Local Tax Catastrophe: HP’s Big Win Hangs Benton County Out to Dry
On the Ides of May, Benton County was rocked by financial catastrophe. The Oregon Tax Court, ruling in favor of Hewlett Packard’s tax appeal, agreed that their property has been overvalued since 2008, effectively reducing the value of HP’s campus by $117 million, and requiring the county to pay a $9.5 million settlement. All 53 tax districts within Benton County now owe a portion of the historic settlement to the county’s largest taxpayer, with Corvallis’ share estimated to be $1.8 million.
That’s merely the beginning, however, as the new valuation of the property means HP will pay $600,000 less in property taxes in the 2013-14 fiscal year, with similar losses to local revenue in future budgets as well. While a decision on whether to appeal the decision is still under consideration, Corvallis and Benton County are preparing drastic measures to deal with the shortfall, including a freeze on discretionary spending, using accrued surplus funds, and interfund loans. Libraries, rural fire districts, two community colleges and seven school districts are also affected, with Corvallis School District owing $2.7 million toward the refund, although $1.7 million of that is operating funds, which the state will reimburse.
While details are still being hashed out, there’s no doubt this will have a profound impact on Corvallis and Benton County for the foreseeable future.