Great, When in a bad economy, increase taxes and spending!! The the minimum tax, see how I can pay up to $5000 when I did not make a dime. Does sleepy ted even know how private business works? Like everyone drives there profit to zero in the company to avoid taxes, taking it in personal income? Jeez Ted, you are a real winner. What about the $18 billion shortfall in PERS?

I can accept the school of thought that more spending in a recession is an acceptable practice. My question is this, when the recession is over, are they going to roll back the spending?

Healthcare - please tell us all how taxing hspoitals and healthcare premiums makes health care more affordable? Leave out the claptrap about how the federal matching dollars will be "lost". the average Oregon helath insurance carrying family should not have to bear additional cost pass throughs in order to expand OHP.

Cigarette Tax - making the costs of tobacco hopelessly high is a non progressive tax on the low income. Just who is more addicted, the smokers or a tax hungry legislature?

Transportation - raise my fuel tax along with a corresponding removal of the full employment tax for fuel attendants and I'll go for it. Triple my vehicle registration tax and I'll file a petition for iniative disqualification.

Business - a complete discussion of the corporate mnimum tax is due the citizens before any legislative changes.

But revenue is NOT necessarily profit. What we are saying is that we are comfortable taxing business entities w/o taxable income. Are we also comfortable assessing a minimum tax on individuals who have no taxable income? I am betting NO.

Can we please STOP referring to revenue when we talk about this topic. Your tax rate is not determined by your revenue. My tax rate is not determined by my revenue. It is based on TAXABLE INCOME.

Posted by: mp97303 | Apr 27, 2009 1:55:24 PM

I can accept the school of thought that more spending in a recession is an acceptable practice. My question is this, when the recession is over, are they going to roll back the spending?

There has been a problem for years that people have complained about "spending" but never run a candidate (or for that matter even had a legislator say this during a legislative session) say "Please support my effort to cut the wasteful ........".

Many of us would welcome a concrete proposal (in print, online, etc so that folks could examine the details) of ways to balance the budget by cutting spending. I watched the Ways and Means hearing broadcast from the capitol the other day. If anyone wants to specify which spending items discussed there should be curtailed or eliminated and why, I would be glad to listen.

People do have the right to ask whether a particular cut is penny wise and pound foolish. Apparently programs to help in case of pandemic alerts were in the US House version of the Recovery Act but not in the Senate version. So the funding was not in that bill earlier this year. Was that a wise decision?

There are people who think certain agencies need to be restructured. One example might be TSPC which licenses teachers with a certificate renewal process that is so bureaucratic that the red tape of the IRS (or for that matter the VA ) is in some cases no worse.

There are public administrators in this state whose pay packages need to be examined. For instance, why does a top central office school administrator being paid over $100,000 need a car allowance rather than submitting mileage for reimbursement like outside sales people do?

But the "we must cut spending" folks don't talk in that level of detail. They seem to think slogans cut spending.

mp97303, truth is that budget cuts happen in the state budget when such cuts, in bill form, get 31 votes in the House and 16 votes in the Senate. Honest legislators are the ones who say publicly "I can support a cut to ---- in these tough times, but I believe that ____ is essential and will support a tax increase to pay for it."

Anything else is sloganeering.

Thanks Sal

After 16 years owning businesses in Oregon, Texas and Arizona, and an accounting degree, I had no concept of what a corporate entity was. Thanks for the enlightenment.

I'm still waiting for the Governor to explain how taxing health care makes it more affordable. Let me guess ... it has something to do with "free" money from people who pay Federal income taxes ...

TJ

From the OregonDOR site:

Excise tax is a tax for the privilege of doing business in Oregon. It is measured by net income. All corporations doing business in Oregon must file an Oregon corporation excise tax return and pay the $10 minimum excise tax. Corporation excise tax laws are in Chapter 317 of the Oregon Revised Statutes.

Sal, I like your approach to the issue at hand regarding health insurance in Oregon. The incramental approach is, in my opinion death by a thousand paper cuts and guaranteed to add to the problems rather than make them better. A good friend of mine who is a benefits broker said in 1999 that the train wreck was unavoidable in healthcare unless we took bold action.

My proposal:

1. Establish a minimum acceptable insurance plan that includes preventive care, prescription coverage and hospitalization. This could be patterned after the existing OHP.
2. Establish a payroll tax of 8% split equally between employer and employee to fund the Oregon Health Insurance The tax includes ALL emploment in Oregon (public/private) and is the base for the minimum program that all citizens are party to.
3. thos not working or incapable of working will pay a sliding scale amount into the fund for coverage.
4. All citizens are covered and must enroll in some form of the plan (kind of like MA)
5. The Fund operates to provide coverage payment to a variety of insurance providers who agree to accept all who apply w/out pre-existing condition clauses.
6. The minimum plan meets all federal ERISA and Medicare requirements to allow HRA's and HSA's.
7. Employers and unions can bargain for buy up provisions that are also available to the general public.

This suggestion sets the bar such that federal dollars are still brought into the state, all citizens are covered and the employer is releived of excess payroll costs. Current employee plans are maintained at a cost just about equal to what they currently pay.

ddave:

Your remark about the $18 billion shortfall in PERS is misleading. There is no shortfall in PERS. All benefits are being paid and there is ample money to pay future benefits. The $18 billion shortfall is a theoretical number that is based on having to pay for every single member of the system retiring now. It is an "actuarial shortfall" that is amortized over 20 years and can rise and fall completely with the market. As in 2003 when the system faced a $16 billion shortfall, the market recovered all of it plus an additional $8 billion placed into reserves. The reforms of 2003 did little to reduce the actual shortfall, but it let legislators feel like they did something positive.

You need to recognize that the Oregon Supreme Court has four times recognized PERS to be a contract that cannot be changed retroactively or willy-nilly. This is a contractual obligation created by the legislature for all public employees whose employers belong to the PERS system. Benefits cannot be cut and all new members of the system (since 2003) already receive drastically reduced benefits. The Tier 1 membership - the only members with a guaranteed rate of return - constitute only about 40% of the system now (down from 70% in 2003) and will decline to practically 0% within the next 10 years. The recent downturn of the stock market has reduced the funding level from about 112% of obligations to 80% of obligations to pay all benefits to all members over perpetuity. There is no need to alter the system as it will self-correct in place on its own.

PERS is the most misunderstood system in Oregon, and commenting on its "shortfalls" without commenting on the mechanisms in place to self-correct those shortfalls just contributes to the confusion. It adds only heat, no light.

Hi All~

I'm down in Salem working to pass the 4% provider assessment with the group, Save the Oregon Health Plan along side health care activists with the SAFE (United for a Healthy Oregon--Sustainable Available Funded * Effective) Coalition.

When our folks first read the article, we were hoping Wong had it wrong. We were concerned that the hospitals may have made some midnight deal that would have meant big trouble, as that percentage would have raised NOWHERE near enough money to fund OHP.

After checking with key members of the provider tax negotiation team, we were reassured that no such deal had been struck. HB 2116, which is the vehicle for both the provider tax and for the proposed expansion of Medicaid, have moved out of the House Committee on Healthcare WITH NO NUMBERS ATTACHED. And so Wong (and by extension Carla, not her fault, however—she’s just reporting what he wrote) got it wrong when she wrote:

"Health Care Provider tax: House Bill 2116, pending in the House Revenue Committee, now proposes taxes of 1.5 percent on net patient revenue of the 25 largest hospitals, an increase from the current 0.63 percent, and 1.5 percent on managed-care and other health insurance plans. The taxes were removed from House Bill 2009, pending in the joint budget committee, which incorporates other recommendations by the Oregon Health Fund Board for change in Oregon's health care system."

And when he wrote: "Kulongoski originally proposed to raise the hospital tax from 0.63 percent to 4 percent of net patient revenue of the 25 largest hospitals. The current tax bill proposes a rate of 1.5 percent, the same as what health insurers would pay. Because of recent changes in the matching formula, Oregon will not have to put up as much as Kulongoski originally proposed, but will recoup more in federal aid."

The question that remains is whether the hospitals will step up (the way the have in other states with 5% provider taxes) to pay their fare share. In order to qualify for ANY federal matching funds, hospitals must pay at least .63% into the fund. This is where Oregon hospitals are right now – paying the VERY MINIMUM in order to receive the federal match. The maximum rate that can be charged is 5.5%. With only a 4% tax, the hospitals will help the insurers and other healthcare providers leverage over $1 billion in matching funds.

We can’t talk increased access, never mind 100% access, without a real plan to leverage these funds. The 4% provider tax does this.

And last, I can't help but to make this next point: The proposed provider assessment, is really more of a hospital/provider LOAN program, than it is a true tax. Hospital money is leveraged to access federal funds. But the goal of the current bill is to make sure providers get that money back into their budgets. For financially healthy hospitals, this is no problem for evident reasons. For those that are not above 4-5% operating margin, they will be leveraging their dollars to help bring in the max match from the feds and then will get their money returned on the back end.

Hope this clarifies things a bit.

On the other hand, as The Oregonian reports this morning, the legislature is moving to give school districts the authority to do any damn thing they please to cut expenses, with both D and R legislators making the usual noises about shared sacrifice and tough choices.

Yep, flushing my child's education down the toilet is a sacrifice and a tough choice, but congrats to the legislature for having the courage to do it.

And hell's bells, why bother with quality education anyway? My grampa sure didn't need anything fancier than the Three R's to get that job in the sawmill.

Kurt:

Why tax only payroll? Why not an income tax as well so that those deriving their income from dividend, interest, investment also pay in? Or does the insurance only cover wage earners and leave everyone else to either buy their own or go bare? Seems that it would be unfair for a minimum wage worker and their employer to subsidize and investor making hundreds of thousands.