Monday, July 7, 2008

First Ever Breakout of $1.4+ Billion in Oregon State Tax Breaks for Housing: Home Owners Get 91% of State Housing Tax Breaks.

I began this blog shortly after my retirement last year on July 4th, my independence day after 37 years of federal service. I wanted to make my 1st. anniversary post special, presenting Oregon housing data that hasn't before been publicly highlighted.

So, I First Constructed a Report In Excel Showing ALL Oregon STATE Tax Expenditures.
I constructed a one of a kind Excel workbook HERE that details ALL projected Oregon tax expenditures for 2005-2007 and 2007-2009 as extracted from reports from the State Revenue Office.
Two worksheets show ALL state tax expenditure items. One worksheet lists the tax expenditures by a reference number and the second sorts those same expenditures in descending order by $$ during the 2007-2009 biennium. (Revenue Department source material in PDF format that I used to construct the workbook can be found HERE for 2007-2009 and HERE for 2005-2007).

I Then Constructed the First Ever Oregon State HOUSING Tax Break Report, Separating State Housing Tax Breaks Into Home Owner and Rental Categories.
In the workbook you also will find two separate worksheets of housing related state tax expenditures. The first worksheet groups tax expenditures into home ownership and rental housing expenditures. The second worksheet takes that data and ranks housing tax expenditures in descending order by $$ and also includes a simple pie graph showing the % of all housing tax expenditures split between home ownership and rental housing.

Some key points about Oregon HOUSING tax expenditures for the 2007-2009 biennium:
  1. Home ownership related state tax expenditures total more than $1.29 Billion.
  2. Home ownership state tax expenditures account for 91% of all Oregon tax expenditures while rental tax expenditures account for 9% of state housing tax expenditures.
  3. Renter households were 35.2% of all Oregon households in 2006. If renter households received 35.2% of state housing tax breaks instead of 9%, housing tax breaks for renters would have increased by nearly $330 million during the 2007-2009 biennium [increasing from $132.8 to $462.5 Million].
  4. Two deductions--The home mortgage interest deduction and the property tax deduction for homeowners-- account for 86% of the total of Oregon HOUSING tax expenditures.
  5. In contrast, the largest rental housing tax expenditure, for accelerated rental housing depreciation, accounts for only 3% of ALL Oregon HOUSING tax expenditures.
  6. The total for Oregon HOUSING state tax expenditures grew by nearly $165 Million from the 2005-2007 biennium; a growth in projected home mortgage interest deductions accounted for $123 million of that growth.
Some caveats and notes:
  1. Tax expenditures for the 2007-2009 biennium are projections only, as the biennial legislative session was not completed at the time the Revenue Department issued this report. Changes made during the 2008 special session to tax expenditures are also not included in this report.
  2. I necessarily made some classification judgments for housing expenditures to assign them to the rental or home ownership categories.
  3. Note these are biennial expenditures--As I have had to remind myself sometimes, be sure to divide by 2 to get annual expenditures!
Earlier Post on Federal Home Ownership Expenditures
Earlier this year I did a post
HERE reporting on federal expenditures for home ownership. That post projected that federal tax expenditures for home ownership will cost $1 Trillion from 2008-2012 and in 2012 will be reach the rate of $250 Billion annually.

Total Projected Federal Expenditures in Oregon PLUS State Expenditures for Oregon Homeownership: $4.145 Billion Annually.
If Oregon accounts for 1.5% of those federal home ownership expenditures the additional Oregon federal home ownership costs would be $3.75 Billion annually in 2012, or $7.5 Billion for a biennium.
Adding the 07-09 state tax expenditures of $1.29 billion to a projected 2012-2013 federal expenditure of $7.5 billion for Oregon yields a projected 2012-2013 state AND federal expenditures for Oregon home ownership of $8.29 billion, or $4.145 billion annually. (This estimate is low as the projected state tax expenditure estimate uses the earlier 07-09 time period).

Comments Invited
The 2009--2011 version of the state tax expenditure report will be likely issued by the Revenue Department later this year or early next. Before I produce a similar report next year I am inviting your comments on what you found interesting, illuminating, confusing, questionable, or missing in the first Excel Oregon State Housing Tax Breaks report I did this year.

You can add a comment below this post or email me at

1 comment:

  1. Really excellent work, Tom. Thanks for doing this!