Bladine: Tax hikes become preferred solution
Oregon state and local governments have more money, but provide fewer services. The clarion call from those who presided over creation of our budget crisis is to raises taxes.
One hand points to large businesses and higher-income citizens as taxation targets; the other hand slips silently into the back pockets of all Oregonians who will pay the hand-me-down costs.
The background cause is well-known, and unresolved. When Oregon public pension costs spiraled, reasonable reforms were said to violate a lifetime contract. Today, with $22 billion in unfunded liability, that pension system plus burgeoning Medicare costs absorb far more than their share of government resources.
The Democratic Party has a union-based mentality, with tax increases the preferred solution to state budget challenges. All manner of proposals are taking shape as 2017 battlefields.
Undeterred by November voter rejection of Measure 97, its supporters are working on a new corporate gross receipts tax plan. If a measure reaches the ballot, expect a repeat of massive campaign spending pitting public unions against the state business community.
Speaking of contracts, how about the agreements government made related to tax deductibility of property taxes and mortgage interest? Citizens depended on those promises to make lifetime investments in their primary and secondary homes, but the revenue-raisers would shred those contracts with a wink.
House Bill 2771 would phase out deductions for property taxes based on income. As if that weren’t enough, another measure would return property taxation to the real market value system that sent home taxes soaring before voters reined them with measures 5 (1990), 47 (1996) and 50 (1997).
House Bill 2006 would eliminate deductions for mortgage interest on second homes, and phase out deductions for mortgage interest on primary residences based on income.
Oregonians were persuaded in 2010 to approve major income tax hikes with Measures 66-67. However, in 1996, voters had the foresight to require a 60 percent legislative majority to approve tax increases. It’s no surprise that another 2017 proposal would eliminate that 60 percent vote rule.
Here’s how one reader summed up the situation with a comment on our website:
“There has been (and still is) resistance by the Democratic Party to do anything that might disturb their base support and their symbiotic relationship with the public sector unions. It will be interesting to see how many taxes (they) will find necessary to support this ‘boondoggle.’ The unintended consequences of the poor choices are now, as predicted, going to create significant problems for the entire state.”
Jeb Bladine can be reached at email@example.com or 503-687-1223.