By QUINTON SMITH/YachatsNews
The Lincoln County School District reversed course this week, agreeing not to charge up to 300 victims of September’s wildfire in Otis a special tax if they rebuild their homes.
The five-member school board voted unanimously Tuesday night to waive its construction excise tax on homeowners wanting to rebuild, if the homeowner applies for the waiver by June 30, 2021.
The about-course occurred following an October report by KGW-TV in Portland in which Otis fire victims expressed outrage they were being charged anywhere from $1,000 to $2,000 in a school construction tax just for replacing their homes. The Lincoln County district levies a tax of $1.24 a square foot on new or replacement construction to help it finance new buildings or repairs.
In October, Superintendent Karen Gray told KGW that the district could not exempt the Otis homeowners from the tax, saying Oregon law did not allow it and the district could not unilaterally waive it.
That drew outrage when KGW reported at least one other district affected by the devastating wildfires was making such exemptions and that the author of the 2008 law said it was not the intent to charge homeowners rebuilding from disasters.
In response to that — and one county commissioner suggesting the county refuse to collect the school’s tax — Gray and the district softened their response in November, seeking more legal advice on what it could do. While the legal advice wasn’t clear, the district and school board said Tuesday night the right thing to do was to waive its tax.
But there was still a hint of defensiveness.
“I want people to know we’re losing money on this,” Gray told the board before its vote. “This is a clear exception for a once in a 100-year disaster. But it’s a small price to pay to help these people rebuild.”
Gray said she is hired “to make sure the district follows the law.”
“We have many decisions we make that we wish we did not have to make,” Gray said. “But we went to an attorney and looked for advice and found a loophole.
Board member Ron Beck of Newport said while the district thinks it found a loophole, it runs the risk of getting sued for not uniformly levying the tax. But he said the risk is worth it to help Otis residents.
“Don’t get me wrong – it’s the right thing to do,” he said.
Liz Martin of Depoe Bay, who represents north Lincoln County and the Otis area, was the only board member who suggested it acted too slowly. By not waiving the tax months ago as Otis homeowners started rebuilding work, Martin said the district unfortunately “created heartbreak and a lot of bad feelings.”
“We never wanted to take money from people who had already lost everything,” she said. “… we are doing our best but we had some constraints to work through.”
District officials say they are scheduled to meet with Lincoln County next week to work through the process of implementing the exception. It also has to work out a way to refund any excise taxes Otis homeowners may have already paid.
The district’s waiver may not work for everyone in Otis. To qualify:
- The person must have owned and occupied the home at the time of the fire;
- The home must be a primary residence and not a vacation home or rental property;
- The home being rebuilt cannot add new or significant additional square feet to the original residence;
- And, the homeowner has to apply for the waiver before June 30, 2021.
Gray told the school board that while the district’s waiver qualifications are strict, “I hope our community knows we don’t want to add insult to injury and want to help them rebuild.”