Guest Opinion

Senator says package good for state

, Jun 27, 2009, Updated Oct 30, 2009 (2 Reader comments)

The 2009 revenue package that the Legislature just passed is a fair, modest, well balanced change made in tough economic times. It represents a modest shift toward more tax fairness. It does so in a way that does not target small businesses or those businesses in Oregon that are having an especially rough time in this economy. It merely asks those who can to contribute their fair share. Families across Oregon are struggling to make ends meet and the demand for help staying afloat is skyrocketing. If there was ever a time for tax fairness, it would be now, when so many people are trying to make ends meet.

There is no question that the Oregon’s revenue structure is flawed. Legislators, with the help of economists, are required to make assumptions for two years ahead of time how much the government will collect in taxes. During a recession, tax revenues are reduced due to high unemployment, which changes those assumptions. Meanwhile, while the state of Oregon is taking in less money, it spends more on safety-net programs. As it currently stands, the state simply doesn’t have the resources to keep our school year intact, our courts open and to take care of our most vulnerable seniors and children.

As Oregon’s families tighten their budgets in the face of the worst fiscal crisis in 75 years, the Legislature has had to do the same by cutting spending by almost $2 billion. To balance those program and service cuts, we are also asking big corporations and the top 2.5 percent of earners to pay more to maintain core services, like education, health care and public safety. These are tough decisions, but middle class families and small businesses have been hardest hit by this recession, and we could not place additional financial burdens on them.

This revenue package is based on fairness. The Legislature will raise the $10 corporate minimum tax, which hasn’t changed since 1931, in a way that protects small businesses. Businesses with Oregon sales of less than $500,000 (19,498 of 32,892 Oregon businesses) will pay $150. Corporations enjoying more than $100 million dollars in Oregon sales will not pay more than one-tenth of one percent (0.01) of those sales as the corporate minimum.

Businesses having less that $250,000 in taxable income will not be affected.

The personal income tax was also made more progressive. It distributes the tax burden according to people’s ability to pay by creating a fourth (10.8 percent for taxable income of more than $125,000 but not of more than $250,000) and fifth (11.0 percent on taxable income of more than $250,000) brackets for single and joint filers of Oregon. The rate change is reduced to 9.9 percent in 2012. The rates on income beneath that will not change (9 percent). Businesses and family households with net income of less than $250,000 ($125,000 if a single filer) will not be affected by this plan, and this is 97.5 percent of all Oregonians. The revenue package also includes a phase out of the federal tax subtraction for joint filers with adjusted gross income of more than $250,000 (above $125,000 if single). Both of these changes will raise about $472 for the 2009-11 biennium.

It might be helpful for you to know that there was no disagreement from the state’s business groups that Oregon needs to raise taxes to avoid gutting essential services. The Oregon Business Association and the Oregon Alliances of Business Associations, and Association of Oregon Industries put forward their own plans on how to raise corporate and personal taxes. The Legislature’s plan raises the least amount of revenue of the three plans.

It is only fair that part of the solution to finding a path out of these challenging times incorporates addressing the inherent imbalance of the tax burden on working families versus profitable corporations. Corporations receive value from our roads, from various other public services, from our quality of life, and not last nor least, from a quality educated work force. These public services must be supported, not just by wage earners, but by businesses as well. Since 1973, the share corporations have contributed to the general fund has dropped from 17 percent to less than 6 percent.

I was elected to represent the best interests of the state and all Oregonians, and that means sometimes I make decisions less than popular with some stakeholder groups. I’m confident that this revenue package is the right decision for our state at this time.

Sen. Laurie Monnes Anderson represents Gresham.

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