Measures would curb state spending.Byline: David Steves The Register-Guard
CORRECTION (ran 10/27/2006): Associated Oregon Industries does not support Measure 41, a statewide ballot measure that would increase the deductions that taxpayers can claim on their state income tax returns. An article on Page A1 on Saturday did not accurately describe AOI's position.
SALEM - Measure 41 is a double-edged sword. It would cut the state income tax bills of four out of five Oregon filers. It also would take a big slice out of the state government revenue meant to provide services to 100 percent of the state.
So Measure 41 could prove a difficult choice for voters, who this weekend are receiving their ballots for the Nov. 7 election. Voters will have to decide if a modest tax cut - the average would be $226 - for themselves and most of their neighbors is worth the effects of a $400 million a year hit to the Oregon general fund, which pays for education, health care and public safety.
Unlike past tax-cutting measures, this one doesn't easily lend itself to charges that it's a radical departure from Oregon's traditional tax system, that it's unfair to poor or working-class people or that it's a huge giveaway to corporations or the rich.
Measure 41 would restore to Oregon's income tax code a method of accounting for dependents that was on the books for a half-century until the Legislature did away with it in an attempt to raise tax revenue in 1983.
The measure would bring the state's approach in line with the federal income-tax code. About 78 percent of income-tax filers would see their taxes drop. And since filers could still opt to fill out their tax returns under the current system if it's advantageous to them, no one would see their taxes increase as a result of the measure.
Advocates tout Tout
To promote a security in order to attract buyers.
To foster interest in a particular company or security. For example, a broker might tout a security to a client in the hope that the client will purchase the security. Measure 41 as the "family tax cut."
The cut would be "spread widely, and a higher percentage of the cut would go to lower and middle income families," said Bill Sizemore Bill Sizemore (born June 2, 1951 in Aberdeen, Washington) is a political activist in Clackamas, Oregon, United States.
Sizemore has never held elected office, but has nonetheless been a major political figure in Oregon since the 1990s. , who authored Measure 41 but leaves it to Washington, D.C.-based FreedomWorks to run the campaign in Oregon. Most of the money spent on signature gathering came from Nevada millionaire and Oregon business owner Loren Parks.
Public-policy analyst Chuck Sheketoff, whose think-tank has criticized Measure 41, acknowledged that the measure won't strike most voters at first glance as a giveaway for the rich - a charge used in campaigns to defeat earlier tax-cutting initiatives.
"It's not regressive re·gres·sive
1. Having a tendency to return or to revert.
2. Characterized by regression.
re·gres , like past Sizemore measures have been," said Sheketoff, executive director of the Silverton-based Oregon Center for Public Policy. But Sheketoff likened the initiative to fool's gold fool's gold: see pyrite. .
"At first glance, it may look good. But once you really look at it in the light of day, it's not worth much," he said.
Further, the measure would not cut taxes for everyone, leaving some groups such as seniors largely without a benefit, Sheketoff said.
In the current two-year budget cycle, the Measure 41 tax cut would all come from the revenue that the state could not spend anyway because they'd otherwise be rebated through the "kicker Kicker
A right, warrant, or some other feature added to a debt instrument to make it more desirable to potential investors.
The ability to trade a bond or other debt instrument in for stock may entice investors, if they feel the stock will appreciate. " system that returns to voters tax dollars that exceeded the official revenue forecast by 2 percent or more.
The measure would start to be felt in 2007-09 biennium bi·en·ni·um
n. pl. bi·en·ni·ums or bi·en·ni·a
A two-year period.
[Latin : bi-, two; see bi-1 + annus, year; see at- , when it would drive revenue down by a projected $800 million, or 6 percent, out of the projected $13.8 billion general fund.
"To continue all the current services we have, we wouldn't be able to do that with the revenue loss from Measure 41," said Ken Rocco, director of the nonpartisan Legislative Fiscal Office. "Without any additional revenue, we'd have to reduce programs."
Ninety percent of the state general fund budget goes to health care, education and public safety. The Legislature would have to make any cuts.
Savings vs. services
Rep. Phil Barnhart, D-Eugene, said voters will have to ask themselves if a tax break is worth the price in public services Public services is a term usually used to mean services provided by government to its citizens, either directly (through the public sector) or by financing private provision of services. .
"In theory, a particular tax cut might be a great thing, but the actual effect of it is that it would impair im·pair
tr.v. im·paired, im·pair·ing, im·pairs
To cause to diminish, as in strength, value, or quality: an injury that impaired my hearing; a severe storm impairing communications. the state's ability to pay for basic services basic services,
n.pl frequently insurance companies split dental procedures into basic and major categories. Basic services usually consist of diagnostic, preventive, and routine restorative dental services. ," he said.
Critics have said the state can't afford to give up that much revenue, especially as it continues to restore services to their levels before the economic recession earlier this decade that drained about a quarter of the state's revenue.
Russ Walker Russ Walker was a second-row forward for Barrow and Hull.
Walker, who scored the second try as Hull beat Widnes 14-4 in 1991 Premiership final, was a tough tackler who combined his career with a job as a mechanic. Now works in the petrochemical industry in Barrow. References , a chief petitioner of Measure 41 and the Oregon director of FreedomWorks, scoffed at this criticism.
His measure's backers include state and national anti-tax organizations and individuals. Representatives of Taxpayers Association of Oregon, FreedomWorks, and Parks combined to submit six arguments to the state voters pamphlet on behalf of the measure. Other supporters include GOP gubernatorial gu·ber·na·to·ri·al
Of or relating to a governor.
[From Latin gubern candidate Ron Saxton Ronald L. Saxton (born 1954, Albany, Oregon) is a lawyer and Republican politician in Oregon. He graduated from Albany High School in 1972, earned a bachelors degree from Willamette University in 1976 and the political action committee of Associated Oregon Industries, the state's biggest business trade group.
Opposition arguments in the voters pamphlet came from more than three dozen groups and individuals, including the public university presidents, public-employee and private trade unions, law enforcement, Intel, Hewlett-Packard, the Oregon PTA PTA or parent-teacher association: see parent education. , a pair of business groups, and Gov. Ted Kulongoski Theodore R. "Ted" Kulongoski (born November 5 1940, in rural Missouri) is an American Democratic politician. Since 2003, he has served as the Governor of Oregon. He was re-elected in 2006. and U.S. Sen. Ron Wyden Ronald Lee Wyden (born May 3, 1949) is Oregon's senior United States Senator. He is a member of the Democratic Party. Early career and personal life
Wyden was born in Wichita, Kansas to Edith Rosenow and Peter H. , both Democrats.
How tax code would change
Here's how the Oregon tax code works: Filers don't get a deduction based on the number of people in the household. Instead, they take an inflation-adjusted exemption credit against their taxes owed - currently it's $159 per person - for themselves, spouses and dependent children. A family of four gets a credit totaling $636.
Under Measure 41, filers could choose between the credit method or the same exemption deduction as offered on the federal tax form. In the 2005 tax year, that was a $3,200 deduction per exemption. A family of two adults and two dependent children would receive deductions totaling $12,800, which they would use to reduce their taxable income Under the federal tax law, gross income reduced by adjustments and allowable deductions. It is the income against which tax rates are applied to compute an individual or entity's tax liability. The essence of taxable income is the accrual of some gain, profit, or benefit to a taxpayer. . For most Oregon filers, the new deductions would be worth more than the existing credits.
The state Legislative Revenue Office estimates that the measure would give a family of four with an income of $65,000 a tax cut of $564.
According to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
3. the nonpartisan Legislative Revenue Office, filers with an income of less than $20,000 would experience an average reduction in tax of 24 percent under Measure 41, while those with income of at least $70,000 would get a tax cut of 4 percent, on average.
The Legislature in 1983 did away with deductions and replaced them with tax credits in order to increase tax revenue for the state, Legislative Revenue Officer Paul Warner said. At that time, the Legislature was grappling with a severe budget-wrecking recession.
Measure 41 would cut the state's income-tax revenue by 7 percent, with nearly four out of every five filers benefiting from a lower tax bill.
Who are the one out of five filers who wouldn't get a tax cut under Measure 41? According to the Legislative Revenue Office, they are:
Children who work and file taxes but are claimed as dependents by their parents.
People with so little money that they have no taxable income - and therefore can't take advantage of the deduction.
High-income filers who can't benefit from the deduction because it is phased out as income rises. For joint filers with income around $235,000 or more, the deduction is cut until it is eventually eliminated around $357,000.
In addition, single filers would get less benefit than joint filers, since the average single filer has only 0.9 personal exemptions Personal exemption
Amount of money a taxpayer can exclude from personal income for each member of the household in calculation of a tax obligation.
See exemption. , compared with three for the typical joint filer.
That's one reason AARP AARP, a nonprofit, nonpartisan national organization dedicated to "enriching the experience of aging"; membership is open to people age 50 or older. Founded in 1958 by Ethel Percy Andrus as American Association of Retired Persons, AARP now has over 30 million of Oregon opposes Measure 41. It argues in the voter's pamphlet that 98 percent of seniors will get no tax relief.
"Instead, they may lose prescription drug prescription drug Prescription medication Pharmacology An FDA-approved drug which must, by federal law or regulation, be dispensed only pursuant to a prescription–eg, finished dose form and active ingredients subject to the provisos of the Federal Food, Drug, coverage and access to valuable programs like Oregon Project Independence that keep seniors in their home," AARP Oregon director Jerry Cohen cohen
(Hebrew: “priest”) Jewish priest descended from Zadok (a descendant of Aaron), priest at the First Temple of Jerusalem. The biblical priesthood was hereditary and male. argued.
Walker, the measure advocate, acknowledged the tax benefit isn't great for seniors. But he said their cost of living is lower than for families, since they're not paying for child-rearing expenses.
"Families need help. That's one of the reasons we call it the Family Tax Cut," he said.
MEASURE 41 Ballot title: Allows state income tax deduction Tax deduction
An expense that a taxpayer is allowed to deduct from taxable income.
See deduction. equal to federal exemptions deduction and to substitute for state exemption credit Summary: Allows four out of five filers to take a bigger state tax deduction than currently available for themselves, spouses and dependents. Average annual tax reduction per filer: $226 Fiscal impact: State revenue would be reduced $151 million for 2006-07 and $385 million in the 2007-08 fiscal year. Measure 41 would reduce the 2007 personal income tax `kicker' by $151 million. The measure would reduce state revenue $407 million for the 2008-09 fiscal year and $430 million for 2009-10. Supporters: FreedomWorks; www.cse.org/oregon; (503) 709-8864 Opponents: Defend Oregon; www.defendoregon.org; (503) 231-3672
ON THE WEB
News coverage: To review Register-Guard election news stories, visit www.registerguard .com:8080/election06/news/
Editorials: To review Register- Guard endorsements, visit