by Oregon Senator Doug Whitsett 2/1/10

(Oregon) BALLOT MEASURES AND TAXES

Today I want to thank all those who worked so hard and contributed so much in the effort to defeat Measures 66 & 67. Unfortunately, the “State of Portland” and the $6.5 million purchasing power of the public employee unions have once again dictated the outcome of a statewide election. The unions’ television and radio saturation campaign was both cunning and misleading. It was focused on the major media markets in Portland and Eugene and was designed to convince voters that only the rich and evil corporations would pay.

A Wall Street Journal editorial sums up the outcome of the Oregon tax election:

“ The highest income tax rate in the state moves to 11% from 9%, which will give Oregon close to the highest rate in the nation’…….“Two thirds of those hit with the new 11% tax rate are small and medium-sized business owners.”…  “Public employee unions have a lucrative racket: they essentially leverage the tax dollars they receive in dues from the salaries and benefits of their members to lobby for more tax dollars to secure even fatter pensions and pay”……”What was really protected was the $83,402 a year average in pay and benefits to Oregon state workers, 30% higher than what private workers receive”

WSJ.com January 28, 2010

Measure 67 passed statewide with a margin of about 74,000 votes. Measure 66 passed statewide with a margin of about 85,000 votes. Seventy one percent of those who voted in Multnomah County voted for both tax measures resulting in winning margins in the county for each measure of about 85,000 votes.

Political pundits “called” the election outcome just minutes after those Multnomah County vote tallies were made public. The Multnomah County yes vote overrode the strong no votes cast in all five counties in our Senate District 28. In fact, they overrode all twenty seven Oregon counties that voted no on both tax measures.

We share the disappointment, frustration and anger with the majority of voters in those twenty seven Oregon counties that rejected both tax measures. We should attempt to learn from that frustration. More than 800,000 Oregon registered voters did not cast a ballot in this election. The potential votes were available to defeat both measures had those voters chosen to participate. Our only opportunity to defeat future tax increases, and to elect fiscal conservatives to statewide offices, is through better voter participation in the twenty seven counties that just got run over on Tuesday.

We have no choice but to live with the election outcome; however, we believe that the election results will serve to prolong the current economic recession. Oregon businesses are now forced to pay both the retroactive taxes levied for the 2009 tax year, as well as taxes withheld for the current 2010 tax year. In effect, this year many businesses will be forced to pay taxes on gross income twice, even if they do not make a profit. At best this year of double taxation on struggling businesses will immediately put many more people out of work, and at worst lead to businesses insolvencies and closures permanently destroying jobs.

In my opinion, bleeding the Oregon business community to death through oppressive taxation is not the pathway to either a prosperous future or to stable state revenue. In an Oregonian opinion Phil Knight of Nike called the tax initiatives Oregon’s “assisted suicide for business”. I fully expect many Oregon businesses to move to another state where businesses and jobs are valued by government policies.

We are also concerned that the election outcome will further embolden the tax and spend mentality that has been largely responsible for the current economic morass. After the election we were told in a press statement by Governor Kulongoski that we just need to get over it and to move on, working together “to make the best choices we can for Oregon’s collective future”. The next day our Governor rolled out his top priority plans to urge lawmakers to take-on changes to what he characterized as the kicker political sacred cow during the special legislative session that began Monday.

He is asking the Legislature to enact legislation that would functionally eliminate the Oregon kicker tax refunds.  Senate Joint Resolution 45 would refer a ballot measure to Oregon voters to fundamentally change the structure of both kicker refunds. The basic plan is to divert most of the money that would now be refunded to the people from taxes that they had overpaid, into a reserve fund to be spent later by the government, during times of high unemployment and low tax revenue.

Saving money for harder times is good policy. However, stealing the taxpayers’ kicker refunds to provide revenue for hard times is not an appropriate course of action. A much better plan would be to set aside a small percentage of tax revenue for savings before the rest of the money is spent. Senate Joint Resolution 49 would refer a ballot measure to Oregon voters to do just that. It would place the first 3% of general fund revenue into a savings account to only be spent during times of high unemployment and low tax revenue. This amendment would force your Legislature to save money first just as families do that are successful in saving for a rainy day.

Thirty years ago the people had come to understand that their Legislature will spend every dime they can get their hands on. The kickers were established by the people through a constitutional amendment in order to slow the unsustainable growth of Oregon government spending. They require that all excess tax money collected be returned to the tax payer, whenever the amount actually collected, exceeds the amount forecasted to be collected, by more than 2%.

Elimination of the Oregon kickers would amount to yet another enormous tax increase. The kickers have returned more than $2.5 billion to Oregon taxpayers who overpaid their taxes, and more than $500 million to Oregon corporations over the thirty-year life of that Constitutional Amendment. On average, reversal of the kicker amendment would serve to increase the annual tax burdens by yet another $100 million.

It is rumored in the Capitol that another even more onerous proposal to amend Oregon’s constitution may be introduced. This proposal would refer a ballot measure to the people to roll back the 3% cap on annual property tax increases. It would serve to levy a massive additional tax on all property owners that would grossly add to the cost of doing business, owning a home, or living in rental housing. We have not seen any draft of such a bill and we truly hope it is only a rumor

Limiting government revenue is the only successful method of limiting government spending. Limiting government spending is the only way to limit government growth and the intrusions on our freedoms that accompanies that growth.

   OBAMA vs. U.S. SUPREME COURT

          I take strong exceptions to a seventy-two word sanctimonious statement made by President Obama in his State of the Union address that was followed by a standing ovation from his Democrat brethren:

“Last week, the Supreme Court reversed a century of law to open the floodgates for special interests, including foreign corporations, to spend without limit in our elections. Well I don’t think American elections should be bankrolled by America’s most powerful interests, or worse, by foreign entities. They should be decided by the American people, and that’s why I’m urging Democrats and Republicans to pass a bill that helps to right this wrong.”

          My first objection is his arrogant sandbagging of the Supreme Court Justices who were invited as his honored guests and had no opportunity to respond to his allegations.

          My second objection is Obama’s urging of Congress to somehow overrule a Supreme Court decision based on constitutional law. Obama does not appear to comprehend that the U.S. Constitution is the supreme law of the land and that to overrule a U.S. Supreme Court decision would require a constitutional amendment.

My third objection is that Obama’s statement was factually wrong

The Supreme Court decision did not change or even address the long

standing prohibitions on contributions by foreign nationals and foreign

entities. The decision did not alter the one hundred year-old ban on domestic corporate contributions to political campaigns.

          One would hope that a Harvard Law School graduate would have a better grasp of legal facts.

In my opinion, Obama owes a humble apology to the nine Supreme Court Justices as well as a factually correct explanation to the citizens of this country.

Please remember if we fail to support rural Oregon, then no one will.

Regards,

Senator Doug Whitsett

Oregon District 28

Klamath, Lake, Crook, Deschutes and Jackson Counties