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The session that wasn't.

Byline: The Register-Guard

The Oregon Legislature's mistake was in thinking that reaching an agreement on tax reform would be easier now than it was last year. In fact, the obstacles that have prevented a generation of Oregon lawmakers from making fundamental changes in the state's unstable tax system remain firmly in place. Tuesday's abortive special session continues a pattern that can be traced back as far as the McCall administration.

The 2003 regular legislative session was the longest on record, largely because of budgetary problems aggravated by Oregon's near-total reliance on a single, volatile revenue source - the income tax. Though lawmakers could not agree on how to improve the state's tax system, most agreed that improvements would be desirable. So the Legislature passed House Joint Resolution 42 and went home.

HJR 42 established a bipartisan tax reform task force and scheduled a special session to consider its recommendations on June 1. The task force conducted hearings around the state, and some members' support began to coalesce around the idea of a spending cap.

In its latest version, the proposal would have limited the growth in state spending to 4 percent a year. If the state had collected more in taxes than could be spent under the cap, the surplus would have been placed in a reserve to be tapped when tax revenues fell short.

It soon became apparent that resolving to act on tax reform and actually taking action were two different things. The spending cap proposal never found strong support among Democrats, who feared that limiting growth to 4 percent would slowly strangle state programs. They pointed out that Oregon already has a spending limit, adopted in 2001, that limits state spending to 8 percent of gross personal income.

The debate took on an increasingly partisan character as June 1 approached. House Speaker Karen Minnis, R-Wood Village, a strong supporter of the spending cap, vowed that she would convene her chamber as required by HJR 42. Senate President Peter Courtney, D-Salem, said he would not call his members into session, because there was no point in gathering to discuss a plan that had no chance of winning legislative approval.

On Tuesday, Minnis called the House to order and adjourned 18 minutes later. Democrats had stayed home, depriving the House of a 40-member quorum. The Senate did not meet at all.

Oregonians can expect a round of finger-pointing over whether the Democrats violated the spirit or the letter of HJR 42, or whether Minnis was promoting Republican candidates' campaigns with a grandstanding attempt to hang the failure of the tax reform effort around Democrats' necks. Republicans will blame Democrats for refusing to limit spending growth and missing a chance to create a budgetary reserve. Democrats will accuse Republicans of attempting to waste public money on a special session focused on a doomed proposal that didn't qualify as genuine tax reform.

In the end, not much blame attaches to anyone. HJR 42 and other state laws appear to give legislators an escape hatch if they changed their minds about the need for a special session. Democrats didn't like the spending cap plan, weren't going to vote for it and rightly saw no point in convening. Minnis, for her part, promised to follow through as best she could, and she kept that pledge - though she knew as well as anyone that a special session would be futile.

The special session that wasn't left Oregon exactly where it was before: Vital public services depend on a dangerously volatile tax system, there's no reserve fund for budgetary emergencies, and a consensus on reform is out of the Legislature's reach. Some useful work on a spending cap plan has been done, but in retrospect, it was wishful thinking to believe that HJR 42 would unite the Legislature in support of a particular tax reform plan.

The only fundamental alterations in Oregon's tax system in recent years have come through the initiative process - and in response to legislative inaction, that blunt instrument may be employed once again.
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Title Annotation:Editorials; Tax reform still out of Legislature's reach
Publication:The Register-Guard (Eugene, OR)
Article Type:Editorial
Date:Jun 2, 2004
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