Local Option

The 1999 Oregon Legislature opened the door for Oregon school districts to seek voter approval of local option levies.

The local option levy is based on a taxation “gap” that exists between the constitutional limits imposed by property tax limitation measures approved by voters in the early 1990s and the constitutionally fixed school levy rate of $5 per $1,000 of a property’s real market value. Under this funding source, school districts may ask for voter approval of a local option levy at the March, May, September or November election.

All elections, except the November election in even-numbered years, must meet the double majority requirement of at least a 50 percent turnout of registered voters with more than 50 percent of the votes cast in favor of the measure.

Districts can use local option funds for operating purposes or for capital projects. The levy may be for one to five years for operating purposes or up to 10 years for a capital project levy.

A local option levy has the following statutory restrictions: (ORS 280.040 through 280.090)

• Levies may be a fixed dollar amount or rate based.
  For example:
  • $250,000 per year, or
  • $0.75 per $1,000 of assessed value
• Over collections on rate based levies are carried over to the next fiscal year.
• Capital project levies for more than five years must be voted on separately from all other local option levies.
• The amount a district can collect is the lesser of:
  • The gap amount.
  • 15 percent of State School Fund (SSF) formula revenue.
  • $750 per Average Daily Membership weighted (ADMw*).
• Over collections are subtracted from the district’s SSF allocation.

The taxation gap is calculated on a property-by-property basis. That means that a particular property that has an assessed value equal to the property’s real market value would have no gap taxes. Conversely a property that has a difference (or gap) between the assessed value and real market value would be assessed the additional tax (if a local option were approved by voters).

The challenge to taxing districts is explaining to voters that not all property owners will pay the increased taxes and some property owners will pay more than others.

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*Weighted average daily membership (ADMw) includes additional distribution formula weightings for disabled, poverty, English as a second language, foster home, delinquent, and pregnant and parenting students. Weightings also reflect students in small, remote schools.

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