Permission Granted: Take the High Road

September 1, 2004By Chuck Sheketoff

Associated Oregon Industries, the Oregon Business Association, and the Oregon Business Council say they want to stabilize our public finance system in general, and funding for education, in particular. It's time to see who in Oregon's business community really means what they say.

The most recent state revenue projection concludes that Oregon corporations might get a $68 million tax cut under Oregon's so-called "kicker" law. The kicker kicks when revenues over a two-year period exceed economists' projections by a mere 2 percent. The same forecast indicates that individual taxpayers shouldn't expect a kicker tax cut next fall.

If the Legislature chooses to ship tax dollars back to Oregon's most profitable corporations, it will send the mistaken message that the state budget is doing well. State economists project that revenues over the next two-year budget period will not be enough to maintain the public services that Oregonians enjoy today.

Yet, unless the Legislature exercises its voter-approved constitutional authority to stop the kicker payments, a few large, profitable companies will reap a tax windfall and further destabilize Oregon's finances. About half of the total tax cut will flow to only 50 Oregon corporations. Ninety percent of the total tax cut will be bestowed on fewer than four out of every 100 corporations.

All of Oregon, on the other hand, benefits from investments in education and public services, including all businesses, big and small. If big business is serious about supporting public investment, then they should give the Oregon Legislature permission to stop the tax cut. The business lobby should take that public policy high road and urge the Legislature instead to invest in Oregon by canceling their automatic tax cut. Canceling the kicker is neither a Republican nor Democratic agenda - it is an agenda to move Oregon forward, or at least stop a further slide backwards.

Studies by the Utah State Tax Commission and the big-business-backed Council on State Taxation show that Oregon businesses have a low tax burden compared to other states in the West and nationally. Because Oregon's corporations already have a very low tax burden, this planned tax cut is even more inappropriate and wrongheaded.

The business lobby goes to Salem and asks for investments in education and other public services that improve our business climate. It makes no sense to issue a tax cut that primarily benefits only a handful of large corporations at a time when our business environment needs public investments that benefit us all.