Sponsored by Oregon Business

Get real, budget chiefs

| Print |  Email
Robin Doussard
Sunday, May 17, 2009

Come on, state budget chiefs. You owe the businesses and citizens of Oregon a lot more clarity on your tax-hike plans. And it should have been clear when you released your budget on May 18.

Trying to make up for a $3.8 billion shortfall, Portland Democrat Sen. Margaret Carter and Ashland Democrat Rep. Peter Buckley outlined balancing the budget with a mix of cuts, higher taxes and using federal stimulus and rainy day reserves, plus $800,000 in new tax revenue.

It is easy to see in their detailed spreadsheet where the cuts are, but it's impossible to figure out what they are thinking about new taxes because it's not there. Oh, a few general ideas have been floated, including raising taxes on households earning $250,000 or more, and the Legislature has been eyeing raising taxes on beer and cigarettes. But nothing even that specific was in the blueprint.

The Oregon Business Association has stepped up to provide concrete suggestions as to how businesses can step up to help the shortfall. (Associated Oregon Industries told me a few weeks ago that it's not ready to do the same.) On May 21, the Oregon Business Plan protested the proposals presented that morning to the House Revenue Committee that called for increasing corporate taxes by 42%, increasing corporate tax rates from 6.8% to 8.2% and creating a gross receipts tax as a basis for setting the corporate minimum tax, and issued its recommendations on what to do.

The co-chairs' vague statement that “businesses in our state that have prospered” would be targeted was just plain dumb. Now, whether you agree with that philosophy or not isn’t the point. It’s just bad leadership. What company in Oregon now feels good about “prospering?” Or even doing business here?

The Republicans, rightly, immediately pounced on that, saying the Dems are hurting the very businesses needed to help the state out of the recession, and that it will hit small employers hardest. The co-chairs, rightly, say they have a huge challenge on their hands to balance the budget and still provide critical services to many constituents. It’s a pretty thankless task.

But come on. How about thinking it through before you pour gasoline on the fire? You may still want to burn down the house, but at least you gave everyone fair warning.

Robin Doussard is the Editor of Oregon Business.





0 #1 Get real, budget chiefsskiptracer 2009-05-22 10:10:35
i saw that too about taxing "businesses in our state that have prospered." Moronic. That's just fear inducing in any business that's doing okay. But at least it's not as bad as the Willie Week eyeballing my mortgage interest deduction. Yeah, that's a good idea to target the remaining stable base of lower-middle-cl ass home owners state wide.
Quote | Report to administrator
invest in the future
0 #2 invest in the future 2009-05-28 06:06:08
You are right to demand a focused debate on income creating options. Vague references and behind the scenes negotiation hardly bring credibility to Oregon government.

Equally important is to ask for an evaluation of why the situation is so bad. Why are we so unprepared for a downturn and where is the leadership to put solutions in front of the voters to cushion such a downturn in the future?

We routinly heard that the business and personal income tax kicker must be sustained and that a larger rainy day fund for the state would be wasted. The oft heard mantra " I am a better steward of money than government. Give it back to me (biz or personal) and I will put it to work more effectively".

Now that government services for health, education and short term unemployment benefits are much higher.... we have limited resources to draw upon. This hardly seems to be an unpredictable circumstance. Is their a strong voice to change this situation? Where is the vocal state leader who is willing to hold accountable those who fought on behalf of the corporate kicker rebate?

Somehow, I believe, the business kicker which was sent in the majority of cases to out of state corporations would have served the corporations, their local employees and the state of oregon better, had it stayed here. Or put another way, if legislators are not willing to sustain the higher and understandable need for services in a downturn through a rainy day fund... what alternative will they put forward?

Oregon Business Magazine... please highlight efforts in this respect as well.
Quote | Report to administrator
Oregon Business magazinetitle-sponsored-links-02