Learning in Lake Oswego unpacks a topic on our community's mind: school funding and taxes. Where does the funding for our schools come from? How do state and local taxes shape Lake Oswego’s education system? And what’s really behind those line items on your property tax bill? Whether you’re new to Oregon or have been part of Lake Oswego for years, this episode will clear up key details and offer fresh insights into how our schools are funded. Grab your property tax statement and follow along as our Superintendent and Assistant Superintendent of Business Services discuss:
Tune in to learn more about how your tax dollars support the future of Lake Oswego’s students!
Dr. Jennifer Schiele, Superintendent, LOSD
Mary Kay Larson, Executive Director of Communications, LOSD
Stuart Ketzler, Assistant Superintendent of Business Services, LOSD
Clackamas County Property Tax Statements
Educational Excellence Awards: Celebrating Service Above Self
MICHELLE ODELL:: [00:00:00] Welcome to Learning in Lake Oswego, a podcast providing educational insights for an engaged community. Lake Oswego School District Superintendent Dr. Jennifer Schiele will discuss what's important to our learning community. She'll be joined by experts examining various topics, answering important questions, and sharing upcoming events and activities you won't want to miss.
And now, it's your host.
MARY KAY LARSON:: Welcome to another episode of Learning in Lake Oswego, the podcast where we explore the policies, programs, and people that make the Lake Oswego School District such a special place. I love that alliteration. I'm your host, Mary Kay Larson, joined by our superintendent, Dr. Jennifer Schiele, and our assistant superintendent of business services, Stuart Ketzler.
Today, we're tackling a topic often on residents minds, school [00:01:00] funding and taxes. Where does funding for our schools come from? How do state and local taxes impact Lake Oswego? And what's the story behind those line items on our property tax bill? Whether you're new to Oregon or have lived in Lake Oswego for decades, this episode will help clarify some key details and provide fresh insights for our engaged community.
Let's get started, Jen.
DR JENNIFER SCHIELE:: Thanks Mary Kay. And welcome back to the podcast, Stuart. Last year we covered Education Funding 101, one of our most popular episodes. So we're really glad to have you back to really help us dig deeper into this. critical topic that has been coming up quite a bit lately.
STUART KETZLER:: Well, thank you, Jen.
Excited to be here and happy to continue the conversation.
Speaker 3: Great. Well, before we get into the details of school taxes, let's start with an overview. Stuart, can you please explain how taxes are levied for Oregonians?
Speaker 4: In Oregon, property taxes are based on a property's assessed value, or AV, rather [00:02:00] than its market value MV or, or RMV, and that distinction significantly impacts how much homeowners pay.
Assessed value is the value used to calculate property taxes in Oregon. It's never more than market value and is usually significant lower. because state law limits how much AV can grow each year. For example, last year, LOSD's total AV was half of its RMV, meaning that for, say every 500, 000 of a homeown, home, average home's AV, it had a real market value of a million.
And that's just a broad whack. Under Measure 50, passed in 1997, a property's maximum assessed value was set at 90 percent of its 1995 96 real market value. And after that, MAV can increase by no more than 3 percent annually unless major changes occur to the property, like renovations or new construction.
The taxable assessed [00:03:00] value is whichever is lower between the MAV and the current real market value, or RMV. So, market value is theoretically representative of what a property would sell for in the current market, and it fluctuates based on housing market trends and is reassessed annually by the county.
However, even if a property's market value rises significantly, taxes won't spike because the 3 percent annual cap applies to the maximum assessed value or AV.
Speaker 3: Thanks Stuart for laying that groundwork. Now, I think people are probably going to recognize this podcast is going to be complex and there's a lot of words and vocabulary that might sound new to you.
And I think the best thing to do is actually go get your document that shows your own property taxes so that you can follow along with these words. If you don't have your tax statement, you actually can get them from the county assessor online. So if you go online, you can actually type in your address, and I just did this yesterday so I know it works, and actually get [00:04:00] your tax statement and then follow along.
So if you need to rewind and start all over, go ahead and do that. Get your tax statement and then start again. Can you now, Stuart, explain exactly how property taxes are calculated in Oregon?
Speaker 4: Yes so property taxes are based on the taxable assessed value the AV, and the local tax rate, but with a cap based on real market value.
And here's how it works. So taxable assessed value, or AV is always lower of, of either that number or real market value. And the tax rate. This is the combination of all of the various taxing jurisdictions that apply to a single parcel of real property. It's composed of the schools, community colleges, college, fire departments, and city and county services, and each of those governmental units have a different tax rate, and that determines the amount of taxes that are owed for a specific parcel of [00:05:00] property.
Ultimately, Property tax are expressed on a per thousand basis of the taxable assessed value and are classified into one of the following three distinct categories. The first is education, which has a 5 per RMV cap under Measure 5 passed in 1990. The next is general government, which has a 10 per RMV under Measure 5.
And then property taxes excluded from the limitation is the third category. And that's primarily debt levies under voter approved bond measures. And those are the three broad areas that you'll see. If you look at the tax statement that that Jen was just referring to that is available on the county websites, and I would note that Clackamas County, I believe, has a very accessible website under the Clackamas County Assessor's Office with with the tool that Jen was referring to.
Now as a specific example of this, let's imagine a home with a real market value of 500, 000 and an [00:06:00] assessed value, or AV, of 300, 000. Since the AV is lower, taxes are calculated based on the 300, 000 assessed value. And for this, we'll assume that this particular property has a Total property tax rate of $15 per thousand.
So the annual property tax, for that parcel would be $4,500, 4,500, which is 300,000 times the $15 per thousand, which comes out to 1.5% when you, when you express it in the very precise terms.
Speaker 3: So you mentioned a few times measure five and 50. Can you explain a little bit about what role they play in this calculation?
Speaker 4: Yes, so these are voter approved measures that are foundational to Oregon's property tax system and they both set Oregon apart from virtually other state in terms of how property taxes work here on, on a somewhat unique basis compared to, to any other [00:07:00] state. So Measure 5, which was passed in 1990, caps property taxes at 10 per 1, 000 of RMB for general government services.
and five dollars per thousand for education services. And measure 50, which was passed in 1997, introduced the assessed value system and capped its annual growth of assessed value at three percent per year. This provides predictability for homeowners while preventing large tax increases without voter approval.
even when market values soar. However, this system also means long term homeowners often pay property taxes on a value far below their home's current market value, while newer homes may pay more.
Speaker 3: Got it. So that, that's very helpful, especially for people who are new to Oregon and may be unfamiliar with Oregon's property tax system.
So let's now shift to school funding, which can get pretty complex. Stuart, what are those key sources of funding for the [00:08:00] Lake Oswego School District, our district?
Speaker 4: So, great question. And funding for Lake Oswego School District primarily comes from three sources, each with specific purposes and distinct sources.
So, the first one is state funding, and this is our largest portion of, of the resources we receive, accounting for roughly 85 percent of our, of our general operating budget. And this includes property taxes levied at the local level for education under each school district's permanent tax rate. And for Lake Oswego School District, that's reflected as S C H L K Oswego on property tax bills within L O S D.
And this is then greatly supplemented by an allocation from the state's general fund that is then allocated across Oregon public schools on essentially a per pupil basis.
Speaker 3: So right there, when I'm looking at this tax bill and it says S C H L K Oswego, and it has a number next to it, Are you saying that that number [00:09:00] doesn't just come directly to the school district?
Speaker 4: It does come to the district, but it gets accounted for by the state under a statewide formula that redistributes property taxes and then the allocation from the state general fund across schools on a per pupil basis. There's an equalization formula that takes place at the state level. And then the the second significant category of of our resources are local option levy taxes, what we commonly refer to as our learning levy.
And these are approved by local voters and fund additional programs and staffing for operational purposes. And then the third category are bond taxes. And these are used solely for paying the debt service on bonds approved by voters and issued to fund capital projects like building replacements and renovations.
Speaker 3: Okay, so if we go back to the one that is labeled S C H L K Oswego, that property tax, what does that [00:10:00] essentially mean then?
Speaker 4: So that specific line item represents the education tax under the Measures 5 and 50. It's our, the Lake Oswego School District's permanent rate and Measure 5 again, it caps property taxes for education at 5 per thousand of real market value.
And then Measure 5 further limited that property tax growth and established the assessed value system. So the funds collected under the school education taxes get accounted for in the state school fund which the legislature allocates to school districts using a weighted formula based primarily on enrollment.
There are certain weighting factors for example, the largest one is students on IEPs, but there are also weights for students that are learning English as first time learners, students in poverty, and a few other more minor classifications.
Speaker 3: Okay, so even though Lake Oswego residents pay [00:11:00] into this fund, LSD doesn't receive a dollar for dollar return.
Is that correct?
Speaker 4: Yes, that is correct. Taking into account state income taxes, Lake Oswego contributes more to the state school fund than we receive per student. The state system is designed to promote equity statewide, but it means high contributing districts like ours see less of a direct return.
Speaker 3: That's a crucial point, I think, that it's really important for people to understand about their taxes.
So now let's move to the second line item, which says S C H L K Oswego L O C O P T.
Speaker 4: Yes.
Speaker 3: So what what does that one mean?
Speaker 4: Okay, so that's our local option levy or learning levy, and it's a vital funding source for Lake Oswego School District. This is a voter approved property tax renewed every five years, and all funds stay local to support Lake Oswego schools.
And this levy allows us to provide programs and [00:12:00] staff that go beyond what the state school fund covers, things like smaller class sizes, expanded electives, and additional student supports.
Speaker 3: Yeah, so that helps maintain that high quality education that our community values.
Speaker 4: Exactly. It bridges the gap between state funding and the resources our students need to thrive.
Speaker 3: Can we set that at anything? Can we go as high as we want?
Speaker 4: No, there are limits under state law in terms of how much the local option tax can raise locally. And there are three limits in, in state law. One is based on a percentage of, of our overall state school fund allocation. The second is based on a per student basis, essentially.
And then the third one is the amount that actually could be raised between the gap that is available between assessed value and real market value. And fortunately in Lake Oswego, that's a fairly large gap.
Speaker 3: Finally, let's talk about S [00:13:00] C H L K, Oswego bond. When you see that one on your tax form, what does that mean?
Speaker 4: So that line item represents taxes from voter approved bond measures and The proceeds from our bond measures are restricted to capital outlays like building new schools, making safety improvements, modernizing facilities, or paying for durable equipment. And so that specific line item is raising taxes to pay the debt service on those bonds that were issued to generate those proceeds.
For example, our 2021 bond is funding projects like replacement of two schools, seismic upgrades, HVAC improvements, and renovations across the district.
Speaker 3: Got it. Okay. So those three line items that we just mentioned, one of them goes to the state, two of them come directly to us, one of them for buildings and one of them for actual education.
And then there's one more. I was actually at a neighborhood meeting. And somebody said, well, I [00:14:00] have a fourth one on my tax form and it's, it says city LK Oswego inside SCH. And as all those other ones said, SCH kind of stands for schools. And so just to clarify everyone, what does that one mean and what is that funding?
Speaker 4: So that one is an interesting one. It is a city. property tax that is being assessed. So you'll note that it's in the general government function, and it's not for school funding. All property taxes under that tax go to the city of Lake Oswego and not to Lake Oswego School District. There was a very short period from fiscal years 1998 through 2000.
where Lake Oswego School District received funds from the city for some of our extracurricular programs from the incremental property tax revenues under this specific tax rate. And the city received that under their permanent tax rate. But that [00:15:00] support ended when the Lake Oswego School District voters approved the district's first learning levy in May, 2000.
Speaker 3: Okay, thanks for clearing that up. I know that was someone's question at one of the neighborhoods. So as we wrap all this up, what's the key takeaway for our listeners?
Speaker 4: Well, I think the key takeaway is that our funding, Lake Oswego School District funding, comes from multiple sources. each with a specific purpose.
The education tax provides a base, but the local option levy and bonds are essential for maintaining the quality of education and infrastructure our community expects. It all reflects the incredible support of our Lake Oswego community.
Speaker 3: Yeah, well said. I can't imagine a better school community than Lake Oswego for supporting education.
So thank you to all our listeners out there for always voting yes for our students, and also thanks, Stuart, for breaking this down. And explaining it to us all so well. And so thank you listeners. It's totally fine to [00:16:00] rewind and grab that tax bill and kind of follow along because I think it's, it makes it a lot more clear.
And I know we've gotten some questions about this.
Speaker 4: Thanks so much for having me today.
Speaker 3: Thank you, Stuart.
Speaker 2: I think it's very fitting that he is our first repeat guest on this podcast. It's just so indicative of all that he does for our schools and how important he is for our community. The information has been incredibly helpful.
Now let's shift our focus to how our community can engage with our schools. Jaren, where will you be in the coming weeks that our families and
Speaker 3: residents can join
Speaker 2: you?
Speaker 3: Absolutely. Thanks Mary Kay. Mark your calendars, everyone. The Lake Oswego Rotary Club Educational Excellence Award Ceremony is happening soon.
We're so excited about it. It's March 11, 2025 at the Lakewood Center for the Arts. And this annual event It celebrates educators, students, and residents who go above and beyond to foster educational excellence in Lake Oswego. And I encourage everyone in the community to attend, it's a [00:17:00] fantastic event, and it's so inspiring to hear the stories of these nominees and recipients.
So, please join me on March 11th and celebrate these fantastic students, educators, and residents. I agree. Rotary's
Speaker 2: Educational Excellence Awards are so inspiring. And just to tie it back into our topic of today's show, it's such a great reminder of the incredible ways our taxes support students and schools and go to the betterment of our entire community.
This wraps up our show today. It definitely answers a common question that we get. So you asked and we answered. If you have any other questions or topics that you want us to address in our podcast, please reach out. We love to provide clarity and help our engaged community come along with
Speaker 3: us. Perfect.
Thanks everyone for listening and until next time, keep exploring and stay engaged. Class dismissed.
Speaker: We hope you found this episode informative and helpful. While our discussions are general, we understand each family's [00:18:00] experience is unique. If you have specific questions about your child, please contact your school principal.
To learn more about the topics we discussed, ask a question, or share ideas for future episodes, please visit LOSDSchools. org. And remember to like and follow us wherever you get your podcasts. Thank you for engaging with Learning in Lake Oswego. We appreciate your support and look forward to having you with us for our next episode.