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Senate seeks sales tax alternative
Fadeley’s committee wants sales tax ‘unconstitutional’
By Brooks Daref!
Of tha Emarald
Having done its best on
Monday to dispatch the five
pages of sales tax legislation
to the dust bin of history, the
Select Committee on Con
stitutional Revision of Finance
will focus its energy on sen
ding to the Senate floor an
alternative plan to generate
property tax relief, one that
will probably hinge on increas
ing income tax revenue.
On Monday the select com
mittee endorsed the proposal
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of committee-creator and
Senate Pres. Ed Fadeley, D
Eugene, to declare unconstitu
tional the imposition of a sales
tax as a means of generating
state revenue.
The proposal does not rule
out the fourth part of an alter
native plan discussed by the
select committee over the
weekend, which officially pro
vides counties and
municipalities with the power
to levy any tax, including a
sales tax.
A Senate vote on the select
committee proposal has not
yet been scheduled, said Mary
Beth Allen, an aide to Fadeley.
On June 18 the House pass
ed a sales tax package by just
one eleventh-hour vote, when
House Minority Leader Larry
Campbell, R-Eugene, switched
his vote just before House
Speaker Grattan Kerans, D
Eugene, was about to let the
gavel fall. The 4 percent sales
tax package is estimated to
relieve property taxes by about
45 percent.
The select committee’s pro
posal could be the beginning
of the end of the game of hot
potato the legislature has
played with the sales tax, but
play could continue with the
general question of property
tax relief.
Fadeley hopes to have all
work on unfinished bills com
pleted by the end of next
week, says Allen, except for
the question of property tax
relief and the overall balancing
of the state budget.
If the Senate passes the
select committee's proposal
to declare a sales tax un
constitutional, any alternative
property tax relief package
prepared by the committee
would be sent to the Senate
floor. If it passed, it would go
fo the House where sales tax
support would undoubtedly be
enough to defeat it, says co
author of the sales tax legisla
tion, Rep. Tony Van Vliet, R
Corvallis.
At that point joint con
ference committees would at
tempt to draw up some alter
native to the tax relief
package, which would then
have to be approved by both
the House and the Senate,
says Allen.
To complicate the situation
further. Gov. Vic Atiyeh has
said he'll call the legislature
back into session if they don't
come up with what he con
siders to be a responsible pro
perty tax relief package.
Atiyeh may not accept a
public referendum which
would "put a gun to the peo
ple's heads," and pass the hot
Emerald photo
Senate Pres. Ed Fadeley's select committee is out to ban a
statewide sales tax
potato of property tax relief to
the general public, says Allen.
Atiyeh's plan calls for an ex
pansion of the Homeowners
and Renters Refund Program,
which he has dubbed Super
HAARP
Agreement on an alternative
property tax relief plan will be
extremely difficult to attain,
because both businessmen
and the powerful Oregon
Education Association sup
port a sales tax, says Allen.
The OEA wants to head off a
no-holds barred,
proposition-13-type, anti
property tax movement that
they fear could result from a
watered down or non-existent
property tax relief plan, says
Allen.
The key to Fadeley’s proper
ty tax relief plan is an income
tax increase of 0.5 percent on
adjusted gross income that
would generate about $277
million, says Allen.
Fadeley’s plan would
eliminate tax loopholes and
tax shelters and drop the cur
rent income tax exemption
figure from $7,200 to $5,500 —
raising another $326 million.
Add this to the $175 million
already allocated for HAARP
and the total amount of pro
perty tax relief, totalling $778
million over the biennium, is
about 50 percent of what the
sales tax plan would generate
in relief.
Allen says the figures can
be deceiving. Fadeley doesn’t
think adding an additional tax
— the sales tax — really ends
up lowering taxes for the ma
jority, says Allen. This is
especially true because a
sales tax hits middle and
lower-income people the
hardest.
Q0P| pQ Continued from Page 3
of other ASUO organizations.
In that vote, students over
whelmingly decided that
OSPIRG be supported by a per
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from student incidental fees.
Most ASUO groups submit
budgets to the Incidental Fee
Committee for approval.
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