Measure 28: Yes.
Ballot Measure 28 is a straightforward proposal to raise money for state programs by means of an income-tax surcharge. A thicket of myths has grown up around this simple measure. If Oregonians hack their way through the misconceptions, they will approve Measure 28 and prevent a lot of penny-wise, pound-foolish cuts to state-funded programs. Some of those cuts will be detailed in an editorial appearing in this space Sunday, but first it's necessary to address a few of the more common misunderstandings:
Oregon's budget crisis isn't that bad: This claim is made by those who point to the rapid run-up in state spending during the 1990s, and conclude that Oregon government could deal with its financial troubles by reining in its rate of growth. The notion that Oregon needs a breather from a spending spree ignores the fact that much of the budgetary expansion of the '90s was the product of Measure 5, which transferred primary responsibility for school funding to the state, and Measure 11, which mandated an expansion of the state prison system.
In addition, the days of big spending increases are over. According to the Legislative Revenue Office, in the 1999-2001 biennium Oregon's two main sources of revenue, the income tax and the lottery, generated $10.1 billion. In the current biennium, those sources will generate $9.2 billion. The Legislature has continued spending at the previous biennium's level by borrowing and draining reserves; those options are exhausted. If Measure 28 is defeated, spending during the current budget period will be $310 million less than in the previous biennium, despite inflation and population growth. The crisis is real.
There's no such thing as a temporary tax: Measure 28 would bump the top state income tax bracket to 9.5 percent from its current rate of 9 percent, and the corporate income tax to 6.93 percent from 6.6 percent. The increases would apply to three tax years, starting in 2002. The measure would generate $313 million for the biennium that ends June 30, and $411 million for the 2003-05 budget period. Many voters worry that the Legislature would quickly grow dependent upon the higher rates, and would make them permanent.
That hasn't been Oregon's experience. In 1982, the Legislature added a surcharge to all seven income tax brackets, boosting the top rate to 10.8 percent from 10 percent. The following year, the Legislature extended the surcharge for two years. The state's income tax kicker was triggered during the 1983-85 biennium, effectively negating the surcharge. The 1985 Legislature did not renew the surcharge, and it expired. Two years later, the Legislature reduced the number of income tax brackets to three, and lowered the top rate to 9 percent.
The last tax rate increase was indeed temporary. In two years' time, legislators will be eager to take credit for allowing the increases resulting from Measure 28 to expire.
Oregonians can't afford a tax increase: Any decline in state revenues reflects an even more ruinous slide in Oregonians' incomes. The state, opponents of Measure 28 say, should not aggravate its citizens' economic hardships by raising their taxes.
Measure 28, however, would not raise everyone's taxes. The poorest taxpayers, the 390,000 taxpayers with state-taxable incomes of less than $12,900 on joint returns, would pay nothing. Because of the way the state income tax code treats Social Security and some other pension income, most Oregon senior citizens would pay no additional taxes under Measure 28.
The average cost to the taxpayers in the bottom 40 percent of the state's income scale would be $35 a year. The average cost for all Oregon taxpayers would be $114 a year. Those with taxable incomes between $50,000 and $75,000 would pay an average of $148 a year. State income taxes are deductible for federal income tax purposes, producing a discount on the cost of Measure 28. The discount would be as high as 38.6 percent for those subject to the top federal income tax rate.
The cost of Measure 28 is only part of the equation. Approval of Measure 28 would avoid cuts in state-funded services that disproportionately benefit low- and middle-income Oregonians. Any additional taxes Oregonians would pay must be balanced against the advantages to be gained from preserving programs that provide education, public safety and social services.
Oregonians shouldn't reward poor legislative performance: Some voters support increased funding for state programs, but refuse to sanction the work of the Legislature during the last year's five special sessions. By rejecting Measure 28, they hope, voters would keep pressure on the Legislature to come up with a sustainable system of public finance.
These people shouldn't hold their breaths - otherwise, they'll turn blue waiting for the Legislature to come up with a perfect budgetary plan. Measure 28 is the best the Legislature could do, and it only narrowly succeeded in doing that much. Those who believe the Legislature should be goaded into further action should not use school children, the disabled and the elderly as their prod.
Nor should voters reject Measure 28 on grounds that the Public Employees Retirement System already consumes too much money. The two issues should not be connected. The legislative session that convenes Monday must relieve a major source of financial pressure on state and local governments by reforming PERS. But a successful PERS reform effort would not prevent the damage that would follow rejection of Measure 28.
Once the misconceptions are set aside, it becomes clear that Measure 28 responds to a real crisis with a temporary income tax surcharge whose effect on Oregonians' tax bills would range from negligible to manageable. It deserves to be approved.
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|Title Annotation:||Voters should look past myths; Editorials|
|Publication:||The Register-Guard (Eugene, OR)|
|Date:||Jan 11, 2003|
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|Where the yes votes are.|
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