SALEM — It’s not hard to see signs of the slowdown.

But don’t expect to see any accompanying savings on your tax bill.

Houses are sitting on the market for months, the weathered “for sale” signs leaning out front. Long lines of potential buyers have all but vanished, while the list of properties on the market has swelled.

A stagnant real estate market in much of the state is putting a damper on property values, yet property taxes — which are due Thursday — are still going up.

In Bend, for instance, sales prices dipped by .6 percent through the first three quarters of 2007 and in Redmond, the prices were off by 2.7 percent, according to figures from the Central Oregon Multiple Listing Service.

Meanwhile, property tax rates in Central Oregon will climb between 3 and 9 percent this year, depending on where you live.

That’s lighting up the phones at county assessment offices. The most common query: What gives?

“Property owners hear about the downturn in real estate and the economy in general, and they know that housing prices have been on the slide since the third quarter of 2005,” said Bob Cooper, a Bend real estate broker who was stunned to see growing appraisals and a growing tax bill.

“Yet appraisals are increasing, and they don’t understand it.”

The bottom line is this: As of 1997, your taxes are not connected to the market value of your house, land or business — as a result of two constitution-rewriting ballot measures in 1996 and 1997.

Under the second initiative, Measure 50, those taxable values ratchet upward by a steady 3 percent a year.

“It’s complicated, and some people still struggle with the idea that if their real market value is lowered, that it won’t have an effect on their taxable value,” said Scot Langton, Deschutes County assessor, who met with Realtors on Tuesday.

Meanwhile, voters last year approved a flurry of new bonds and taxes, such as assessments for city services in La Pine, schools in Culver and higher rates for fire coverage in Sisters and Camp Sherman.

That tacks on additional taxes, above that 3 percent increase.

And those new bonds and tax levies are pegged to a property’s assessed value, which will keep going up, year after year — unless property values take an unprecedented nosedive.

Still, that hasn’t been a bad thing over the long run, at least for taxpayers, because the base tax rate can only rise 3 percent a year — while real market values saw double-digit increases over the past decade.

“In the old days, taxes would go up 30 percent in a year,” Langton said.

Tax revolt

The property tax revolt of the 1990s happened in two stages.

In 1990, voters passed Measure 5, which set a limit of $15 in taxes for every $1,000 in assessed value.

But that didn’t stop real estate values from climbing rapidly in the go-go decade, spurred by rapid in-migration from other states, most notably California.

As a result, property tax bills kept climbing — and the discounts from the 1990 measure were short-lived.

Crook County Assessor Tom Green, who has been with the department since he was hired as an appraiser in 1974, remembers lines of angry property owners.

“It wasn’t uncommon to have 90 appeals a year, and in Deschutes County, they had 6,000 one year,” he said.

That frustration led tax-cutting activist Bill Sizemore to propose Measure 49, the so-called property tax “cut-and-cap” measure. It passed in 1996, but was legally unclear — and the Legislature and Sizemore drafted a replacement, Measure 50, which voters approved in 1997.

The centerpiece of that second reform was the divorce of market value and assessed value.

Assessed values were rolled back to 1995 levels, minus 10 percent, and then allowed to increase by 3 percent a year, said Lee Patterson, finance and taxation analyst with the Oregon Department of Revenue.

In addition, any new buildings, or any existing ones that are remodeled, are assessed based on what the value would have been in 1995 — minus 10 percent, and then adjusted by 3 percent a year. That figure is known as the “maximum assessed value.”

Today, assessed and market rates are shown on tax forms, but your taxes are based on the assessed figure.

Property taxes are the second-largest source of government revenue in Oregon, behind income taxes. In the fiscal year 2006-07, public entities collected almost $4.1 billion from property owners, the state says.

Property taxes pay for local government programs, such as sheriffs, jails, parks and irrigation districts. Income taxes pay for statewide services, including universities and subsidized health care.

Public schools in Oregon get dollars from both property and income taxes.

Fraction of value

In the decade since 1997, property values in Oregon and particularly in Central Oregon have skyrocketed.

Yet while market values spiked, assessments — and therefore property taxes — could only climb by that 3 percent.

The result: Assessed values today are lower than market values — and in Central Oregon, much less — and that’s even with the 3 percent increase this year.

According to Department of Revenue data, the assessed value of all property in Deschutes County works out to be 50.8 percent of the total market value. In Jefferson and Crook counties, that figure is 61.2 and 51.6 percent, respectively.

Once people understand that dynamic, the angst dissipates, Green said.

In Crook County this year, there’s been just one appeal of real market value, he said.

The 3 percent annual growth rate only halts if market values drop below the assessed value — but based on the difference between market and assessed values — the likelihood of that happening anytime soon is slim.

“Looking at the total properties, with the assessed values and their market value, it would have to be a major catastrophe for anyone to see a reduction,” said Jefferson County Assessor Patsy Mault.

She was elected in 1995, and also remembers when property taxes were pegged to market values.

“It was insane. We would have people lined up out the doorway and down the hall, pounding fists and upset about the rapid increase of taxable values in the early 1990s,” she said.

Today, with the annual 3 percent increases, taxes are predictable and most people prefer that to the previous system — even if there’s a spell when market values flatten out, she said.

“People all want their property values to increase,” Mault said, “but they don’t want their tax bills to double.”

Paying your property taxes

The government giveth — in terms of schools, streets, police patrols, parks and jails.

Now, it’s time for the government to taketh away.

Property tax payments must be paid online or sent in the mail as of Thursday, if you haven’t already mailed off a check. Under state law, you will receive a 3 percent discount if you pay your bill in full and on time.

In Oregon, property taxes pay for the gamut of services offered by local governments, such as cities and counties, and special taxing districts such as rural fire departments and irrigation and park districts.

State programs such as universities, public health care and prisons are supported by income taxes.

Public schools get money from both property and income taxes. Prior to the 1990 Measure 5 property tax limit, schools got the lion’s share of their funds from property taxes. Today, the majority of K-12 dollars come from income taxes.

Information about property taxes is available from assessment departments at:

• Deschutes County: www.deschutes.org ; contact the Assessor’s Office at 388-6508, or for payment information, contact the tax office at 388-6540 .

• Jefferson County: www.co.jefferson.or.us ; contact the Assessor’s Office at 475-2443.

• Crook County: www.co.crook.or.us; contact the Assessor’s Office at 447-4133.

— James Sinks