Legislators should take message on taxes to heart
Published 8:00 pm Tuesday, March 21, 2017
Oregon voters place a top priority on K-12 public schools but don’t really trust the state to tax and spend wisely on education, new opinion polling indicates.
Our Capital Bureau reported earlier this week on a poll commissioned by the Oregon School Boards Association. All polls, especially those sponsored by entities with a vested interest in their findings, must be viewed with intelligent skepticism. But the new poll results ring true.
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According to the poll, 60 percent of the public believes any new tax money should be earmarked for state education and should be combined with spending cuts elsewhere. Ironically, this mirrors what the business community itself has indicated it would support. Legislators need to take this to heart.
Oregonians are big believers in public schools. You don’t need a poll to know this. Time spent in any Oregon community or neighborhood is a revealing lesson in how schools are fundamentally bound up in our lives and our sense of who we are as a people. We’re united around the idea that schools impart essential knowledge and social skills, partnering with families in preparing children for lives every parent hopes will be financially rewarding, intellectually gratifying and emotionally fulfilling.
Anxiety: As our nation and world become more complex and demanding, any sense that schools aren’t fulfilling their vital mission is certain to provoke anxiety. While more money is rarely, if ever, a complete solution to any problem, Oregonians are strongly inclined to bolster school funding. Ninety-three percent of voters say it’s important to fund K-12 education. Nearly two-thirds would support boosting taxes on corporations if the proceeds were certain to go to schools.
But the state just overwhelmingly rejected new corporate taxes in the form of Ballot Measure 97. This was despite the objective fact that companies contribute less to state coffers than voters commonly believe — less than 6 percent of general fund revenue, by the Oregon School Boards Association’s reckoning, while citizens believe the number is around 36 percent.
In rejecting Measure 97, voters didn’t trust that new revenue would be well spent and feared the taxes would be passed on to us in the form of higher prices. And as a matter of fact, Oregon firms already pay a lot of taxes — an effective rate of 7.6 percent, third highest in the far West.
Budget gap: Faced this year with a $1.6 billion gap between revenue and expenses, legislators are struggling to find enough money for all the state’s priorities, including more for schools. A majority of the public may say they support targeted cuts coupled with some tax fix, but the devil is very much in the details.
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The Tax Foundation on Monday released its latest analysis of fiscal burdens in the 50 states and Washington, D.C. It found Oregon ranks 10th in state and local tax burden as a percentage of state income. It has the sixth-highest individual income tax collections per person in the country, $1,814 compared to the U.S. average of $967. On the other hand, it is smack in the middle in terms of state and local property taxes — 25th, with average collections of $1,350, less than the national average of $1,462. It’s worth adding that the Tax Foundation gives Oregon good marks for its current business tax climate, rating it 10th best in the country.
So it’s fair to say Oregonians aren’t undertaxed, an understanding reflected in the continuing strong rejection of a general sales tax, even if it went to education, according to the poll. But it’s also fair to observe that a state’s citizens get what they pay for. Some of lowest-tax states on the Tax Foundation’s 2017 index — Mississippi, Louisiana, Alabama — aren’t models of civic success.
Difficult choices: So what should we do in Oregon? Clearly, some very difficult choices will need to be made. Most Oregonians want to protect and enhance public education, but will have to recognize that doing so will force undesirable cuts elsewhere. Elected leaders and state agencies have to embrace the same conclusion, that it is time to zealously root out wasteful spending, while circling the wagons around schools and a few other paramount priorities.
On the tax front, the new polling suggests considerable support for dedicating 2 percent of income tax kicker funds to K-12 education — particularly a rainy day fund to see schools past budget crises like the one they currently face. Beyond this, a business tax hike with strict links to education might just stand a chance.
Voters feel they have been burned too many times. State leaders must commit to governing in accordance with the wise words of that favorite primary school role model, Dr. Seuss’ Horton: “I meant what I said and I said what I meant. An elephant’s faithful one hundred percent.” Promise only what you can reasonably achieve, tax only enough to achieve it, and then rigorously keep your promises.