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County economist warns downtown office value declines are squeezing PPS levy revenue
Summary
Multnomah County economist Jeff Renfro told the Portland school board that downtown office value declines and Oregon property-tax 'compression' have reduced growth in assessed value, compressing local option levy collections and leaving PPS about $5 million short of earlier budget assumptions this year.
A Multnomah County economist told Portland Public Schools board members on Nov. 18 that declines in downtown office market values have reduced the district’s assessed-value growth and increased 'compression,' lowering collections from the local option levy.
Jeff Renfro, the county economist, explained the mechanics: Oregon property-tax law measures multiple values (real market value and a Measure 50-based maximum assessed value), and assessed value is the lower of the two. When real market value for some commercial properties falls below that maximum-assessed line, assessed value begins to fall with market value and the taxing system also applies compression caps that reduce what property owners pay on levies. "Local option levies get compressed first," Renfro said, describing how compression reduces collections for discretionary levies.
Renfro showed county data indicating significant drops in real market values for downtown high‑rise office buildings since 2019 and said several of the highest-value downtown properties have fallen substantially, with many now reassessed at lower values. "That is a downtown core issue that is holding back the property tax system as a whole," Renfro said.
School staff told the board the roll brought in this year left PPS "just under $5,000,000 short in terms of collections" compared with prior budget assumptions; staff said that shortfall is already being reflected in budget work and contributes to the district’s planning for next year’s gap.
Board members asked whether PPS has reached statutory levy limits and whether the district could raise a future levy to recover revenue. Staff said they will return with precise legal guidance; the chief of staff said the board would follow up with the correct statutory numbers. Renfro said county forecasts anticipate assessed-value growth returning toward a roughly 3% floor by FY2027 but not a rapid recovery absent sustained new development.
The discussion framed the next levy campaign: the current local option levy expires in 2028 and the board will consider timing and structure in the context of compressed collections and uncertain downtown market recovery.
