January 10, 2004
Legislators outline tax questions
By Randi Bjornstad
Two state legislators - both Republicans - came down on opposite sides of Measure 30 at a local debate Friday, expressing views that may well mirror the quandary many voters face going into the Feb. 3 special election.
At the end of last year's record-long session, the Legislature adopted a combination of personal, business and other taxes aimed at raising $800 million and avoiding further budget cuts to education and other services. But tax opponents launched a successful petition drive, sending the issue to a statewide voter referendum.
During a pro-and-con appearance at the Eugene City Club, Rep. Jeff Kruse took the point of view that despite severe budget cuts, the state must eradicate inefficiency before allowing any increases in income taxes.
"But every program has a constituency, and it's really hard to get at that," said the Roseburg-area farmer, whose House District 7 takes in portions of Lane and Douglas counties. "I'm afraid that passing Measure 30 will make it even harder to get to efficiency in government."
Not so, said Sen. Frank Morse of Senate District 8, which covers parts of Benton and Linn counties. Last year's Legislature took strong measures to control spending, including eliminating a thousand positions from state government, withholding $86.5 million in merit increases and doing away entirely with many boards and commissions, including those dealing with Asian, Black, Hispanic and women's affairs, he said.
Part of the Morse Bros. Inc. construction family, the Corvallis-based businessman said approaching the issue from a business instead of a political standpoint persuades him that Measure 30 should pass.
"Oregon's income system is the most volatile in the United States - 75 percent of our (revenue) comes from income tax," Morse said.
On top of that, only four states in the country - Oregon among them - operate without a "rainy day fund" to get through troubled economic times, "and that's how we got into this mess," he said.
The attitude of many legislators changed dramatically during last year's session, leading to passage of the tax measure now subject to referendum, Morse said.
When lawmakers learned how large the state's projected deficit would be, the attitude began to change from a mantra of "living within our means" to adding back some funding to provide for basic services, he said.
"The collective attitude then was to fund programs and services at the lowest levels we could to survive as a state, and then figure out how to fund that amount," Morse said. "It's time to come together, to stop being cynical (about state government) and solve Oregon's problems in a pragmatic way. Yes on Measure 30 is the way to do that."
Kruse responded that voters shouldn't be swayed by doom-and-gloom financial forecasts.
"All we heard last year with Measure 28 was that if it failed, the sky was going to fall," he said, referring to a temporary income-tax measure turned down by voters last January. "It was defeated, and the sky didn't fall. So far, the impacts are not as bad as people said they would be."
Raising taxes will never solve Oregon's problems - only "growing business" and reducing regulations on development will, Kruse said.
"Oregon has become unfriendly to business. A tax increase is not the way to grow the economy, especially on top of the minimum-wage increase. What message does that send to business? We need to send a different signal. We can't tax our way out of this situation, we have to grow our way out."
But Oregonians don't find themselves in a worse tax situation than people in most other states, Morse said.
In 1989, the overall tax burden in Oregon was 12.1 percent, and by 2000, that had dropped to 10.5 percent. That compares with a national average tax burden of 11.2 percent. Taxpayers in 32 other states pay more of their income in taxes than people in Oregon, he said.
The question facing this state is "do we have a spending problem or a revenue problem," Morse said.