The Senate Committee on Finance and Revenue opened an informational presentation on Oregons maximum assessed value (MAV) system and then held a public hearing on Senate Bill 712, which would require a propertys MAV to increase by 3% each year.

The Legislative Revenue Office (LRO) told the committee that MAV was established after Measures 47 and 50 in the 1990s and acts as a taxable-value cap that generally grows at 3% per year. "The maximum assessed value grows by 3% or 0% per year, but usually 3% under most conditions," a Legislative Revenue Office presenter said, explaining how MAV, assessed value (AV) and real market value (RMV) interact.

Why it matters: witnesses said the current MAV rules can create revenue volatility for local governments and horizontal inequities among neighboring properties. Senate Bill 712 would keep MAV growing by 3% even when RMV falls below MAV, which backers say prevents a long lag in revenue recovery after recessions; opponents said that change would raise taxes for fixed-income residents and vulnerable groups.

LROs presentation summarized three concepts required to understand Oregon property taxation: RMV (what a willing buyer would pay), MAV (a taxable-value cap set in the Measure 50 era and generally limited to 3% annual growth), and AV (the value to which tax rates are applied; AV is the lower of RMV and MAV). The presenter noted the MAV for new property is initially set using a changed property ratio (CPR), the countys average MAV divided by its average RMV for a property class, which ranges between 0 and 1.

Committee members and witnesses used a recession example to show how MAV and AV interact: when RMV falls below MAV during a downturn, AV can track RMV downward; when the market recovers, AV may resume tracking MAV. The LRO presenter cautioned the size of the effect depends on the depth and duration of a downturn.

Senator Chris Gorsek (Sen. Dist. 25), sponsor of SB 712, described the bill as a way to "patch the leak" in local revenue streams. "When real market values fall, tax revenue drains away. But when RMV rises again, the bucket doesn't refill fast enough because the maximum assessed value is capped at a rate that's often lower than inflation," Gorsek told the committee, urging support so local governments can better fund schools, public safety and infrastructure.

Seth Reeser, finance director for the city of Wood Village, said the 2008 housing crash exposed the issue across many Oregon counties and showed up on city-level maps as large numbers of properties experiencing 0% MAV growth for years. Reeser said the consequence can be permanent revenue losses for properties created during downturns and cited east Multnomah County examples where some newer properties are taxed on a far higher percentage of value than newer properties in gentrified parts of Portland.

Jenna Jones, representing the League of Oregon Cities, testified in support and said statutory changes are a partial fix while the League continues to pursue broader constitutional reform. "Having a bill where we're able to recover with the market slightly, not to the full extent of real market value, is one of those things that would change some of the nebulous nature of our property tax system," Jones said.

Opponents included Laurie Kimmel, who said SB 712 would increase pressure on people living on fixed incomes. "It puts a strain, a severe strain on disabled vets and surviving spouses," Kimmel testified, adding concern that the change would hit residents who rely on small, fixed monthly incomes.

Other public witnesses described practical local impacts and equity concerns. Tim Cowan and others spoke about the potential consequences for older residents and people on fixed incomes. Committee members asked whether other states use similar caps and how local-level maps could illustrate the bills effect for individual properties; LRO staff said some states have property-tax limits but did not provide a single-state match on the record and offered to follow up.

No formal votes were taken; the committee opened the public hearing, received testimony for and against SB 712, and closed the hearing. Chair Mark Meek announced the committee would carry over a separate work session (on a different bill) to March 31 and that SB 712 testimony and OLIS materials were available in the record.

The committee did not adopt statutory language during the hearing; testimony emphasized three trade-offs: increased MAV growth smooths local revenue recovery after downturns but could raise tax bills when markets rebound, and the distributional effects vary by neighborhood and county depending on historical CPR and development timing.

Provenance: first related remarks in the transcript are identified where the chair opened the informational session and called for the LRO presentation; the committee later opened the public hearing on SB 712 and received testimony from Senator Chris Gorsek, municipal finance staff and the League of Oregon Cities.