the fire district, as well as the city and county governments.
However, the property had a market value of $217,79, so the fire would have to reduce the overall taxable value by more than $97,000 for the property owner to see any tax relief.
“It is totally different on every property,” said Rohlfing.
Properties are evaluated for both the values of the land as well as any structures built on them. Rohlfing said that there are some properties that have most of their value in the land, so even if a property owner saw their barn or house burned they, could get little to no tax relief.
He didn’t know how many properties could be eligible for relief but said that this year’s tax statements will include information about how to apply for the exemption.
Property owners who qualify for relief would have their tax bills reduced retroactively, said Rohlfing, and could get a refund. He didn’t provide a timeline for how quickly damaged properties will be evaluated but will respond as efficiently as possible.
“This is our first natural disaster of this scale,” he said in an email.
During a press conference last week, Marion County commissioners expressed concern that even with reduced property taxes, owners who’ve seen their homes and businesses destroyed will have a hard time paying their bills.
“A lot of people who ran from the fire don’t have that money,” said Marion County Commissioner Colm Willis.
Property owners who pay their bills late will be charged 1.3% monthly and 16% annually. But commissioners said the only way to allow a delay without a penalty would be to change state law. While they expect Gov. Kate Brown to call a special session to address the fire’s devastation, they said it won’t happen until after the first property tax payment is due.
Cameron added that legislation is to give property owners some leeway on paying their taxes.
“But what we want to have done and what’s going to come out of there, obviously, it could be two different things,” he said.
The devastation left by the fires means that cities, schools and other local governments could have less money as they write budgets next year. Local governments apply a set tax rate to the value of real estate in their area. The fires likely mean less value to tax, meaning a drop in revenue that pays for everything from teachers to fire hoses.
Until property values are adjusted, those governments won’t know what cuts in their revenue will be.
Detroit saw some of the worst damage from the fire with portions of the town reduced to ash. According to data from the assessor’s office, there are nearly 700 property tax accounts for Detroit that include land, homes, structures and business equipment.
Mark Gharst, policy advisor with the League of Oregon Cities, said the fires won’t shouldn’t significantly affect city budgets this fiscal year, which ends next June. But the following budget cycle will be a problem and they will need financial help from the state or federal government, he said.
He said that hopefully the Legislature will provide some assistance. He said there could be money from the Federal Emergency Management Agency. But he added, “FEMA money is slow money.”
Contact reporter Jake Thomas at 503-575-1251 or [email protected] or @jakethomas2009.
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