New laws for 2012: Some Oregonians get a tax break; minimum wage workers get a raise

The Oregonian
December 23, 2011

By Michelle Cole, The Oregonian

SALEM -- Oregon's wealthiest taxpayers will get a break and workers earning minimum wage will get a raise on New Year's Day.

New laws & other changes More than 280 new laws and other changes take effect Jan. 1. Including:

Income tax surcharge expires for the wealthy: The two top income rates passed by the 2009 Legislature and ratified by voters in Measure 66 will drop from 10.8 and 11 percent to 9.9 percent for single filers earning more than $125,000 and joint returns of more than $250,000.

Minimum wage increases: Oregon's minimum wage will jump 30 cents to $8.80 per hour. Cell phones, texting and driving: It's been illegal for a while, but police complained there were too many exceptions for people who say they need to talk as part of their work. Those exceptions are erased.

No more appliance tax credit: Homeowners who buy energy-efficient clothes washers, dishwashers, refrigerators and alternative fuel vehicles will no longer get a state energy tax credit after Dec. 31. Those are two of hundreds of changes in state law and policies slated to take effect on Jan. 1, 2012.

The drop in the tax rates for an estimated 35,000 high-income households is part of a controversial policy passed by the Legislature and approved by voters in the 2010 election. At the time, everyone agreed that the 10.8 and 11 percent income tax rates contained in Measure 66 would only be a temporary solution to help balance the state budget.

On Jan. 1, the tax rate drops to 9.9 percent for individuals who earn more than $125,000 or joint filers with incomes in excess of $250,000. That top rate is still higher than the 9 percent it was before Measure 66. But the change means state government is projected to receive about $118 million less during the current, two-year budget period.

"It's a huge tax cut," says Chuck Sheketoff, executive director of the Oregon Center for Public Policy.

Oregon's state budget problems aren't over, Sheketoff argues, and $118 million would go a long way toward preserving programs serving the poor and the elderly.

There's no talk in Salem of revisiting tax rates on high-income earners anytime soon.

"The people have voted and they expect it to happen. That's also the best thing to happen for the state right now," says Rep. Kevin Cameron, the House Republican Leader, who has long argued that Oregon's high income tax rates have been a drag on the economy.

On the opposite end of the income spectrum, nearly 145,000 Oregon workers will get a 30-cent-per hour wage when the state's minimum wage rises to $8.80.

The increase, tied to the Consumer Price Index, comes as part of an annual recalculation required by an initiative approved by voters in 2002.

Oregonians that fit into neither income group may still be affected by a number of other new laws and changes.

For example, consumers wanting to take advantage of many of the tax credits the state offers on energy efficient appliances will have to hurry.

The $180 state tax credit applied to new clothes washers expires Dec. 31. So do the tax credits on dishwashers, refrigerators and air conditioners.

The change was part of the Legislature's reassessment of Oregon's Residential Energy Tax Credit. The thinking is that incentives are no longer needed to promote certain products.

But consumers will be able to put some cash back into their wallets with a new law on gift cards.

It requires retailers and gift card companies to give shoppers the cash left on cards that have been used at least once and still have $5 or less left.

Dave Rosenfeld, spokesman for the consumer advocacy group OSPIRG, describes it as a "common sense" change that will affect a lot of people.

"How many times," he asks, "have you had a gift card and you're down to $5 and there's nothing you can buy?"

Other law changes may help scofflaws stopped for speeding catch a break.

The Legislature reduced fines for many traffic violations and gave judges leeway to lower them even more. The idea came after the number of citations issued in Oregon dropped and lawmakers were convinced that police might be more likely to write a ticket if the fine was perceived as being reasonable.

At the same time, state law will get a lot tougher on Jan. 1 for people who insist on holding a steering wheel in one hand and their cell phone in the other hand.

It's already illegal in Oregon to talk on a hand-held device while driving. But, let's be honest, drivers do it all the time.

Police complained that the law was too hard to enforce because it made broad exceptions for people who said they were talking and driving as part of their job.

"I just quit writing tickets because everybody was lying," says Gearhart Police Chief Jeff Bowman.

The latest rewrite of the law takes away the "talking for work" excuse, making it illegal to use a hand-held device and drive unless you're driving a tow truck or a utility service vehicle.

Bowman is counting down the hours until the rewrite takes effect.

Warning, he says: "I'm going to start handing out tickets on New Year's Day."

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