Portland General Electric, by far the county’s largest tax-payer, overpaid its 2023-24 taxes by $1.8 million, and now local districts are having to provide refunds. Across the state the utility company’s tax correction is affecting tax districts, but as PGE is by far the largest tax payer in Jefferson County, local tax districts are hit harder.
The funding hit is causing consternation and mild panic, especially at some of the smaller districts, certainly at the cash-strapped Madras Aquatic Center Recreation District. Executive Director Courtney Snead sent out a notice to board members and local media July 19 saying the situation “will result in significant program reductions and layoffs effective August 31.”
The mistake was due to “an apportionment error: Cost reporting for the Round Butte Hydro Plant,” according to a July 17 report from Jefferson County Assessor Ray Soliz that was distributed to impacted local taxing districts. The mistake was made through PGE reporting and state assessment and not a local assessment. The inaccuracy was noted and corrected by the Oregon Department of Revenue, who does tax assessments for large entities like utility companies.
PGE holds about 17% of the county’s total tax valuation. The mistake led to them paying 53.2% more taxes than they were required to, and thus the county taxing districts have to refund 53.2% of the revenue received from the county’s largest taxpayer.
Following the correction, the total assessed value for PGE went from $241,722,000 to $113,165,000, a reduction of $128,557,000 in assessed value for the impacted Jefferson County districts. The reduction has reduced the PGE tax burden for the 2023-24 tax year by $1.839 million.
“I saw the discrepancy back at the end of last year and passed it on to the state and mentioned it to the commissioners in January,” said Soliz.
However, the special taxing districts were unaware of the potential for a tax discrepancy until Soliz sent a letter July 17.
“As a county we have reserve funds and budgeted for a smaller increase than was projected,” said Jeff Rasmussen, Jefferson County administrator. “If you’ve got one big payday, you have to have higher reserves, because there’s only one source of income. If something happens, something like this, it has a bigger impact.”
PGE had already paid the taxes on the inflated tax value. Therefore, they are due a tax refund from the local districts — most of which have already spent the funds and have budgeted for the same amount for this upcoming year.
The refund comes from the county’s unsegregated tax fund, which distributes property taxes to the special districts each month. It’s empty currently, and tax funds are slow this time of year, with big payments coming in October and November. Regulations allow the refund to be issued as the fund has money. This means that instead of the normal tax payments the districts could accept in the fall, they’ll receive what’s left after the $1.8 million refund is issued.
“We were already looking at a $65,000 hole in next year’s budget that I was looking for grants to fill,” said Courtney Snead, executive director of the Madras Aquatic Center Recreation District. “We will be holding a meeting next Wednesday (July 24) to discuss options.”
Snead said such drastic potential as closing the pool during the school year will likely be on the table. She also added that if the measure on the May ballot had passed, they would have been able to “weather this storm.”
The MACRD has three tax-revenue funding streams: the initial operating levy, an additional operation levy established in 2023, and the construction bond. PGE’s exaggerated tax payment will mandate a $156,351 refund for them.
The Jefferson County Library will have to refund $55,910 and roll back its revenue projection for this next year.
“The way I see it, I have three options,” said Library Director Jane Ellen Innes. “We can either reduce staff, reduce hours, or reduce programs.”
Jefferson County 509J School District takes the brunt of the payback total, though. They are facing a $839,263 refund to PGE on $1,578,042 in tax ‘23-24 tax revenue for operations from the state and the 2013 construction bond.
“I’m thankful we have had a very fiscally responsible board, and we have reserves to cover this cost,” said 509J Superintendent Jay Mathisen. “I feel for the smaller districts that are having to handle this big refund. It was a big shock when I learned of it.”
County government takes a reduction from $862,029 to $403,569, requiring a $458,460 refund. The county’s jail operating allocation from PGE’s taxes went from $408,510 to $191,249, a $217,261 reduction.
Revenue adjustments following the refund of the PGE overpay. Total reduction and refund required in parenthesis:
Total Tax Code 90 imposed: $3,458,003 to $1,618,910 ($1,839,094)
Jefferson County School District 509J operations — $1,017,755 to $476,474 — ($541,281)
Jefferson County School District 509J bond — $560,287 to $262,305 ($297,982)
Jefferson County government — $862,029 to $403,569 ($458,460)
Jefferson County jail — $408,510 to $191,249 ($217,261)
Jefferson County 509J bond 2013 — 560,287 to $262,305 ($297,982)
MAC Bond 2005 — $136,863 to $64,074 ($72,789)
MAC levy 2023 — $96,689 to $45,266 ($51,423)
MAC levy — $60,430 to $28,291 ($32,139)
Jefferson County Library — $105,125 to $49,215 ($55,910)
COCC levy — $137,650 to $64,443 ($73,207)
COCC bond — $19,434 to $9,098 ($10,336)
Jefferson County ESD — $105,125 to $49,215 ($55,910)
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