Lights out at a Brighter Oregon

Chuck Sheketoff

With the clock ticking on an Oregon legislative session that has yet to resolve a $1.4 billion revenue shortfall, the business lobby got an opportunity last Thursday to offer its solution to the problem. The testimony of a Brighter Oregon, a business coalition, took up the entire meeting of the legislature’s Joint Committee on Tax Reform.

But rather than offer specific solutions, Brighter Oregon’s spokesperson talked in generalities, complained about Oregon’s economic and fiscal performance, and threw cold water on the committee’s efforts to reform Oregon’s corporate tax system with the creation of a commercial activities tax. It wasn’t a bright move, as many felt the testimony was a waste of everyone’s time.

For example, Brighter Oregon spokesperson Patrick Criteser called on the legislature to explore ways for “maximizing federal Medicaid match.” When asked to give examples of how Oregon could draw down more Medicaid dollars, he couldn’t come up with a single one. That’s not surprising. Budget watchers long ago nicknamed our health and human services agencies the “Department of Medicaid Match” because they are so good at bringing in every available federal dollar. Criteser’s suggestion was nothing more than an unfounded complaint.

Brighter Oregon calls itself a coalition of businesses and groups that support the Oregon Business Plan. The Plan is the brainchild of the Oregon Business Council, which houses Brighter Oregon.

So it is interesting to contrast Criteser’s testimony on Thursday with the views of a prior spokesperson for Oregon Business Council, John Tapogna. Tapogna, who runs the consulting firm ECONorthwest, served as a spokesperson for the Oregon Business Council during the Measure 97 campaign.

In that capacity, shortly before the vote in November, Tapogna pointed out that Oregon has been managing its public programs and economy remarkably well. He also said he would support raising more tax revenue to get Oregon through its pension liability problem, improve education funding and stay on course with the Affordable Care Act.

Appearing on Salem radio station KMUZ to discuss Measure 97, Tapogna said (mp3):

Oregon has been on a remarkable six year run of what I would call exemplary public management. If I went back to 2010 and you told me where we got today, I would say it was a remarkably well managed fiscal recovery.

Oregon’s fiscal recovery is the seventh fastest in the country. We cut a remarkably smart deal with the Obama Administration, who sent us $2 billion to implement coordinated care organizations designed to lower per capita costs of health spending and help us get started with the Affordable Care Act.

We took some very politically courageous, tough decisions in the 2013 legislature to slow down the growth of prison beds. Those are tough political decisions that have to be made. And the legislature enacted changes to the PERS system that were also politically difficult, unfortunately overturned by the Supreme Court.

With the health care and the corrections reforms that liberated money to invest in the schools, in the last session we enacted full-day kindergarten. Our spending per student is now 23rd in the country; it is $1,100 higher per student than Washington state and it is closing on the U.S. average. We had a 20 percent increase in the higher education budget, and we are into the first steps of free community college.

If you had told me six years ago that we were able to make that kind of progress through 2016 I would have said ‘I am shocked and amazed and proud to be an Oregonian,’ and I am. This particular piece of public policy [Measure 97] is an abrupt step out of what otherwise has been a well-designed, well managed recovery.

Do we need more money going forward? Would I support a net increase in taxation to get us through some of these pension problems and pay into the affordable care act and expand education? Yes.”

Following those comments, Tapogna was asked about what specific revenue measure he’d support. He responded by giving a favorable nod (mp3) to a plan generally along the lines of what Senator Mark Hass and the Joint Committee on Tax Reform (which Hass co-chairs) have been exploring:

I am not so pure on gross receipts taxes generally that I wouldn’t say let’s go back to [Senator] Mark Hass, and say Mark Hass, and he has been looking at it, he calls it a commercial activity tax, but something that is far more thoughtful [than Measure 97], that doesn’t have a blanket 2.5 percent rate and isn’t so concentrated on what is simply political motivation of trying to put this on to corporations.”

You don’t have to agree with all of Tapogna’s points to realize it’s refreshing to hear a business community spokesperson recognize that Oregon’s economy and fiscal system is well managed and that a commercial activities tax is a reasonable solution to our revenue needs. Tapogna’s comments are far more productive than the stall tactics that lawmakers got from Brighter Oregon on Thursday. Tapogna’s comments make me think that someone needs to turn on the lights at Brighter Oregon.

Brighter Oregon talks about the importance of education to the state’s economic well-being. And yet, it offers mostly rhetoric, not the revenue that will make it possible for Oregon to have a first-rate, pre-K through college education system. If the business community really wants to have a brighter Oregon, it should stop impeding efforts to enact a robust and fair commercial activities tax to raise the revenue needed to strengthen our schools and essential services for all Oregonians.

---

Chuck Sheketoff is the executive director of the Oregon Center for Public Policy. You can sign up to receive email notification of OCPP materials at www.ocpp.org.

By Chuck Sheketoff June 06, 2017