Tax and spend: How Oregon measures up.

Byline: David Steves The Register-Guard

SALEM - Is Oregon a big-spending state or a low-tax haven? New Census data doesn't exactly clear up that long-disputed question.

According to the U.S. Census Bureau, Oregon is both. It ranks a low 40th among the states in tax receipts, collecting $1,700 per capita in 2004. But it also ranks a fairly high 17th for per capita expenditures at $4,797.

In any event, the new data show Oregon is among the vast majority of states where the taxpayer burden has gone up, when compared with a decade earlier. Oregon's state tax collections per capita increased by 30 percent from 1994 to 2004.

Nationally, the average increase was 41 percent.

Even when the numbers are adjusted for inflation, the individual tax burdens increase in 43 states, including Oregon.

Oregon's income tax rates haven't changed, but as income has increased, so too has the amount that Oregonians pay to the state, said Paul Warner, head of the nonpartisan Legislative Revenue Office.

"During that time, Oregon's personal income went up 45.2 percent, so taxes as a share of income has actually declined," Warner said.

Chuck Sheketoff, executive director of the Oregon Center for Public Policy said the increased spending in Oregon and other states isn't an indication of runaway spending, but that the costs of providing public services and employing public workers are being driven up by the same thing that's affecting the bottom lines of private employers and households.

"One of the reasons is health care," said Sheketoff, whose center examines tax and spending policies and how they affect lower-income households. "A big share of the cost of government is health care."

Bill Conerly, an economist and the chairman of the Cascade Policy Institute in Portland, said the reason Oregon's government spending for such things as education, health and human services, and public safety programs is above the national average, yet its tax receipts per capita are below average, is that it relies on other forms of revenue to pad what it collects from taxpayers.

"The difference is fees," said Conerly, whose institute advocates libertarian-leaning free-market policies.

Warner said the biggest state fee is tuition paid by public university students. He cited additional nontax revenue sources that helped boost Oregon's spending levels to above the nationwide state-spending average, which was $4,797 in 2004. These revenue sources included the lottery and federal money that's transferred to the state for programs such as highway construction and Medicaid health insurance for the poor.

The Census numbers do not include local taxes, which in many states generate most of the money for schools. They also do not include federal taxes.

Nationally, rising education and Medicaid costs have fueled state spending growth, which has led to higher taxes. In a bid to stem rising costs for states, Congress passed legislation last week allowing states to charge about 13 million Medicaid beneficiaries new or increased co-payments and premiums.

But education is the biggest budget item, consuming an average of 31 percent of state spending. Public welfare, which includes Medicaid, comes in second at 24 percent. Highways account for 6 percent of state spending and police protection accounts for just 1 percent.

States, on average, get nearly half of their tax revenue from sales taxes, a third from personal income taxes and 5 percent from corporate income taxes.

Alaska, which gets much of it revenue from oil production, saw its tax receipts drop 1 percent, to $2,035 per person. Oil revenue helped Alaska spend $12,294 per person in 2004, far more than any state.

The Associated Press contributed to this report.

STATE TAXES

State tax receipts per person:

OREGON

2004: $1,700; 40th in nation

1994: $1,309; 30th in nation

U.S. AVERAGE

2004: $2,026

1994: $1,437

EXTREMES

Highest 2004: Hawaii, $3,050

Lowest 2004: Texas, $1,368

NEIGHBORS

California: $2,392 in 2004; ninth in nation

Washington: $2,239 in 2004; 13th in nation

ON THE WEB

For more information, visit the Census Bureau's state government finances page, www.census.gov /govs/www/ state.html