What you don’t know-
Taxes are essential in any government. They provide everyone with the most integral components of a healthy society: security, public safety, education and even the penal system. Taxes are a part of the social contract; everyone pays a little for a lot of services and institutions that compose the foundation of government.
In Oregon, our state tax structure is vitally flawed. Currently, Oregon is not funding these fundamental government services. Reform to Oregon’s tax structure is necessary to have a sustainable, functioning state.
Many U.S. states have relatively balanced three-legged tax structures. Property tax, income tax and sales tax are usually the three main sources of state funding.
This is not how Oregon works. Oregon’s tax structure is more of a one-legged model – over 70 percent of Oregon revenue comes from income taxes. This is not proportional to other models, nor is it where a state should gain its revenue.
Oregon’s existing tax model leaves a lot to be desired. This state has screwed itself into economic disaster. There were a few key decisions made in the 1990s that led Oregon onto its treacherous economic path that are still hurting Oregon today.
Two initiatives passed in the 1990s have egregiously hurt our state. In 1990, Measure 5 was passed. This measure, sponsored chiefly by Don McIntire, capped our property taxes at an extremely low amount. This severely affected Oregon because the burden of K-12 education shifted from local property taxes to state income taxes.
Another measure that greatly impacted Oregon by increasing state spending but not state revenue was Measure 11. This law takes away Oregon judges’ discretion and replaces it with mandatory minimum sentencing. This costs the state money because Oregon continues to funnel more and more tax dollars into the prison system. Oregon must also invest in the building of new prisons to keep up with the rapidly increasing incarcerated population.
These major changes in our taxes plus several minor changes are what hurts Oregon taxpayers and state institutions. We are in a very tough spot going into Oregon’s next legislative session. But there are a few possible ballot measures that could make the state’s situation a whole lot worse.
There are two initiatives currently being circulated for signatures that will be catastrophic to Oregon’s economy if passed. Initiative Petition 6, also called the Tabor initiative, is a constitutional amendment that puts a cap on state spending. Initiative Petition 14 will allow taxpayers to claim their federal income tax deduction on their state income tax return. It is very plausible this will be a much higher exemption rate than the state level.
What these two potential ballot measures mean is simple: they will bankrupt the state. The current Oregon tax structure is unstable, unsustainable and has vital problems. But these two initiatives are not the way to solve them; in fact, they would put the state’s income in dire straits.
For instance, let us take a look at how these initiatives will affect the essential state institution of higher education.
The status of higher education in Oregon is dismal. Oregon ranks 46th in the nation for funding per student, and it has had the largest decline in the nation in state appropriations per full-time student. To compensate for this erosion in state funding, tuition in Oregon has raised 50 percent in the past six years. In addition, the salaries for faculty of Oregon public universities are 15 percent lower than public universities around the country. Programs continue to be cut and the cost of attending an Oregon university continues to increase dramatically.
Higher education cannot afford to lose one more dollar. If Oregon is forced to cap state spending, departments, faculty, programs, services and student enrollment for post-secondary education will all be slashed. If Oregon voters choose to allow further tax breaks, our system will lose hundreds of millions of dollars. In addition, Oregon’s less successful institutions will be consolidated or closed to save state funds.
This is a serious reality. Signature gatherers are selling these initiatives by saying they will balance the state budget. In reality, many signature gatherers for these initiatives are out-of-state recruitments from private organizations. The in-state signature gatherers are staffers from private consulting firms paid out-of-pocket by the individuals who are pushing these measures to be passed.
This is not democracy, folks. Nor is this a voter-driven initiative. Initiatives 6 and 14 will be implementing backwards policies.
What Oregon needs is a fundamental restructuring of our taxes as state revenue.
The implementation of a progressive tax in this state is the necessary step to insure a long-lasting sustainable economy. This is the only way Oregon can reinvest in the state’s instrumental and important institutions. The voters and the Legislature must prioritize this during next year’s session.
Ballot Initiatives 6 and 14 will destroy our state institutions. The state’s economy will fail without these institutions and residents will suffer the losses of education, security, social services and public safety.
Please do not sign these initiatives unless you’re comfortable in supporting all that Oregon will lose when they pass.