By State Rep. Betsy Johnson (District 31)
Two days after the 2003 Oregon Legislature
adjourned on Aug. 27, tax opponents launched a
referendum drive to place the temporary income
tax increase on a statewide ballot in hopes that
voters will reject it and undo much of the Legis
lature’s bipartisan negotiated compromise during
the record-length session.
House Bill 2152, adopted by the lawmakers
and signed by Gov. Ted Kulongoski last month,
will enact a three-year income tax surcharge - a
surcharge on existing tax liability - to balance
the 2003-05 budget. The revenue package will
raise $792 million in the current biennium, most-
. ly from taxes paid by higher-income households
and businesses in 2003 and 2004. It will raise
another $332 million in the following biennium
. from the same sources, if needed.
The surtax will cost approximately $36 a year
for a household with $41,000 income, which was
the median level in Oregon in the 2000 Census.
The median means half the households were
below the income line and half were above. If
you count the massive federal income tax cut,
total income taxes in Oregon won’t increase -
even with the planned surtax. (For a detailed tax
table based on household income, visit my web
site: www.betsyjohnson.com).
A mixed coalition has gone on record in oppo
sition to the tax increase package. Two conser
vative political groups, the Oregon Chapter of
Citizens for a Sound Economy and the Taxpay
ers Association of Oregon, are trying to gather
50,420 valid signatures before the Nov. 25 dead
line. If the referendum qualifies, it will appear on
a Feb. 3 special election ballot.
The revenue package enacted by the Legisla
ture in House Bill 2152 is only a temporary solu
tion to the state’s budget crisis. I supported it be
cause it is a fair and balanced approach to re
covering some of the revenues needed to keep
schools open, keep our communities safe and
maintain services for the elderly, the poor and
the disabled.
The state’s continuing economic crisis, which
resulted in another $1 billion revenue drop dur
ing this year’s session, eventually turned the
talks to a temporary tax increase. After months
of debate and negotiating, a temporary tax, sim
ilar to one enacted during the financial crisis in
the 1980s, appeared to be the inevitable solution
to balancing Oregon’s state budget in the face of
falling tax revenues. Moderate Republicans re
solved the Legislature’s long budget stalemate
by teaming up with Democrats, who are a mi
nority in the House and control the governor’s of
fice, to push the surcharge through.
Here is why we believe this package is fair
and balanced:
Higher-income households will pay
the largest share of individual taxes
Individuals will pay more via an income tax
surcharge and reduced discount for early pay
ment of property taxes. But most (60 percent) of
the increased taxes paid by individuals will come
from households with incomes above $100,000
per year.
Businesses will pay more
Businesses will be required to pay more via
new minimum taxes, the repeal of certain tax
breaks and temporary reduction of tax credits.
All told, businesses will pay 34 percent of the
new taxes, compared to approximately 17 per
cent of the state’s general fund taxes that they
presently pay. Small business owners, including
S-corps, partnerships and sole proprietors, will
pay 12 percent.
All families will see a reduction in
overall federal and state taxes
All households will see a reduction in their
overall taxes due to new federal tax cuts. The
new income tax surcharge is designed to work
with the new reductions in federal income taxes
to ensure that every Oregon taxpayer still gets a
reduction in taxes paid overall.
Oregon is caught in a downward fiscal spiral
that threatens our economic future and our qual
ity of life. We have learned through bitter experi
ence that we will never regain our economic
footing or begin to compete successfully in a
fast-paced global economy with shorter school
years, substandard services and courts open
four days a week. We are facing a political crisis
of trust in our tax system and an economic crisis
of viability in our public service system.
If we fail to achieve consensus on how to pay
for the public services we need for a healthy
economy and a livable society, we will never re
gain our economic vitality and may soon lose our
livable communities.
The Legislature passed a measure to con
vene a special legislative session on tax reform
next June, after an interim panel drafts recom
mendations on overhauling the state’s tax sys
tem, which has come to rely heavily on revenues
from personal and corporate income taxes. I sin
cerely believe that the need for revenue-raising
tax reform in our state is so great, and the con
sequences of failure so dire, that we must keep
an open mind about which of the many poten
tially acceptable long-term options can succeed.
We must also build a process to receive ideas
from as many Oregonians as possible before
charting a final course of action.
The leaders of the referendum do not like to
talk about how they would balance the budget if
the tax surcharge is defeated, however, the ef
fects must be considered. Defeat of the tax in
creases would result in automatic budget cuts.
To begin with, basic services - including educa
tion, health care, public safety, seniors and work
force training - will be seriously compromised.
Not only will there be major cuts in public servic
es, there will be a return to the discredited policy
of emptying every reserve fund and mortgaging
our state’s future through borrowing.
Here’s where the $792 million in budget cuts
would be made:
K-12 schools - $414 million
Human services - $273 million
Public safety - $94 million
Higher education - $11 million
When someone asks you to sign the referen
dum petition to repeal the income tax surcharge,
ask them if they have an alternative plan for the
state to “live within its means.” Ask them to be
specific and do the math. If they can’t give you a
real answer, I hope you will seriously consider
your support or opposition.
Rep, Betsy Johnson
P.O. Box R, Scappoose, OR 97056
Phone: 503*543-4046
www.betsyjohnson.com
' X-., ;
Don‘t sign petition to Thanks for help with
harm our children
school supply project
To the Editor
Some things are worth pay
ing for. Our children, and their
education should be of para
mount importance to us all.
Our schools are suffering.
They are overcrowded and
most certainly under funded.
O ur Oregon Legislature
worked overtime this year to try
and put together a school fund
ing package. The end result
was still inadequate, but result
ed in a temporary tax increase.
Now someone wants to stop
this funding altogether. They
must hate schools since they
are trying to circulate a petition
to put an end to our schools tax
support.
Please don’t sign this peti
tion. We need our schools and
we need public education.
O ur children deserve our
support.
Sincerely
Thank you to Bank of Ameri
ca, Rainier Branch for the do
nation of $150.00 to the School
Supply project in 2003.
Your donation enabled us to
purchase several needed sup
plies, which will be shared by
all five of our School Districts,
for students who are unable to
afford the necessary school
supplies to begin school ready
to learn.
Your generosity is appreciat
ed and will make the first day of
school a positive experience for
many young people throughout
Columbia County.
By working together we can
help change a lives in our com
munities.
Sincerely,
Kathye Beck
Executive Director
United Way of Columbia
County
Bill Eagle
St. Helens
Nice example of courtesy by public official
Ed. Note: The INDEPENDENT does not consider itself a partner (see let
ter below) with the legislature, simply an observer, insofar as our small
staff allows, and occasional commentator. The reason for publishing the
following letter is to use it as a far too rare example of courtesy by a pub
lic official toward a part of its constituency that m ay not be supportive, and
may even be critical at times. Such courtesy on the part o f local officials
would have alleviated, if not eliminated, the controversy that is currently
causing discord in Vernonia.
Dear Members of the Media,
I want to thank you for your contribution to the 2003 General
Legislative Session. You in the media are our partners in the Leg
islature, keeping the public informed of what we do in the Capitol
and explaining how it affects Oregonians.
It was a difficult time for all involved with and in the Legislature.
Though history will ultimately decide how we did, your chronicling
of the events will undoubtedly play an important role in how we
view our accomplishments and regrets.
Many significant and good pieces of legislation were passed
and will become law. It took team work to make this happen and
you were part of that team. You played your role well and we are
better legislators for having worked with you.
Thanks for hanging in there and enduring what was a chal
lenging legislative session.
Respectfully,
Peter Courtney
President of the Senate
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