Piper Sandler adviser: local option levy ‘unpredictable, difficult to explain and inequitable’ but may be Astoria SD 1’s only option

Lauren McMillan of Piper Sandler told the Astoria SD 1 board that a local option levy is one of the few tools districts have to raise operating dollars outside the state school fund, but she warned it is ‘‘a really complicated topic’’ and that the revenue is ‘‘unpredictable, difficult to explain, and inequitable.’’

McMillan explained Oregon’s two-part property‑tax regime, pointing to Measure 5 (1990) and Measure 50 (1997) as the origins of the state’s compression rules. She described how local options are applied against the gap between assessed value and real market value on each parcel, and noted the practical need to levy by rate per $1,000 rather than a fixed dollar amount because of how compression affects collections.

Why it matters: Board members are facing budget pressures and potential program cuts; a local option could supply additional operating revenue but would require voter approval and careful outreach. McMillan said Astoria has recently qualified for an equalization grant—about 10% in prior years—and that the district’s theoretical maximum collection under the three-pronged statutory test was about $5,000,000 for fiscal 2026.

McMillan walked the board through the technical limits: the applicable cap is the lesser of (a) theoretical tax capacity across the tax base, (b) a per‑ADMW limit that grows roughly 3% per year, and (c) a percentage-of-state-resources threshold. She cited a per‑ADMW figure of $2,459.75 for fiscal 2026 and recommended that accurate revenue estimates require parcel‑level data from the county assessor.

Board members pressed on timing, equity and outreach. One trustee asked whether Seaside’s existing local option would affect Astoria; McMillan said local options are confined to district boundaries and do not ‘‘compete’’ across separate school districts. A board member emphasized voter outreach and polling, noting survey work often costs about $10,000–$15,000 and can help target messaging and test a proposal’s likelihood of passing.

The trustees discussed election timing, with members pointing out that May and November are the most practical months for a local option because other dates may trigger a double‑majority rule. One board member observed that November 2026 will be a congressional election and likely to produce higher turnout, but McMillan stressed the standard advice: May or November are the typical options.

Trustees also raised equity concerns: residential parcels can have large assessed-to-market gaps and thus may shoulder more of a levy, while some commercial or utility properties may be close to market value and contribute less. Board members worried about passing costs on to renters when nonresident owners hold property in the district.

No formal motion or vote was taken. Board members asked staff to collect parcel-level estimates, confirm election deadlines and provide more detailed cost and outreach projections before deciding whether to place a local option before voters.

"For residential taxpayers, you could give them an estimate since they're likely to pay the full thing," one committee member said during the discussion. McMillan concluded that while local options can yield meaningful revenue, they are hard to budget for and carry distributional trade-offs.

The board agreed to gather more information and revisit the question after budget work and additional analysis.