Tax Absurdities from PGE & Pacificorp

By Salvador Peralta of McMinnville, Oregon. Salvador is chairman of the Yamhill County Democrats and a member of the Democracy for Oregon steering committee.

Since Measure 5 passed in the early 1990's, 75 percent of Oregon's tax revenue comes from income taxes, making Oregon the most reliant state on income taxes in America.

The amount of income tax that Oregon's largest corporations pay has declined from roughly 25 percent of the state's budget in the 1970's to less than 5 percent today giving Oregon the lowest corporate tax rate in America.

It's the rest of us who make up the difference -- either in the form of inadequate funding education and social services, increased taxes, and corporate giveaways such as the one that allows private electricity companies like PGE and Pacificorp (aka Enron and Scottish Power) to bill Oregon ratepayers 8.5 percent for taxes that the companies are not actually obligated to pay.

These phony charges cost Oregon ratepayers $80 million in money that should have gone toward state taxes in 2000 and 2002 (the 2003 budget shortfall was $500 million) and more than $1 billion all told (i.e., more than $1000 per Oregon family).

Senate Bill 408, which has made its way out of the Senate on a vote of 26-4, could put an end to these phony charges. SB 408 "requires the PUC to examine whether there is a mismatch between taxes charged to ratepayers and taxes actually get paid. If there is a mismatch, the PUC will create an automatic adjustment mechanism which will more closely align the taxes collected and taxes paid." (source Citizen's Utility Board)

But this will only happen if Karen Minnis lets SB 408 out of committee without gutting the bill with amendments designed to render it irrelevent or that make the existing situation worse. One amendment currently under consideration would not only strip the PUC of some its existing regulatory authority in this matter, but would actually prevent any action from being taken on these phony tax charges for the next 4 years.

I'd like to encourage BlueOregon readers to contact their state representatives and senators, and ask them to tell Karen Minnis to give this bill an "up-or-down" vote on the House floor, and not to gut the bill with amendments designed to render it ineffective (or worse).

It's especially important that Minnis get pressure from people in her own caucus, so if you live in a "red" house district, call your representative, ask them to contact Minnis, and remind them that SB 408 is supported by Kevin Mannix and 8 out of 12 Republicans in the Oregon Senate.

Call Karen Minnis at 503-986-1200.

July 06, 2005 Posted in guest column.