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Special District White Paper <br /> Constitutional Limitations <br /> 1. The constitutional maximum general government tax rate limit is a legal limit on the total taxes <br /> that may be levied on any individual property by all overlapping general government taxing <br /> jurisdictions, including cities, counties and special districts. <br /> 2. The Constitution also requires the voters for each taxing district approve an individual <br /> permanent property tax rate limit for the district before it may levy property taxes for operations. <br /> This approved permanent rate limit becomes the specific legal limit for the individual district. <br /> Principal Act Limitations <br /> 3. A special district's principal Act usually, but not always, specifies an absolute limitation on the <br /> amount of property tax revenue that may be collected annually by that type of district. <br /> Regardless of the approved rate limit, the individual district may not collect an amount greater <br /> than the amount specifically allowed in the district's principal Act. <br /> Practical Limitations <br /> 4. Recognition of property value fluctuations and allowance of property value headroom beneath <br /> real market value limitations to accommodate volatility in local property values is a wise policy <br /> and a practical limitation. <br /> 5. Allowing additional headroom for special levies by any local general government jurisdiction is <br /> also good policy. This allows voters to approve local option levies for special purposes without <br /> triggering compression of property tax revenue. <br /> 6. Property tax collections are always somewhat less than the amount levied. Currently in Eugene - <br /> Springfield, about 93% of levied taxes are actually received by the taxing jurisdiction. This is due <br /> to early payment discounts (up to 3 %), delinquent payments and tax compression. <br /> Political Limitations <br /> 7. The voters under the constitutional double majority rule must approve all new property tax <br /> proposals put forward by a special district. <br /> Constitutional General Government Tax Rate Limit <br /> A significant part of 1990's Measure 5 is the total maximum general government tax rate limit to <br /> which any property may be subject. Subsequent passage of Measure 50 in 1997 specified that <br /> property taxes are to be calculated on a property's below- market -value assessed value. While <br /> property has always been taxed based on an assessed value, prior to M50 assessed value equaled <br /> real market value. <br /> Special districts are subject to these constitutional limitations. A special district's property tax levies <br /> are considered to be general govemment taxes and are included when calculating whether the total <br /> property taxes levied by all general govemment jurisdictions on a particular property exceed the <br /> constitutionally permitted maximum. If the total general govemment operating tax rate exceeds that <br /> cap, property tax compression will occur and revenue received by each taxing district will be <br /> proportionately reduced. Article XI, Section 11 b of the Oregon Constitution sets the maximum total <br /> property taxes that may be levied and collected annually by all general govemments at $10 per <br /> $1000 real market value (RMV). Local option levies are permitted and are inside the constitutional <br /> limit. Levies for repayment of voter - approved general obligation bonds are outside the constitutional <br /> limit. <br /> Special Districts Paper - Final 11- 8- 01.doc Page 12 of 41 <br /> City Council Agenda page 36 <br />