2019 Eblasts

There’s lots of talk about taxing the rich. Candidates are full of ideas. The problem is, most of the ideas would take years to implement. But we need to start now reversing wealth inequality.

From our friend, Chuck Collins with the Institute for Policy Studies, came this:

“Opinion: Why a surtax on multimillionaires’ income is a good first step”

Originally published at Marketwatch.

What do you think of his idea? Join the conversation on our Facebook page.

One of the members of the TFO Steering Committee, Bennett Minton, authored this OpEd that appeared in the Oregonian last week. Don’t read the comments unless you have a strong stomach for bile.

We’re now getting ready for the 2020 short session when we will screen only 250 bills, rather than the over 4000 bills of the long 2019 session. We’re studying, strategizing, and meeting with legislators and coalition partners.

We expect three issues to be our primary focus. Of course, we’ll be a watchdog for others’ good and bad ideas as well.

1. Working on wealth disparity. Despite Democratic control of the state legislature, in the last six years three actions have increased the wealth divide in Oregon. In 2013 the legislature created a tax break for business owners (with 72% going to people with incomes greater than $500,000 per year), in 2019 for as part of the new Corporate Activities Tax, legislators lowered the bottom income tax rate, giving our poorest citizens nothing, and our wealthiest $640 per year, and in 2019 legislators didn’t act on HB 2144 disconnecting Oregon from the capital gains tax breaks in the federal Opportunity Zone program enacted as part of Trump’s tax legislation.In 2020 we’ll work to get this Opportunity Zone business finished. Oregon has historically taxed all income the same, whether from employment or capital gains. If we don’t disconnect from the Federal Opportunity Zone tax breaks we’ll be giving Oregonians with spare money to invest huge tax breaks. If you are interested in understanding this better, here’s a reading list, and our prior email to members on the Opportunity Zone issue.
2. Making sure the wages required for business subsidies are not diluted. In 2019 Business Oregon (BO) tried to get two different bills passed that would have reduced what businesses must pay to get property tax breaks and other subsidies. We succeeded in killing the bills in 2019, but will be on the watch to see if BO comes back with equally faulty ideas this session.
3. Protecting the new Corporate Activity Tax (the CAT) from additional exemptions.We’ve heard of Democratic legislators wanting new breaks written in for dairy businesses, fisheries, and timber. Portland businesses want a tax break for their Portland gross receipts/Clean Energy Surcharge and Medicaid providers want to not pay the tax on what they receive for Medicaid patients. We’re saying NOPE to these changes, unless those who want them can round up the supermajority it would take to increase the current .57% rate enough to pay for them. Watching out for other issues.

We’re watchdogging groups looking at the property tax breaks for farm equipment, seniors and renters. Screening every bill is part of our work to watch for sneaker bills.

You are always welcome to say you want to help!

There were times during this legislative session when I was so frustrated that I wrote scathing emails to you all about the workings of the legislature. The TFO Steering Committee was wise enough to nix each of them. As it turns out, in many ways it’s been an excellent session, not just for tax issues, but also for a good number of social, cultural and political issues as well.

But TFO is about taxes and here’s the low down on what’s happened this session on taxes.

#1 There will be an additional $1 billion per year for education under the Student Success Act—unless the referral by Oregon Manufacturers and Commerce gets the “no” votes they want, which seems unlikely. But we will be asking you to help fight it if they collect enough signatures to get it on the ballot, and we certainly want to say “think before you ink” if a signature gatherer asks for your signature.

#2 The efforts to create carve-outs from that bill almost all failed, whether for Intel/Amazon, for farmers or for “essential items” (think paper towels). Homebuilders did get a small concession; they will subtract from their income 15% of the labor costs of subcontractors.

#3 An exceptionally complicated bill was put forward by the Oregon Business Development Department, aka as “Business Oregon.” The original bill made numerous changes, some good and some we fought, to five of Oregon’s property tax exemptions, employee and corporate income tax rebates, and economic development programs. The bill essentially died. There will likely by an interim workgroup to address the issues.

#4 Bills to give a tax break to distillers both died. The fact that we have a break for wineries makes it easier to ask for one for distillers. The solution, of course, is to end the break for wineries, not open one for distillers.

#5 Subsidies for short line railroads bill was improved. The maximum benefits for the world’s biggest short line rail company, Genesee and Wyoming were reduced from $2,275,000 per year to $650,000. We’d still rather have seen more changes, but it was greatly improved.

#6 The EITC refundable tax credit was increased by 1% of the federal credit, a small change, but undoubtedly significant to recipients.

#7 The 529 college savings plan changes requested by the Treasurer’s office got considerably better. It will now encourage savings by lower income Oregonians, changes that were paid for by reducing benefits for wealthy savers.

#8 PERS reforms proved the legislature is willing to address the issue. The last bill that passed was in 2013. It is time to work on this problem. 

#9 Tobacco and vaping taxes will be on the ballot in November of 2020. We’re proud to be on the list of supporters. Tobacco taxes will be joined on that ballot by a constitutional referral to allow campaign finance reform. That’s important too; it’s clear that contributions speak in the Oregon legislature’s lawmaking.

# 10 The property tax break for home sharing passed both houses, after some limits were placed on it. Since the bill only allows local communities to implement the idea, when we hear of cities or counties considering trying it, we’ll want to help design a true pilot study with stronger guidelines than the legislature put in place.

What died…for this session?

Any subsidy for distillers, additional tax credits for the maintenance and operation of agricultural housing, doubling the amount of the crop donation tax credit, a second brownfield remediation tax credit, a tax credit for teaching nursing in rural areas of the state, and a dozen other new tax break ideas. Unfortunately bills diverting 30% of tourist’s lodging taxes to workforce housing and revisions to the mortgage interest deduction (removing the deduction for high income taxpayers and second homes) also didn’t make it through.

Want to Help?

We’re already had a retreat to begin plotting what TFO will work on next. Both the Senate Finance and Revenue and the House Revenue Committee spend most of their time each session talking about giving money away through the tax code rather than raising revenue. But we’ve a long list of potential money raisers we’ll be exploring between now and the February 2020 session. We’d love more help. If you’re intrigued, please email Jody@TaxFairnessOregon.org or call 503 810-6654.

HB 2164 is a complex bill but one of its most important features is that is extends and increases Oregon’s tax provisions for the Earned Income Tax Credit (EITC). The EITC provides substantial relief to low income families and has been shown to be one of the most cost-effective means of raising income-challenged families’ economic prosperity. With the long Republican walkout, ostensibly to prevent Oregon from addressing climate change, there is real danger this bill will not be passed in the single day–today–remaining.

Oregon’s EITC provisions are due to expire on December 31, 2019. HB 2164 would extend that sunset to 2026. It would also increase the tax credit allowance from 8% to 9% for most families and from 11% to 12% for a filer with a dependent child under three years of the amount allowed under federal taxes. Failure to pass this measure would have severe consequences on to up to 250,000 poorer Oregonians as documented in a recent Oregon Center for Public Policy (OCPP) analysis. The OCPP report also documents that some of the most severe impacts would be in the district of Senator Herman Baertschiger, the leader of the Senate Republican walkout. In his district, over 11,000 lower income filers would suffer an average yearly tax increase of $221.

But HB 2164 has other interesting provisions, not all of which are without controversy:

1. Establishes a tax credit for contributions to a higher education savings accounts (529’s) and ABLE accounts but limits the percent of the tax credit based on income. Oregonians with income of less than $30,000 would get a 100% tax credit of up to $300. As incomes rise the percentage drops, until filers with incomes greater than $250,000 would get a tax credit for 5% of the amount they put in a 529 college savings account, up to the $300 cap.
   
2. Established a new tax credit for short line railroads for system rehabilitation projects. The credit is for 50% of costs, with annual credit limits based on the rail miles. The credit is greater (up to $3500 per mile) for smaller lines like the City of Prineville Railway and less ($1000 per mile) for large systems such as the Genessee and Wyoming system.
   
3. Creates new provisions and modifications to various aspects of the new corporate activity tax, signed by the Governor earlier this session. For example, it reduces the tax for builders of single-family residents, allows automobile dealers to show the tax as a separate item when they sell automobiles, and clarifies language to make sure that banks pay the tax on the interest and fees they charge their customers.
4. Extends current tax credit provisions for certain retirement income, volunteer providers of emergency medical services, employer provided scholarships, agricultural workforce housing construction, low income rentals, crop donations to food banks and schools, and extends special assessments for historic properties, and for the Cultural Trust until 2026.
   
5. The $50 per taxpayer political tax credit becomes available only to individuals with income under $75,000 and to couples with income under $150,000. Meanwhile, the tax credit for donations to fund Individual Development Accounts for low income Oregonians is increased from 70% to 90%.
   
6. Establishes a sunset for vehicles used in emissions testing, and extends tax exemptions for certain qualified machinery and equipment (ORS 307.455) and for the tax credit for sale of a mobile home park to a tenants’ association.
   

Did you know Oregon has each of these tax breaks?

Two of the provisions are ones we worked on this session. The 529 and ABLE accounts’ refundable tax credit idea for low income taxpayers originally would have been paid for by reductions elsewhere in the budget. An amendment instead makes it revenue neutral, as it is paid for by reducing the benefit for high income taxpayers. We changed our testimony from opposition to support with that important change. Almost all of the benefits have long gone to the top 20% of income earners. Hopefully, the new program will encourage lower income families to save for their childrens’ and grandchildrens’ futures. We also opposed the short line rail subsidy, encouraging changes that significantly reduced the subsidy to G&W, which is the world’s largest short line rail company, with lines on five continents and lines running from the top to the bottom of Oregon. There were over a dozen other new tax credit bills that we opposed, which thankfully didn’t make it into this bill or succeed as stand-alone bills this session.

Last week Oregon legislators took a hard vote when they made changes to PERS. In his letter to constituents, Senator Michael Dembrow did the best explanation we’ve seen of what the bill does and why supporting it was important. With his permission, we’re sharing it with you.

If you’re curious about how each legislator voted on this PERS bill, you can see here who voted against SB 1049 in each house. Once you open the link, scroll down to “Third reading” on 5.23 for the Senate and 5.30 for the House.

You can see other legislators’ vote explanations here. Many explanations are shorter than Senator Dembrow’s, but his is very clear and thorough.

Last Thursday in particular was a complicated day for me in the Legislature. It began with one of the most difficult votes that I have taken as a legislator—making changes to the Public Employee Retirement System that include additional contributions by public employees—and ended with one of the most euphoric of moments: watching my House colleagues give final approval to our Juvenile Justice Reform package, dramatically rolling back key elements of Measure 11, restoring judicial discretion in a way that recognizes current science. In between those two votes we were able to close an awful loophole that currently allows individuals charged with domestic violence and abuse to hold onto their firearms, we cleared the way for a statewide ban on Styrofoam, and we put a moratorium on fracking here in Oregon.

In this newsletter I want to focus on the PERS vote. I know that it may be surprising to some of you that I would have supported a deal that reduces compensation for public employees, given that I spent many years as a public-sector union president and contract negotiator, and given that I’m myself a Tier 1 PERS worker and will be directly affected by this change. 

Whether they be teachers, firefighters, social workers, corrections officers, whatever, public employees did nothing to create the current state of our retirement system. They work hard, perform duties that we desperately need, are committed to long-term service to this state. Asking them to take any kind of reduction in compensation will understandably be taken as a lack of respect for all that they do. It’s not anything that I would ask of them if I weren’t convinced that it was necessary in the short term and beneficial in the long run. 

To that end, I’ll do my best to explain why I and most of my Senate Democratic colleagues voted for it, and why most of my House Democratic colleagues will likely support it when they vote next week.

Please bear with me—it’s long and detailed, but I hope you’ll find it informative.

SOME BACKGROUND

I’m sure you know that we have been unable to fully fund our schools and colleges, not to mention other public services, ever since the passage of Ballot Measure 5 back in the early 1990s. That tax-limitation measure shifted the responsibility to adequately fund schools onto the state legislature but did not provide the state with the revenue to do so. Money that was otherwise needed to fund our colleges and universities, our natural resource agencies, and other important state service had to be moved over to K-12 education, and even those funds were inadequate for the job at hand. We all know the result: larger class sizes, shorter school days, layoffs, skyrocketing tuition and other user fees all over the place. 

On top of that, we’ve seen employment costs going up in the public sector, partly due to rising health-insurance costs and partly due to retirement costs. We’re starting to get healthcare costs under control, but PERS expenses remain a serious challenge. These are legacy costs, the result of contractual obligations made in the 1970s and 1980s, and which the Oregon Supreme Court has told us must be respected. They are not the fault of any workers, certainly not of current workers, most of whom were hired under a lesser PERS pension plan, OPSRP (“Tier 3”), created in 2003 to solve the problem going forward. But the legacy costs attributed to Tier 1 and 2 employees will be with us on a declining schedule for 2-3 decades to come.

In order to meet those obligations, we’ve seen PERS employer rates rising steadily over the years. That’s because Oregon, unlike many other states, is committed to taking steps to contain the growth of its unfunded liability. (Nearly every state is facing comparable challenges with its public pension system, and many are in much worse shape.) If we do nothing, public employer rates are scheduled for another round of big increases in 2021-23. Portland Public Schools, for example, stands to spend an additional $50 million during that biennium alone as a result of rising rates.

As a result of these rising rates, and the cutbacks that they’ve generated, we’ve seen calls for changes in the system for years. The Legislature did approve a recent series of changes in 2013, but the Supreme Court threw out most of those. Democrats have (appropriately, I believe) resisted changes to PERS that would be exclusively on the backs of public employees. We’ve insisted that any changes to PERS must be balanced by a significant increase in revenues, particularly revenues coming from the corporate sector (which has seen its share of contribution to the General Fund reduce over the years at the expense of individual taxpayers). 

The challenge is that we are constitutionally required to have 3/5 majority votes in both chambers to raise revenue. Despite many attempts, we’ve been unable to reach that threshold ever since passage of Measure 5. Republicans have been unwilling to provide the votes for tax reform. Most recently, attempts to combine PERS changes with funding increases failed in 2017 when we failed to secure any Republican votes for a potential corporate tax increase.

Within days of the 2018 election, however, we knew that there was a path finally to restore stable school funding—if we also committed to addressing PERS rates.

THE CURRENT LEGISLATIVE SESSION

While most of my focus this session has been on shepherding the Clean Energy Jobs bill and overseeing our other environmental priorities, School Funding and PERS have obviously been ongoing topics of crucial interest, particularly for those of us in Senate Leadership. Early on, I made my own PERS requirements clear—any changes to PERS would need to effectively bring down employer rates, be constitutional, and be fair, particularly to those members hired after 2003, who will not be receiving the more generous pensions of the Tier 1 and Tier 2 employees. The bulk of the financing could not come on the backs of employees. AND any changes to PERS would need to be PRECEDED by significant corporate tax reform. 

As I’m sure you know, we did succeed in passing our top priority for the session a couple of weeks ago—historic increases in school funding. This was the result of years of effort, and more recently months of work done by our Student Success Committee, chaired on the policy side by Senator Arnie Roblan and Representative Barbara Smith Warner, and on the revenue side by Senator Mark Hass and Representative Nancy Nathanson. They used the framework of Measure 97, the failed corporate activities tax initiative from 2016, made it more broad-based and more modest, paired it with a small reduction in personal income taxes, dedicated it to K-12 and pre-K education, and came up with a proposal that will generate a billion dollars a year in stable funding and will grow as the economy grows. In the end, Oregon Business and Industries lifted its opposition and pledged not to support a ballot challenge. It was a huge, important victory. 

In order to get the necessary votes, to get Senate Republicans back into the building (they used their constitutional ability to deny a quorum), and to get Business to stand down, there was an implicit understanding that we would follow school funding with PERS reform in short order, and that the changes to PERS would need to include contributions from current public sector employees. 

We knew from earlier rulings by the Oregon Supreme Court that any changes to PERS could not affect the benefits of current retirees or earnings already accrued by current workers. An often-heard solution was to create yet another retirement tier, denying future employees access to a pension entirely, and have their retirement come entirely in the form of a “defined-contribution” or 401K-style program. This is the gist of at least one proposed ballot initiative that’s out there. For many of us—certainly for me—this was unacceptable. Having employees doing the same work side by side with such dramatically different benefits would further exacerbate the inequitable state of affairs that we currently experience. The OPSRP program that was created in 2003 remains a good, solid benefit package that will be sustainable over the long term once Tier 1 legacy costs are removed from the system. The Governor, Speaker of the House, and Senate President committed to coming up with an alternative that would preclude the creation of a new tier. 

SB 1049 was the result.

WHAT’S IN SB 1049?

The goal of SB 1049 is to stop the increase in employer rates and gradually reduce them over the next decade. In the last five years, the cost that public employers have had to pay to cover pension debt obligations has nearly doubled. As I mentioned above, in the next biennium alone, the increase in PERS rates paid by PPS will be more than $50 million and will rise with each biennium for the next decade. Comparable increases will be felt by PCC, PSU, other school districts, and by city and county governments. Absent action to stop that, we’ll see ongoing layoffs, salary freezes, and inadequate services—despite our having just passed a historic school funding package. To prevent that, SB 1049 makes structural changes to PERS that includes slightly moving overall employee compensation away from retirement.

Two-thirds of the goal will be accomplished by a small increase in the amortization period for Tiers 1 and 2 from 20 years to 22 years. Think of the PERS debt as a mortgage; extending the amortization period is like refinancing a mortgage. Doing so makes payments more manageable but extends the payment period. Extending the amortization by two years is something that the PERS actuaries feel is manageable; they’ve told us that extending beyond that period would be imprudent and would put the system at risk if/when we enter another economic downturn. The Governor felt strongly that we should not take that risk. 

Twenty percent of the savings in the bill will come from a reduction in contributions into employee IAP accounts beginning July 1, 2021. The IAP is a 401k-style account that each worker has in addition to their regular PERS pension account. Ever since the PERS reforms of 2003, the 6% employee contribution (in some cases paid by the employee, in other cases “picked up” by the employer in lieu of salary increases) has gone into the IAP side-account. Under SB 1049, employees with annual salaries above $30,000 will have some of that 6% redirected into a new, special account designed to help pay down the PERS debt. Tiers 1 & 2 employees will see a redirect of 2.5% from their IAPs; OPSRP employees will see a much smaller reduction of 0.75%. These redirects will continue until PERS is 90% funded (currently it’s at around 80%), projected to take around 10 years. After that, the full 6% will again go into the IAP, as long as the fund remains 90% or more funded.

Based on email communications that I’ve received, some PERS members are being led to believe that their entire retirement package will be reduced by as much as 12.5%. This is false and misleading. The PERS actuaries project that this redirect will lead to a 7.5% cumulative reduction in the IAP of a Tier 1 worker who works for another five years before retiring; a 12.5% reduction in the IAP of a Tier 2 employee who works for another 10 years; and a 7.1% reduction in the IAP for an OPSRP employee who works for another 20 years. But remember that these are reductions to the IAP ONLY, and the IAP is a small part of an employee’s overall retirement package. The overall effect of the reductions is a much smaller impact on a 30-year employee’s overall retirement benefit, after including the defined-benefit pension portion that is untouched by this legislation. Any reduction, if it’s not made up for in some other way, is going to be painful, but it’s important that we be clear about the actual effects.

Moreover, the sooner we can get to the 90% funding level, the lower those cumulative impacts will be, and so the Legislature has committed to paying down the debt whenever possible. SB 1049 takes a first stab at that by directing $100 million in unanticipated revenues from the General Fund to reduce the debt, and it directs 80% of annual revenues from a new lottery sports betting program there as well.

Getting us to commit to this kind of shared investment was really important for me, and I pushed hard to make sure that happened. I also pushed to make sure that employees can make up for any money being redirected out of their IAPs by putting an equivalent portion of their future salary increases back into the fund if they so choose. They can thereby stay on their expected retirement schedule (though of course, since the IAP is a 401k, their final balance will be a function of how well the PERS investments have done over the years). That was really important to me, and I’m pleased to see that it made it into the final bill. I do believe that with the coming reduction in employer rates, public employee unions will be able to bargain hard and secure salary increases that will more than offset the reductions.

Finally, an earlier version of the bill included a change in the way that we would henceforth calculate benefits for Tier 1 employees on “Money Match,” one of the retirement alternatives, that I found repugnant. To my way of thinking, it was clearly an abrogation of the PERS contract that affected benefits already earned and would likely prove to be unconstitutional by the Supreme Court. It would also have led to a landslide of premature retirements. Fortunately, my way of thinking prevailed, and that provision was dropped. I do believe that the remaining sections of the bill will withstand a Supreme Court challenge.

There are a couple of other provisions in the bill that are non-controversial. One is a $195,000 cap on earnings that generate PERS benefits, effective January 1, 2021. This obviously doesn’t affect many workers, but it will help keep costs (and benefits) down. The second is a provision that will allow retirees to continue to work at a PERS-covered job after retirement (currently, their hours are limited) if they so choose, beginning next January. They won’t earn additional benefits; rather, the dollars that the employer would have put into their PERS account will now go into paying down the debt. 

THE VOTE

By the time it came to vote on Thursday, I knew that I would be a yes vote, as tough as that would be. I knew that committing to the passage of SB 1049 made it possible for us to secure that formidable school funding package. Passage of SB 1049 will also allow that package, with its corporate tax reform component, to weather a potential ballot referral and will likely prevent more draconian anti-PERS measures from making it to the ballot or being successful there. 

The bill of course passed by the narrowest of margins, 16 votes in support. Even though they have been calling incessantly for PERS reform, only three Republican senators voted for it. Why is that? Presumably, SB 1049 doesn’t go far enough for them in requiring employee concessions and turning the system entirely into a 401k plan. I of course disagree. On balance, this proposal is a reasonable, responsible compromise that maintains good benefits, strengthens our retirement system, is accompanied by significant corporate tax reform, and will help stabilize public services.

We are very pleased with how much effort has gone into this step forward with PERS, and have sent thank you notes to legislators who voted for this change. Please do so as well. Or complain, if you don’t agree. Check your legislator’s votes at the link above.

The Oregonian editorial board hit the nail square on its head in this Sunday’s editorial calling for “Earmarking most of the Kicker for PERS”. 

It faults the Democratic leadership for not doing this because they think the public will not support them. The polls likely tell that story, but it is the responsibility of leaders to explain to the electorate what is necessary for the public good; that the PERS deficit is a shared responsibility, and that the wisest use of this windfall tax revenue is to help to reduce that deficit.

Four Democratic legislators could exercise that leadership and wisdom by giving a rebate of $100 to every taxpayer and sending the rest to PERS: 

Peter Courtney and Ginny Burdick in the Senate and 

Tina Kotek and Jennifer Wlliamson in the House.

Call or write these legislative leaders and your own legislators so that this action can be taken in the next final weeks of the session. Kotek has proposed using some of the money to reduce the pollution of old trucks. That is desired but not as high a priority as keeping teachers in our schools and college affordable to our citizens.

Call or email them today!

Sunday’s Oregonian did a great job of describing where we are in Salem right now. We encourage you to read it. The paper left out one issue that we’ve been deeply engaged with. The plan for the financing of the Student Success bill is detailed in 3427 -1. The highlights are described in the O’s article. Easier than reading that bill is this description.

But there is one part of the bill we do not like. It would provide a ¼% income tax rate cut for taxpayers, reducing the tax rates from 5, 7, 9 and 9.9% to 4.75, 6.75, 8.75 and 9.9%. As we testified Thursday, this is not progressive. Couples with $250,000 or more would get a tax break of $625, but many others would get a significantly smaller tax break. For the average household with $50,000 in taxable income, the change would mean a reduction of around $125. For the 900,000 seniors on Social Security, the working poor who don’t owe taxes, and those who owe little, a tax rate cut would provide nothing. 

Our proposal treats every Oregonian the same, instead of treating the wealthy better than the poor. 

For two weeks we have been meeting with legislators to suggest they instead give every Oregonian a $50 refundable rebate. That would help cover the cost of the new Corporate Activity Tax that might show up in price increases. Even if every single penny of the new tax were passed on—which we do not believe will happen—that would cover the first $10,000 in purchases. And groceries and gasoline are excluded from the new tax. Here’s our one-pager describing the idea. 

Now would be the time to reach out to your legislators. 

1. Should they create a tax break for people, to offset any pass-through of the tax in prices or use the $150 million a year to fund education? 
2. If they do create a tax break, should every Oregonian get the same $50, or should tax rates be cut by ¼%?
   

This week is the week to reach out. Go to your legislators’ town hall, call their Salem office, or send an email and let them know that you think. 

Monday morning the first Public Hearing on disconnecting from this federal tax scam will begin at 8:30.

First Oregon made national news for its investor-centric use of Congress’ Opportunity Zone tax scam. The Bloomberg story “Cashing in on an Opportunity Zone” appeared Friday in the Oregonian with a great map showing exactly the outlines of the “low income” zone covering much of downtown and inner eastside Portland.

An online comment on that story hits it on the head: “In short, the city of Portland is gifting this largesse to the already wealthy at the expense of the poor it was intended to help. You mean, government just hands out favors to their friends? Say it ain’t so! It’s as true of Democrats as it is Republicans. This is public corruption. Braver men would have tarred and feathered these people.” 

And another, “Democrats cry about tax breaks for wealthy investors then give tax breaks to wealthy investors. Just like New York and Virginia did for Amazon.” Yup, it’s true, the city of Portland did ask for those specific census tracts to be named by the Governor as areas eligible for the tax breaks.

In Saturday’s story, “Oregon Goes Big on New Trump Tax Break” local writers Njus and Borrud continued the discussion. They captured some choice words explaining the program from a conversation within Business Oregon: “It creates domestic tax havens. If I’m an investor, I park my capital gains in the safest company I can find in one of these zones and wait ten years to withdraw…tax free.” Their Oregonian story points to folks already signing up to get in on this investors’ bandwagon.

But we don’t have to stand by and let this eat away at Oregon’s tax revenue. 

HB 2144 disconnects Oregon from the effects of the federal law, saving an estimated $10.5 million in lost revenue in the current budget and $15.9 million in the next, but likely hundreds of millions beginning 12 years from now when folks start selling their property and pay no tax on their gains.

Please send testimony to lro.exhibits@oregonlegislature.gov by Friday at 4:00 so it will be posted for legislators to read during the hearing Monday morning. The House Revenue Committee is having a public hearing on the bill in Hearing Room A, beginning at 8:30 am. OF COURSE it would be even better if you came to the Capitol and testified, but do what you can, please. The hearing is in Hearing Room A.