Serving Klamath, Lake, Crook, Deschutes & Jackson CountiesI want to thank all those who worked so hard and contributed so much in the effort to defeat Measures 66 & 67. Unfortunately, the “State of Portland” and the $6.5 million purchasing power of the public employee unions have once again dictated the outcome of a statewide election.
A Wall Street Journal editorial sums up the outcome of the Oregon tax election:
The highest income tax rate in the state moves to 11% from 9%, which will give Oregon close to the highest rate in the nation’…….“Two thirds of those hit with the new 11% tax rate are small and medium-sized business owners.”… “Public employee unions have a lucrative racket: they essentially leverage the tax dollars they receive in dues from the salaries and benefits of their members to lobby for more tax dollars to secure even fatter pensions and pay”……”What was really protected was the $83,402 a year average in pay and benefits to Oregon state workers, 30% higher than what private workers receive”
WSJ.com January 28, 2010
Measure 67 passed statewide with a margin of about 74,000 votes. Measure 66 passed statewide with a margin of about 85,000 votes. The Multnomah County yes vote overrode the strong no votes cast in all five counties in our Senate District 28. In fact, they overrode all 27 Oregon counties that voted no on both tax measures.
We have no choice but to live with the election outcome; however, we believe that the election results will serve to prolong the current economic recession. Oregon businesses are now forced to pay both the retroactive taxes levied for the 2009 tax year, as well as taxes withheld for the current 2010 tax year. In effect, this year many businesses will be forced to pay taxes on gross income twice, even if they do not make a profit. At best this year of double taxation on struggling businesses will immediately put many more people out of work, and at worst lead to businesses insolvencies and closures permanently destroying jobs.
Phil Knight of Nike called the tax initiatives Oregon’s “assisted suicide for business”. I fully expect many Oregon businesses to move to another state where businesses and jobs are valued by government policies.
Governor Kulongoski said we just need to get over it and to move on, working together “to make the best choices we can for Oregon’s collective future”. The governor is asking the Legislature to enact legislation that would functionally eliminate the Oregon kicker tax refunds. Senate Joint Resolution 45 would refer a ballot measure to Oregon voters to fundamentally change the structure of both kicker refunds. The basic plan is to divert most of the money that would now be refunded to the people from taxes that they had overpaid, into a reserve fund to be spent later by the government, during times of high unemployment and low tax revenue.
Saving money for harder times is good policy. However, stealing the taxpayers’ kicker refunds to provide revenue for hard times is not an appropriate course of action. A much better plan would be to set aside a small percentage of tax revenue for savings before the rest of the money is spent. Senate Joint Resolution 49 would refer a ballot measure to Oregon voters to do just that. It would place the first 3% of general fund revenue into a savings account to only be spent during times of high unemployment and low tax revenue. This amendment would force your Legislature to save money first just as families do that are successful in saving for a rainy day.
Thirty years ago the people had come to understand that their Legislature will spend every dime they can get their hands on. The kickers were established by the people through a constitutional amendment in order to slow the unsustainable growth of Oregon government spending. They require that all excess tax money collected be returned to the tax payer, whenever the amount actually collected, exceeds the amount forecasted to be collected, by more than 2%.
Elimination of the Oregon kickers would amount to yet another enormous tax increase. The kickers have returned more than $2.5 billion to Oregon taxpayers who overpaid their taxes, and more than $500 million to Oregon corporations over the thirty-year life of that Constitutional Amendment. On average, reversal of the kicker amendment would serve to increase the annual tax burdens by yet another $100 million.
It is rumored in the Capitol that another even more onerous proposal to amend Oregon’s constitution may be introduced. This proposal would refer a ballot measure to the people to roll back the 3% cap on annual property tax increases. It would serve to levy a massive additional tax on all property owners that would grossly add to the cost of doing business, owning a home, or living in rental housing. We have not seen any draft of such a bill and we truly hope it is only a rumor.
Limiting government revenue is the only successful method of limiting government spending. Limiting government spending is the only way to limit government growth and the intrusions on our freedoms that accompanies that growth.
Please remember if we fail to support rural Oregon, then no one will.