Property tax appeals divert about $4 million into holding accounts

Published 1:00 pm Wednesday, December 11, 2024

BAKER CITY — Nearly $4 million in property tax revenue is not available, at least temporarily, to Baker County, its cities, school districts and other tax districts due to appeals from three major corporate taxpayers.

The companies — Idaho Power Company, Pacificorp and Charter Communications — contend that the Oregon Department of Revenue exaggerated the assessed value of their properties in Oregon, including in Baker County.

That value is the basis for the companies’ property tax bills.

The Baker County Assessor’s Office sets values for most properties, such as homes and businesses.

But for several large companies that own property in multiple counties, such as utilities, appraisers from the Oregon Department of Revenue, not the county, set the assessed value on which the companies’ property tax bills are based, Baker County Assessor Kerry Savage said.

Although the companies have continued to pay property taxes based on the state’s valuation, Baker County is keeping some of that money in separate accounts, rather than distributing it to the county, cities, schools and other taxing districts, in case the companies win their appeals in Oregon Tax Court, Savage said.

In that case, the county would have to refund the money to the companies.

If the county distributed all the tax dollars, and the companies then prevailed in court, the county would have to pay refunds, which in the case of Idaho Power, the county’s largest property taxpayer, could exceed $1 million.

The county would also have to pay interest, Savage said.

But by diverting some of the tax dollars to a potential refund account, as allowed under Oregon law, the county doesn’t have to pay interest if the companies win and the county is ordered to refund the money, he said.

Alternatively, if the companies’ appeals are rejected in court, the county would be able to distribute the money held in those accounts, yielding a significant one-time influx of dollars to the county, cities and school districts, Savage said.

The county would get the largest share, about 26% of the total, approximately $1 million, Savage said.

Baker City would get about $631,000, and the Baker School District about $890,000. Other school districts, cities and taxing districts would get smaller amounts.

The county has diverted about $4 million into holding accounts due to appeals, most of that, $3.6 million, from Idaho Power tax payments over the past four years. The company appealed its valuation for each year, Savage said.

Idaho Power Company has been the biggest property taxpayer in Baker County for six straight years.

The Boise company’s tax bill for 2024-25 was $2,200,699. The assessed value of its property within Baker County, which includes dams and power lines, was more than $212 million, according to state appraisers.

Due to Idaho Power’s appeal, Baker County diverted about 45% of the company’s tax payment — $990,000 — to a holding account rather than distributing the money to the county, cities, school districts and other districts.

Savage said the 45% figure nearly matches the difference between the state’s valuation of Idaho Power’s properties in Oregon — $579 million for the current tax year — and the company’s claimed valuation of no more than $323 million.

Although homeowners and other property owners can also appeal their property tax bill, those are handled at the county level.

Appeals by companies such as Idaho Power, by contrast, whose tax bills are based on Department of Revenue appraisals, are filed in Oregon’s Tax Court.

Idaho Power appeals

The company’s most recent appeal, for the 2024-25 tax year, was filed Sept. 12, 2024, in Oregon Tax Court. The company filed similar appeals for the previous three tax years.

For the current tax year, the Oregon Department of Revenue set the value of the company’s properties in Oregon at $579 million. Idaho Power owns property in several counties, including Baker, Malheur, Union and Umatilla.

Idaho Power contends in its appeal that its property value should be no more than $323 million.

The appeal, filed by attorneys David J. Crapo and John T. Deeds of Bountiful, Utah, and Idaho Power deputy general counsel Gina Wolverton, cites several reasons why the company believes the state’s appraisers overestimated the value.

These include overstating the real market value of the company’s properties, failing to account for “regulatory restrictions” on property, and overestimates the company’s net operating income.

Pacificorp, Charter Communications

Pacificorp, which also has appealed its Oregon property valuation for the past four years, is the ninth-largest property taxpayer in Baker County. Its bill for the current tax year was $236,000.

Charter Communications ranked 17th, with a tax bill of $74,000. This is the first year Charter has appealed its valuation, Savage said.

Over the past four years, Baker County has diverted about $330,000 in Pacificorp tax payments to a potential refund account.

State appraisers pegged the company’s property value in the state at $3.99 billion for the current tax year. Pacificorp contends its valuation should be no more than $2.11 billion.

When will the cases be settled?

That’s difficult to predict, Savage said.

The Idaho Power appeal is in effect on hold, at the company’s request, pending the resolution of Pacificorp’s case, which is on appeal to the Oregon Supreme Court, said Rocco Lieuallen, administrator for the Oregon Tax Court.

The outcome of the Pacificorp case could determine whether Baker County has to refund some or all of the money in its accounts, or whether the county can dole out those dollars to the county, cities, school districts and other districts.