Oregon’s Measure 63—which would eliminate the need for building permits for projects less than $35,000—would carry a cost to local and state governments. And lucky for you, I’m going to tell you what it is.
First, official fiscal estimate from Oregon’s Department of Revenue is here. But it’s only 4 sentences long, a monument to Hemingway-esque terseness that does not illuminate very much. Luckily for us, however, the Revenue Department also produces an explanation of the fiscal estimate.
Even the explanation is short enough to include the entire thing here:
Through a reduction in the number of building permits, this measure will reduce local government revenue between $4 million and $8 million annually and will depend on the level of construction activity and the degree to which inspections are still requested by residential property owners. The measure will also reduce local government spending by a similar amount, as fewer inspections for minor improvements will be required.
Similarly, because the state receives a surcharge of 12% on certain local permit revenue, this measure will reduce state government revenues between $450,000 and $750,000 per year.
County assessors use permit information to identify taxable property. If these permits are no longer issued this property will be more difficult to identify and assess. As a result there may be some loss of property tax revenue for schools and other local governments. Similarly, there may be some loss of school district revenue.
And that’s about all there is to say, I guess. Measure 63 isn’t going to wreck government finances, it’s just going to sting a little. Local governments will mostly just lay off inspectors to reduce their expenditures. The state government will take a small hit. And some school districts may, over time, see some of their funding bleed away.
The bigger question, I think, is what kind of economic damage Measure 63 will do to the private sector. What will happen to the building industry itself?
More on that later.