Prior to 1991:

• Taxes were based on Real Market Value (RMV), which is the estimate of what a property could sell for.
• Taxing Districts could raise their revenue by 6% annually. If they wanted more than 6%, they needed voter approval.

1991: Measure 5 (M5):

• M5 still based the amount of taxes on RMV. However, Measure 5 created a cap on the amount of monies taxing districts could receive if they passed a certain limit.
• The categories were broken down into Government and Education.
• The initial fiscal year of 1991-1992 placed a limit of $15 on Education and $10 on Government.
• In 1995-1996 the cap had ratcheted down to $5 on Education while Government stayed at $10.
• If a property reaches its limit on either category, taxes above that limit are compressed off the tax roll.
• Education experiences far more monies compressed off the tax roll than government.
• Measure 5 still is in effect today.

1996/1997 Measure 47 (M47) and Measure 50 (M50):

• In 1996: M47 was voted into law. However, major flaws existed in the law and in 1997 a revised form M50 was voted into the Oregon Constitution.
• Prior to M50, taxes were based on RMV. M50 created a 2^nd value on all property called the Maximum Assess Value (MAV)
• If a property existed in 1997, the MAV was established by taking the 1995 RMV – 10%.
• Once MAV is set on a property, it grows by 3% annually.
• The 3% rule has a pro and a con: When the real estate market is robust, the assessed is limited to the 3% growth. However, when the real estate market collapses, the RMV plummets but the MAV still grows. MAV is set, the only way for the tax burden decrease on property is if the RMV falls below the MAV. Please refer to graph below: