Revenue, Not Spending, Is Budget Concern - Extending Temporary Tax Measure Should Be Option

Statement by OCPP executive director Chuck Sheketoff

Today’s state economic and revenue forecast makes the case for the legislature to consider extending the temporary, top tax rates contained in Measure 66, approved by voters in early 2010.

In delivering the forecast, the state economists explained that while state revenue collections are proceeding on track, and personal income is slated to continue to grow, the revenue forecast is down because of pessimism surrounding the national and international economy.

Lawmakers need to protect schools, universities, health services and the many other public structures that create economic opportunity when addressing a revenue shortfall.

A prudent approach would include extending the temporary tax rates contained in Measure 66.

Earlier this year, state economists predicted that the expiration of the Measure 66 temporary increase of the top marginal personal income tax rates — scheduled to occur in at the beginning of 2012 — means the state will lose out on $134 million in revenue in this budget cycle.

Today’s forecast likely changes the Measure 66 revenue loss estimate, but it is likely still a significant loss of revenue that should not be ignored, especially if the next forecast continues to show a revenue problem.

The Oregon Center for Public Policy is a non-partisan research institute that does in-depth research and analysis on budget, tax and economic issues. The Center’s goal is to improve decision making and generate more opportunities for all Oregonians.