What is the difference between a bond and a levy?
Bonds and levies are paid for by property owners.
- Salem property owners will see an 8% increase on their tax bills due to a new levy for library and park services.
- Due to a legal limit known as compression, Salem will not receive the full estimated $14 million from the new levy.
- Property taxes for school bonds are also increasing in districts like Salem-Keizer and Chemeketa Community College.
Many property owners in Salem are in for a shock when they see the 8% increase on their property tax bills this year.
That’s because voters in May passed a 97 cent per $1,000 of assessed value local operating levy to pay for library and park services.
But that increase pushed many Salem property owners into compression, meaning they won’t pay the full amount of levy.
Oregon law sets limits of $10 per $1,000 of real market value for government operations and $5 per $1,000 of real market value for school district operations.
In Oregon, taxes are on assessed value, not real market value.
Compression kicks in when property taxes exceed the real market value limits and local option levies are the first to lose money.
That means Salem won’t receive the full $14 million in the first year that it estimated from the 5-year levy, which started July 1.
The city will lose about $2.3 million in Marion County from that levy due to compression, according to county figures. It also will lose about $50,000 for the Polk County side of Salem, according to tax assessor Valerie Patoine.
Tax statements were mailed Oct. 14 in Marion County and Oct. 17 in Polk County. Property owners receive a 3% discount if their taxes are paid in full by Nov. 17.
Other governments are also affected. Overall in Marion County, governments will lose $4.9 million in compression this year and Polk County governments will lose $271,000.
Why is the cost of school bonds going up?
Property tax increases are generally limited by Measure 50 to 3% per year but voters can pass bonds or levies to exceed that cap.
Bonds don’t count against the Measure 5 limits for compression.
Property taxes for school bonds went up in two districts that include Salem.
The Salem-Keizer Public Schools bond payment went up by $2.2 million and Chemeketa Community College’s bond went up by $1.7 million, according to Marion County tax assessor Tom Rohlfing.
Voters in Chemeketa Community College’s district – which includes Marion and Polk counties, much of Yamhill County and a small part of Linn County – passed a 27 cent per $1,000 bond in May.
That replaced an expiring Chemeketa bond that taxed property owners at the same rate.
But the cost of Chemeketa’s bond payment this year was $13.5 million, up $1.7 million from last year. That’s because the previous bond payment was $11.8 million as that bond was paid off, according to Chemeketa spokesperson Marie Hulett.
The $619 million Salem-Keizer Public Schools bond was passed by voters in 2018.
Salem-Keizer Public Schools spokesperson Aaron Harrada said the rate for the bond has not changed, but the increase is due to the increase in property values and taxes from new properties.
Where else are property taxes going up?
In Monmouth and Independence, taxes are going up by an average of 4.2% over last year. That’s because the Central School District increased its tax rate to $2.0068 per $1,000 from the previous $1.94 per $1,000 last year.
The district’s current bonds are expected to be paid off in 2038.
Property taxes also will go up 4% in and around Aumsville as the Aumsville Rural Fire Protection District passed a 44 cent per $1,000 operations levy.
In Willamina, rates increased because of the school district’s $2.5 million bond that was passed in 2024.
In Hubbard, the fire district’s levy increased to $1.10 per $1,000 from its previous 99 cents per $1,000, which represents a slight 3% increase after voters passed a bond.
Taxes in Aurora are going up by an average of 4% as the city starts collecting for its $7.1 million bond that was passed by voters in 2022 and replaces an expiring $4.8 million bond.
Bill Poehler covers Marion and Polk County for the Statesman Journal. Contact him at bpoehler@StatesmanJournal.com