Which Oregon?
Jeff Alworth
Ah, the beginning of the legislative session, that delicious moment of anticipation, when even the dourest cynics let pass the fleeting thought: maybe this year will be different. Just days after Speaker of the House Karen Minnis dispatched with a 146-year-old House rule wherein procedural disputes are settled by a nonpartisan clerk (and puts the power in Minnis' hands), the Speaker noted yesterday: "It is time to come together to solve Oregon's problems. I have faith that we will be able to meet that challenge." And heart cockles around the state were warmed.
But for realists--never mind cynics--it was a fleeting thought indeed. Because no matter what the language of our leaders takes, Oregon is confronted by two opposing styles of governance--and two very different models of what the state should look like. Examples abound, but flipping through the paper this morning, I found four examples:
- Calls to the state's child welfare agency are up 17% in two years;
- Despite outright lies to the public, Texas Pacific still entertains hopes of buying PGE;
- In adjusted dollars, the state spends less on schools now than it did in 1991;
- Measure 37's consequences are unstudied, unpredictable, and potentially catastrophic.
Forget for a moment the details. In each case, disputes are characterized by, on the one hand, proponents who believe state services and regulations serve the interests of the citizens, and on the other, proponents who regard services and regulations as the problem, the cancer that needs cutting.
The Republicans won't cop to their own, position, though, and this is the major problem. They simultaneously feed red meat to the base--the "starving government" business--but also recognize that a trickle of money must go to popular services if for no other reason than to keep up appearances. What results is an anemic polity of slowly eroding services--crumbling schools with ballooning class sizes and falling test scores, privatization of essential services and utilities, social service agencies compelled to do more with less. All the while problems worsen, and that too perversely benefits Republicans: it bolsters cynical claims that those agencies aren't doing their jobs and should have less, not more, money.
It's not actually clear what vision, if any, Republicans have for the state. What's more obvious is what their policies will produce. Over the long term, Oregon will be just another poor state, dependent on the largess of capricious business to attend to the services the state can no longer provide. And which businesses will be attracted to a state with poor schools, police, and infastructure? The GOP vision is a race to the bottom.
The alternative is politically painful. We have consider what we'd like Oregon to look like, and then pony up the money to pay for it. This may mean higher taxes for some Oregonians, but it certainly means a serious overhaul of the way we collect revenue. It means looking, agency by agency, at what real needs are, not just what we can afford. It means making priorities. Do we favor tax cuts or good schools? You can't have both.
The choice that Republicans offer is a false one. In their vision, you can either have a booming state with very little government, few services, and low taxes or you can have an impoverished state with a massive, topheavy government impeding people from realizing the joys of an "ownership society." The truth is closer to the opposite. You can either have a state where you pay for nothing and receive nothing, and from which businesses flee, or you can have a healthy government that educates, protects, judges, and maintains, and to which businesses will be pleased to come.
As the legislature moves forward, let's ask the question: which is it?
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Jan 11, '05
Jeff:
First, a correction that is obvious but worth noting...fortunately, Karen Minnis is NOT Secretary of State but Speaker of the Republican-controlled House. I seriously doubt that Mrs. Minnis (I use the traditional prefix Republicans seem to prefer) could be elected to statewide office but hope she'll give up her Legislative seat one day to try!
Second, in terms of the choices ahead and the process...heartening words from Dr. Alan Bates, state senator from Ashland, were spoken on last night's news soundbites from day 1 of the session. He talked about prodding Democrats to have an open and transparent debate on these issues; not deciding them in some closed-door backroom meetings. This is a good start and a commitment I hope all the Ds will adhere to.
As for the solution, let's start with taking a whack at this state's imbalanced tax structure. No, not a sales tax but revision of our giveaways to large corporations. They have been going "off-shore" from Oregon for years and still we kowtow to them like there's no tomorrow.
Our state now ranks next-to-last in corporations' income tax paid as pct. of revenue (on a per-capita basis) and conversely, we are the no. 1 state in terms of individuals' paying disproportionally higher taxes vs. corporations. The average Joe is over-taxed! But this is because our big business is woefully undertaxed...
To the doomsayers who suggest we can't send "another negative signal" to business, I say: grow up. I have worked at a very high level in several major corporations and as has been argued many times before (by themselves!), what they want from Oregon is stability, funding for schools etc. just like the rest of us. Of course, they will lobby for handouts - that's the way the system works.
The other way the system is supposed to work is for lawmakers to occasionally tell them "NO"...let's hope the Ds can make the Rs understand this in the upcoming session and perhaps the opening day optimism may be justified this year.
12:11 p.m.
Jan 11, '05
Andrew--thanks for the heads up on my brain malfunction. Error corrected.
Jan 11, '05
"Now that we know where Texas Pacific wants to take Portland General Electric, may we now see a realistic, viable proposal from the city of Portland.
What are we waiting for?"
Editorial, The Daily Astorian, Jan. 10, 2005
http://www.dailyastorian.info/main.asp?FromHome=1&TypeID=1&SectionID=23&ArticleID=21431&SubSectionID=392
Jan 11, '05
Bravo Jeff and hear, hear, Andrew!
What you guys said.
Jan 11, '05
Here here!
We have to get people to start thinking about taxes differently. First of all, Intel and Nike aren't going to leave Oregon if the corporate tax is increased. And because they won't leave, all the businesses that are built up around them won't leave.
Lots of wingnuts cry wolf when business taxes are brought up. A perfect example is the Oregon Restaurant Association. That's their job: to scream and yell and threaten, just like they did when the state wanted to increase its measly take on gambling machines. Have the tavern owners fled?
We need to call their bluffs everytime they make them. And Karen Minnis is just a farce as far as I'm conserned. When Dems wanted to change the state's computer systems to open source to save money and protect the system from viruses, Minnis freaked. She's just a Microsoft b*tch. She claimed that it would hurt Microsoft and since Microsoft is based in Washington it would hurt Oregon business. What? She's a piece of work.
3:41 p.m.
Jan 11, '05
Apropos of what Sid writes, be sure to check out Tim Nesbitt's commentary of a few weeks ago if you missed it. Revolutionary.
Jan 11, '05
I been stating that tax compliance, then tax reform; is the number one issue for this state.
Jan 11, '05
Sid - I can only comment since I know some managers at Intel and no - they won't leave. However, when it comes to new plants, Arizona and NewMexico will look that much better. Intel has always been a good citzen and paid taxes and contributed to the community. If you think putting the screws to someone like Intel, who is a A++ employer, is really the way to solve our problems, I respectfully disagree. I think you mistake kindness for weakness.
My solution - Have government give me some proof of any cost-cutting efforts (besides taking it out on school kids) and I will consider voting for new taxes. Sorry, the normal mode in the private sector is an ongoing battle of doing more with less, so this should not be an alien concept to the public sector.
Jan 11, '05
Andrew,
There could be two reasons for this pattern: Our state now ranks next-to-last in corporations' income tax paid as pct. of revenue (on a per-capita basis) and conversely, we are the no. 1 state in terms of individuals' paying disproportionally higher taxes vs. corporations.
It could be, as you argue, that average Joe is overtaxed and corporations are undertaxed.
Alternatively, it could be that our corporate tax base is woefully small because we have too few major manufacturers, industries, and corporations, and we are not exactly encouraging new companies to locate here. (The recent article in either the WWeek or Oregonian comparing the successful bio-tech corridor in Seattle to Oregon's up to now failed attempt is apropos.)
I don't know the answer, but I suspect things are not as simple as yanking up the corporate tax rate.
Jan 11, '05
prof, the oregonian article simply pointed out that the two cities were taking different approaches. seattle has a huge headstart in biotech; the "dead zone" for biotech it's creating south of lake union is based on birds already in hand. portland is starting from scratch, going for a different sort of biotech biz, and trying to integrate it into a new residential/office neighborhood. Portland is using its strength, namely planning, to play catch-up. Seattle is relying on its size and major research university and hospitals. the article didn't predict who would win, it simply pointed out the different approaches.
8:51 p.m.
Jan 11, '05
TAX ISSUES:
I gear up for another tax season starting next week at a Portland firm, and I just wanted to state certain realities concerning the world of taxation and economic development.
Businesses don't pay tax on money they spend. They pay tax on amounts left over for future expansion and shareholders. But these expansion and shareholders are not isolated to one state. That's why research has shown ZERO correlation between taxes and employment across the 50 states.
% of state revenues from corporate tax ranges from 1-5% except in Alaska where it's really high. Oregon sites in the middle at about 3%. But it's not a matter of taxing corporations--it's a matter of taxing businesses. We have very cheap alcohol licenses. We have the worst property tax giveaways.
The best taxes to levy on business target our state's comparative advantages. The timber industry won't ever outsource to AZ or NM. Intel cares more about good employees than it does tax breaks--the tax incentives should cater to workers, not big business.
We rank #1 in generating % revenues from one tax source--you guessed it, personal income taxes. Plus we have 70% of taxpayers sitting in the highest tax bracket of 9%. We have the 10th most "business friendly" tax system, but the 49th worst unemployment. Plus, Measure 5 & 50 killed our property tax revenues.
We will never have legitimate tax increases in this state until we target specific businesses, levy property taxes on MARKET value instead of this crap nominal value system, and smooth out the tax brackets.
MORE BUSINESS TAXES MORE PROPERTY TAXES LESS INCOME TAXES
Where are the Progressive Measures!!!
Jan 11, '05
toon, I read the article quite differently from you. I read it as pointing out how Seattle's many advantages and more relaxed planning has already resulted in a biotech boom that is likely to continue, while Portland's is quite unlikely to succeed.
The example they used was the Schnitzer family donating its land in Portland and basically walking away from the biotech corridor, yet dedicating millions of dollars to just such an effort in Seattle.
2:05 a.m.
Jan 12, '05
Anyone have a link to the aforementioned article on biotech?
Jan 12, '05
Maybe this is the link? http://www.oregonlive.com/business/oregonian/index.ssf?/base/front_page/1098446573156040.xml
Jan 12, '05
Jenson, You need to specify if you mean more business property taxes. Measure 5 passed in only the NW quadrant of the state (where the most voters are) and it passed partly because people of modest means who may have lived in the same house for decades struggled to pay property taxes.
I am all for progressive measures, but you'll never get anywhere claiming that every Oregonian who owns their own home can afford any level of property taxes--esp. with the level of unemployment, underemployment, fixed income in this state.
Go after 2nd homes and business property (the folks who get tax breaks after the current system), rather than going after Mom & Pop or the young family lucky to be homeowners instead of renters but barely hanging on by their fingernails financially. Claiming those folks don't matter because it is all about economic theory should be the Republican message, not the "progressive" message.
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