Page A4
February 20, 2002
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Enron and Oregon’s Revenue Shortfall
C harles S heketoff
O regonians have good rea
sons to be m ad at Enron. Friends
and neighbors w ho w ork for
E nron subsidiary Portland G en
eral Electric saw their retire
m ent savings vanish. M oreover,
PG E cu stom ers paid electric
bills that covered the u tility ’s
paym ents to Enron for federal
taxes, only to find out that Enron
pocketed the money.
The recent reports that Enron
failed to pay federal income taxes,
and actually received payments
from the IRS, should not have
surprised anyone. An October
2000 report by the Institute on
Taxation and Econom ic Policy
showed that Enron was among
the 24 companies o f the country ’ s
250 largest corporations who got
money back from the IRS in
1998. The IRS sent Enron a
check using the taxes paid by all
other taxpayers, such as you!
D isclosure o f these abuses
can help close the loopholes.
A bout 15 years ago, C itizens
for Tax Justice reported that,
from 1981 through 1985, G eor
g ia - P a c if ic , U .S . B a n c o rp ,
W eyerhauser, and Boeing were
am ong 41 corporations nation
w ide that paid no federal taxes
or had negative incom e taxes.
Federal tax reform in 1986, d e
signed in large part by form er
U .S. Senator Bob Packw ood,
helped close m any loopholes.
by
By 1988, all but tw o o f the 41
freeloaders from 1981 to 1985
had to pay at least som e federal
incom e taxes. Enron teaches
us that the “loophole lobby” has
been busy ever since.
Regrettably, we do not know
w hich corporations doing busi
ness in O regon pay O regon
c o rp o rate incom e tax es and
how m uch. W e do know that in
1998 about half o f O regon’s
corporate tax collections cam e
from only 84 out o f 37,000
D oes this relate to O regon’s
current revenue shortfall? When
businesses escape paying state
incom e taxes, households must
pick up a bigger portion o f the
tab for governm ent services,
even those that create a good
business clim ate such as pri
m ary and secondary education.
O regonians need to know who
are good corporate citizens -
those w ho pay a fair share in
taxes - and w hich corporations
are escaping their responsibility
A Oregon needs to take on Enron
and the “loophole lobby” to protect
the small taxpayer who gets
“soaked, ” while the “loophole
lobby” succeeds in avoiding taxes, i
corporations doing business in
O regon. But because corpora
tions doing business in O regon
do not have to report publicly
how m uch they paid in state
incom e taxes, we have no way
o f know ing who pays and who
escapes through loopholes or
E n r o n - s ty le
a c c o u n tin g .
O reg o n ’s corporate taxes are
“tied at the hip” to the federal
tax code. Thus, the E nron news
should cause concern am ong
O regonians.
for funding necessary govern
m ent services.
Oregonians need a “Small Tax
payer Protection and G ood Cor
porate Citizen D isclosure Act”
that would require disclosure of
the tax liability o f O regon’s pub
licly traded, regulated, and large
businesses. O regon needs to take
on E nron and the “ loophole
lobby” to protect the sm all tax
payer w ho gets “soaked,” w hile
the “loophole lobby” succeeds
in avoiding taxes.
O regon is experiencing a rev
enue shortfall, exacerbated by
increased dem ands on state ser
v ic e s d u e to the re c e ssio n .
M oreover, the 2001 Legislature
passed a law changing the way
m u lti-sta te c o rp o ra tio n s are
taxed, giving tax cuts to a hand
ful o f large corporations. Politi
cians claim this is not the tim e to
increase taxes on their friends
in the business com m unity. Yet
we do not know which o f their
friends actually pay taxes. For
all we know, businesses’ claim s
o f econom ic hardship and high
tax burdens are as believable as
Linda L ay ’s claim that even she
and her husband, Enron execu
tive K enneth Lay, are now im
poverished.
W e know about E nron’s tax
m ischief because the federal gov
ernm ent requires publicly traded
corporations to disclose their
f e d e r a l ta x e s . O re g o n ia n s
should have access to the same
in fo rm a tio n a b o u t tax pay-
m en ts-o r the lack thereof-to
O regon. Then O regonians can
hold corporations like Enron
accountable for their actions.
Charles Sheketoff is the ex
ecutive director o f the Oregon
Center fo r Public Policy. He
can
be
reached
at
csheketoff@ocpp.org, OCPP,
P.O. Box 7, Silverton, OR
97381-0007, or by calling 503-
873-1201.
LETTER (O i l IE EDITOR
Legislature
Needlessly Gutting
the Oregon Voters
Pamphlet
Dear Editor,
The L egislature adjourned w ithout a House vote on this bill.
But it looks as if there w ill be another special session before the
end o f February, so my letter to you is still relevant. I have
revised the letter slightly to acknow ledge the adjournm ent.
The L egislature had so little to do during its first Special
Session o f 2002, that it turned to gutting the O regon V oters
Pam phlet. SB 1007, w hich the Senate passed by 18-12, would
rem ove over 90% o f the argum ents on ballot m easures from the
Pamphlet.
The expected Second Special Session will allow the H ouse an
opportunity to vote on this bill.
V oters need more inform ation about ballot m easures, not less.
Lim iting each side on a ballot m easure to a mere 650 w ords for
“Y es” and 650 w ords for “N o” (w ith each side having one 325-
word rebuttal) is far, far too little inform ation. It am ounts to about
one full page per side in the Voters Pamphlet. And the m echanism
for determ ining the content o f these argum ents concentrates
enorm ous pow er in the hands o f the G overnor and leaders o f the
House and Senate, who get to appoint the com m ittee that drafts
the “No” argum ent. If it is a m easure that office holders like (such
as a referral from the Legislature itself), they can appoint people
unw illing to craft effective “N o” argum ents.
This will only increase the need for ballot m easure cam paigns
to rely on expensive paid m edia and to rely on big contributors
to pay for that media.
Is it a surprise that the R epublicans favored this by a vote o f
14-2, or that the D em ocrats opposed it by a vote of 10-4?
Dan Meek; 10949 S. W. 4th Avenue, Portland, OR 97219
Based on Public Response, McDonald’s Out of Place in Eliot Neighborhood
Early this m onth, over 700
w ritte n resp o n se s arriv ed at
Portland’s Planning Department
- O ffice o f Planning and D evel
opm ent Review asking the o f
fice to reject the proposal to a
M cD onald’s d rive-thru restau
rant in the E liot N eighborhood.
The proposed site is at 3303 NE.
MLK, a block south o f Fremont.
It is surrounded on three sides
by housing in a historic district,
w ith all entrances and exits on
residential Cook and Ivy streets.
The message was that many
residents o f N orth/N ortheast
Portland feel that the proposal
falls short on community guide
lines, goals that emphasize neigh
borhood character and pedestrian
friendly development that does
not enhance the historic nature of
the neighborhood, and that is
sues o f livability and public safety
were not addressed. O f the livabil
ity issues, residents feel that traf
fic and trash will heavily impact
A
the neighborhood.
Friends of MLK is a group of
local citizens that is working to
foster a vibrant neighborhood by
encouraging business develop
ment that supports the goals laid
out in various development plans:
A lbina Com m unity Plan, the
Metro 2040 Growth Plan and the
I,
most recent Fremont/MLK Vision
Study. These goals include en
hancing the pedestrian environ
ment, encouraging mixed-use de
velopment, and striving to ‘raise
the bar’ for new developments on
MLK.
Along with the 700 responses,
the five area neighborhood as
A
so c ia tio n s: E lio t, Irv in g to n ,
Boise and King, have voted to
o p p o se
th e
p ro p o s e d
M cD onald’s. Finally, city o ffi
c ia ls
have
e n c o u ra g e d
M c D o n a ld ’s to th o u g h tfu lly
consider the opinions o f neigh
borhood and to w ork w ith the
local com m unity on this issue.