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Passed in 1990 with a mere 52% of the vote and becoming effective in the 1991-92 tax year, Oregon Ballot Measure 5, in tandem with Oregon Ballot Measure 50 (passed in 1997), did away with the state's previous pure levy property taxation system and introduced tax rate limits and hybridized levy-based and rate-based system of taxation. The proposed language read:
"5. State Constitutional Limit on Property Taxes for Schools, Government Operations.
Question -- Shall constitution set limits on property taxes, and dedicate them to fund public schools and non-school government operations?
Summary -- Amends constitution. Limits 1991-1992 property taxes for public schools to $15, and property taxes for non-school government operations to $10 per $1000 of market value. Schools limit gradually decreases to $5 per $1000 in 1995-1996 and after. Government operations limit remains same. Limits do not apply to government assessments, service charges, taxes to pay certain government bonds. Assessments, service charges shall not exceed cost of making improvements, providing services. General Fund to replace, until 1996, school funds lost due to school limits"
Prior to Measure 5, tax districts levied taxes based on budgetary needs and tax rates were determined based upon the full market value of property as assessed by county assessors. When the levy was determined, it was then divided by the total real market value of all properties in a tax district which produced the district tax rate. Under this system, imposed taxes and levies became indistinguishable, though most levies were legally limited to a maximum annual growth of 6% with any levy growth over 6% becoming subject to voter approval. The difference in the district tax rate depended year-to-year on the construction within the district, increases or decreases in property value, and a variety of other factors that might cause the tax rate to rise or fall, creating variability in yearly tax liability by property.
Measure 5 introduced individual property tax limits, applying to operating taxes. The rate was initially set set at $15 per $1,000 real market value for school taxes and gradually lowered to $5, and $10 per $1,000 real market value for general government taxes, resulting in a hybridized levy-based and rate-based system of taxation -
"For properties where the school and general government taxes were below the limits, the process resembled a levy-based system; taxes imposed depended on levies. For properties where the calculated taxes exceeded the limits, and hence the tax rates were fixed at the limits, the process more closely resembled a rate-based system because the taxes imposed depended on assessed values" (State of Oregon).
The effects of the diminished funding for schools were felt acutely at OSU, as a student group formed to urge the legislature to convene a special session to mitigate the effects of the measure's implementation. Then-President Byrne released a statement about the effects of the implementation of Ballot Measure 5, namely that it would prompt university budget cuts at approximately 20%, an estimated loss of nearly $30 million, approximately 3,000 students, 800 faculty/staff, and a higher tuition for students. He also emphasized that the budgetary cuts would result in fewer academic programs, including cuts to Education, Telecommunications, Film & Speech, and the cutting or relocation of the schools of Journalism, Broadcast Media, Religious Studies, and Language Arts.
The Special Collections and Archives Research Center holds several collections that make note of Ballot Measure 5:
The Student Club and Organization Records includes materials from a short-lived student political organization dedicated to mitigating the effects of Ballot Measure 5.
The Robert W. MacVicar Papers includes materials about then-President MacVicar's understanding of the impacts of Ballot Measure 5.
The Oregon State University Sesquicentennial Oral History Collection includes an interview with Bill Lunch about the impacts of Ballot Measure 5.
Accessions 2007:093 and 2011:064 of the Office of University Publications and OSU Press Records both explicitly mention Ballot Measure 5 and its impact on the university, centering largely on the effect of the measure on the OSU Press, which was almost shut down.
The President's Office Records Subgroup 15 include mention of Ballot Measure 5 and then-President Byrne's reaction to the passage of the measure.
"Leading OSU During Difficult Times", an oral history interview with John Byrne, includes extensive discussion of Measure 5 and its impact on OSU.
For more information about the measure, the Oregon Historical Society has published a brief historical recounting its drafting, passage, implications, and ballot measures and bills that followed Ballot Measure 5.
121 The Valley Library
Corvallis OR 97331–4501