We are pleased to report that following today’s closure the Oregon courts will not be closed on Fridays. Legislative leadership and the Co-Chairs of Ways and Means were able to work with the Judicial Branch to alter their budget to free up sufficient funding to allow the courts to remain open. We congratulate Co-Chairs Senator Carter and Representative Buckley for their successful work with Chief Justice De Muniz to resolve this budget issue. It is our intent to work collaboratively together to insure that the courts will remain open through the next difficult budget cycle.

       The growth of Oregon government spending has exceeded the growth in family income by a five to one margin since 2001. According to the Legislative Fiscal Office and the US Census Bureau, Oregon state government spending has grown 40 percent from $34 billion to $48 billion over the past four budget cycles. During the same period Oregon median family income has grown 12 percent from $39,798 to $44,682. This spending addiction is unsustainable. It is a primary cause of the current budget shortfalls and inadequate reserves that have required the distressing budget reductions we are now experiencing.

       All legislative bills that raise revenue must be introduced in the House of Representatives. House Democrats have introduced a number of revenue raising bills that either increase taxes or increase fees. Rather than addressing that spending addiction, our legislators are focused on raising taxes. In fact, they have introduced more than 50 bills that increase taxes and more than 100 bills combined that increase taxes and fees.

       HB 2077 would reduce the federal income tax exemption from $3,000 to $1,500. This would raise taxes on every Oregonian who pays more than $1,500 in federal income tax. The bill is retroactive to January 1, 2009. In the first year this bill would increase the income tax on Oregon taxpayers by about $120 million.

       HB 2649 creates an Oregon alternative minimum income tax. The bill would levy a minimum 7.5 percent minimum tax on adjusted gross income of $125,000 for single taxpayers or $250,000 for joint filers. AGI is the amount of income after the expenses of earning that income have been deducted. In the first year this bill would increase the income tax on Oregon taxpayers by about $145 million.

       HB 2651 creates a new tax bracket establishing a 10 percent income tax on taxable income exceeding $125,000 for single taxpayers or $250,000 for joint filers. This new tax bracket would add $89 million to Oregon taxpayers during the first year.

       HB 2474 would reduce the discount for property tax payments collected by November 15 from 3 percent to 2 percent and for two-thirds payment from 2 percent to 1 percent. This bill would have the net affect of increasing all timely paid property taxes by 1 percent.

       HB 3415 imposes a tax on each fuel supplier and utility based upon the amount of carbon in carbon-based fuels that are sold by the fuel supplier to consumers in the state. It also would tax all carbon or carbon-based fuel used to produce carbon-generated electricity that is supplied by any utility to consumers in Oregon.

       HJR 48 proposes to amend the Oregon Constitution to allow the Legislative Assembly to impose taxes on carbon emissions for the purpose of funding reductions in carbon emissions and carbon fuel use.

       HB 2696 would add back to Oregon taxable income any capitol gains tax reductions achieved through a 1031 real property exchange. The practical effect would be to abolish the Oregon capitol gains savings now available with 1031 real property exchanges.

       HB 2785 would suspend the Oregon income tax credit for political contributions for two years. This would have the practical effect of increasing the Oregon income tax liability by $50 for each taxpayer who makes political contributions and claims the tax credit.

       HB 2818 would establish a 12.5 percent tax on all automobile rentals having a contract duration of 30 days or less. The tax revenue would be collected for the Department of Transportation for highway purposes.

       HB 2771 eliminates a tax exemption for small winemakers thereby increasing taxes on their operations. HB 2461 levies a draconian tax on beer called the prevention, treatment and recovery tax on malt beverages.

       HB 3406, HB 2122, and HB 2018 all increase taxes on cigarettes and other tobacco products.

       HB 2698 would add back contributions to employee stock ownership plans to Oregon taxable income. Contributions to stock ownership plans by both employees and their employees are currently exempt from federal taxable income. This bill would make those contributions by both employees and employers taxable for Oregon income tax. HB 3309 similarly reduces the deductibility of currently tax exempt gains in annuities.

       HB 3312, HJR 27, HJR 29 and HJR 31 all propose to reduce the amount of allowable income tax deduction and credits that are not required under federal law. The final three bills propose to amend the Oregon Constitution to facilitate more taxation.

       HB 3303 is my personal favorite. This bill levies a 10 percent excise tax on bird seed. This bill should be a prime candidate for the “turkey of the year.”

      It would appear that our legislative colleagues may be unaware that our state and national economies are in shambles and that the people who live in most of the geographic area of Oregon are suffering through unemployment as high as twenty percent. We invite you to let them know how you feel about their solutions to our revenue problem. You can find the contact information for all 90 elected officials on the Oregon State Legislature website. Please be sure to let us know of your opinions and concerns as well. 

Best regards,

Doug

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