Counties, assessors and local governments urge support for HB 3,518 to boost CAFA funding

Supporters from counties, assessor and tax-collector associations, cities and special districts testified March 11 in a lengthy public hearing that House Bill 3,518 would stabilize funding for county Assessment and Taxation (A&T) offices and return omitted property and contested value back to local taxing districts.

“This bill revitalizes CAFA’s capacity to fund A&T across the state by taking the old funding mechanisms and indexing them to lost inflation,” Justin Lowe, testifying for the Association of Oregon Counties, told the committee. Lowe identified CAFA (the County Assessment Function Funding Assistance account) as a statewide program that produces uniformity and accuracy in property assessment and helps counties distribute property-tax revenue to cities, schools and special districts.

John Schafer, Umatilla County commissioner and president of the Association of Oregon Counties, said many counties are operating with delayed reappraisals and understaffed assessor offices. “We have properties that have not been appraised in 30 years,” Schafer said, and noted that some counties cannot timely add new construction to the tax roll as required by statute.

County assessors and tax collectors gave detailed estimates of potential returns on investment if CAFA funding were restored and indexed. Department of Revenue and county presenters described the bill’s revenue mechanics: it would (1) increase the document recording fee (currently $9) roughly to $18 (the bill text accounts for small other allocations and therefore shows $10–$19 in some places) and index it to inflation; (2) discontinue retaining delinquent-interest revenue for CAFA (returning that interest to taxing districts); (3) replace retained delinquent-interest funding with a 0.3% diversion of property-tax distributions to CAFA; and (4) appropriate $10,000,000 in general-fund support for the 2025–27 biennium to the Department of Revenue for A&T.

Staff estimated the revenue impact as roughly $4–5 million per year from increased recording fees, roughly $14 million returned to districts from delinquent interest once retention ends, and about $26 million per year in gross property-tax diversion from the 0.3% distribution; the net cost to taxing districts was estimated at about $12.4 million per year (approximately $6.3 million K–12, $1.7 million cities, $2.6 million counties, $1.2 million special districts and $0.33 million community colleges). Presenters said CAFA funding at the proposed level could restore A&T funding to roughly 25–30% of statewide A&T needs (the program had been about 36% at peak funding and had declined to near 12% in recent years).

Multiple county officials testified with local estimates of revenue that could be recovered through reappraisal, omitted-value capture and defense of appeals. Clackamas County’s assessor estimated as much as $18 million in additional capture from omitted property in a full implementation scenario; Lane County estimated $39.6 million in Measure 50 exception-value capture in the 2023–24 certified roll as an example of the revenue that timely appraisal work can produce; other counties cited multi-million-dollar figures tied to reappraisal and appeals defense.

Some stakeholders raised concerns. Hasina Wittenberg of the Special Districts Association of Oregon said special districts could not support the bill in its current form without additional sideboards and performance metrics, and requested an explicit needs assessment and guardrails to ensure funds flow to counties with the greatest demonstrable need. Matt Markey, representing Oregon Realtors and mortgage industry groups, said increasing and indexing recording fees is one of many recording-related fees and asked for a broader stakeholder analysis of how cumulative fee changes affect the public.

League of Oregon Cities representatives did not take a final position but said they supported increasing the recording fee and state general-fund participation; they asked for more data to confirm the statewide return on investment for cities and indicated they would review the record further.

Supporters emphasized that CAFA funding is intended to increase collections and equity statewide—more funds for assessment and tax operations, they argued, should produce a net return to taxing districts through recovered omitted value, fewer measure-driven compression losses, and more timely additions of new construction to the roll.

The committee heard roughly 20–40 in-person and remote testimonies during the hearing. The chair limited public testimony to two minutes per speaker to accommodate the large sign-up list. No committee votes were taken during the public hearing; the chair closed the public hearing at the end of the scheduled testimony window.

If enacted as proposed, supporters contend HB 3,518 would restore CAFA toward its original purchasing power, provide a stable funding stream indexed to future growth, and supply a state general-fund supplement to help counties with greatest need. Opponents and some stakeholders asked for amendments to add performance metrics and protections for smaller taxing districts.