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Editor's Notes: The tax rumble settles nothing

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Robin Doussard
Wednesday, January 27, 2010

The tax rumble is over. The Sharks beat the hell out of the Jets. But everyone woke up this morning bruised and battered by the fight. It’s hard to feel great, even if you win, when the street is covered with blood and you realize the fight settled nothing.

For weeks, the Yes lead fighter, Steve “Bernardo” Novick, and the No frontman, Pat “Riff” McCormick, have been tied at the wrists, knives in the other hand, circling and slashing one another on street corners everywhere.

With last night’s passage by the voters of tax increase Measures 66 and 67, the cops blew the whistle and broke up the $12 million rumble. By a solid margin, Oregonians decided to raise taxes on households with taxable income above $250,000, approved higher minimum taxes on corporations and increased the tax rate on upper-level profits.

Immediately after the Legislature in late June passed the new taxes — after shutting out reasonable voices like the Oregon Business Association —anti-tax groups promised to take the issue to the voters. In this corner: job-killing taxes. In that corner: deep cuts to state services such as schools and social services. Tony and Maria, the average Oregonians, got a nice Hobson’s choice.

The rumble was decided last night, but the gang war between the business and legislative leadership of the state rages. That rift is so deep that the Oregon Business Plan cancelled its annual winter summit after seven years, which brought together civic, political and business leaders from around the state to work together on important issues. And most of the newspapers around the state this morning referenced the deepening divide between business leaders and the Democrats who control the House, Senate and governor’s office.

The governor’s office sent out an email late last night when the results were apparent. “The election is over,” said Ted Kulongoski. “Tomorrow is a new day and we must make a commitment to put our differences aside and work together to make the best choices we can for Oregon’s collective future.” The Oregonian, which was against the tax measures, wrote in an editorial last night: "On Tuesday, Gov. Ted Kulongoski said he'd hoped to set up a post-election meeting of business, labor and legislative leaders for this morning, only to be told that they didn't want to be in the same room together.”

“It's disappointing and discouraging,” McCormick told the Oregonian. “The tone and tenor was often venomous, trying to pit the haves against the have-nots … [the business community now must figure out] how to participate in a system that's largely disconnected from us.”

So feelings are wounded, backs are turned. But in the words of my tender first boss: Are you dead? Then get back to work. Taxes have been voted up and down before. It can't stop the work that needs to be done to repair a state with record joblessness, stagnating wages and a host of other problems that include increasing poverty, declining education ... you know the list, and it is staggering.

This vote doesn't fix the overall tax mess that needs serious reform. This vote doesn't annihilate business. This vote doesn't permanently solve the ragged support of the state's public schools and universities.

On Monday, the Legislature convenes a month-long session. How about the Sharks and the Jets join forces and take on the "kicker," that crazy little law that kicks back money to taxpayers when the state economist guesses wrong on what tax revenues will be two years in the future and keeps the state from building reserves.

A rumble against Kicker Boy. I'd pay to see Bernardo and Riff tied together again for this fight.

Robin Doussard is Editor of Oregon Business.




Brian Libby
0 #1 Oregon is apparently saneBrian Libby 2010-01-27 11:11:44
Measures 66 and 67 received a lot of attention as bell-weather indicators of whether the nationwide populace is going left or right, but in terms of the validity of the measures, Oregon voters clearly recognized what a relatively tiny amount our more affluent citizens and corporations were being asked to pay. The tax burden of corporations as a percentage of the overall tax base has plummeted over the decades, and you don't have to be considered a bleeding-heart liberal to see that the scales were out of balance.
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Robin Doussard
0 #2 Update: Governor calls for kicker reformRobin Doussard 2010-01-27 13:49:27
Governor calls for kicker reform to prevent future tax increases and cuts to services:


“Simply put, it’s time to say “enough” to budgeting from crisis to crisis – “enough” to additional tax increases – and “enough” to a lack of stability in our budgeting process,” said Governor Kulongoski. “To stop this roller coaster budgeting, we must require the state to save more good times so our children’s education is protected and we are not asking Oregonians to pay more in taxes in bad times.”
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