Protecting Oregon from the Next Financial Storm
Watching the Same Old Oregon Train Wreck
by Mark Hass
From the Friday May 29, 2009, issue of The Oregonian
Crane your neck and look. You're watching the Oregon train wreck.
The cause is the same as it was in 2002: Oregon's tax system brings in too much in good times and not enough in bad times. In good times, we're constitutionally required to send refund checks to taxpayers. In bad times, the wheels come off the tracks.
Criminals are let go. Teachers are laid off. Frail seniors lose assistance.
Oregon loses its mojo.
No other state is as dependent on one tax as Oregon is with its income tax, resulting in a revenue chart that looks more like the Swiss Alps than gentle rolling hills.
You'd think the people of Oregon, where the fastest computer chips in the world are manufactured, could devise a better system. But instead of reforming the 1930s tax code, we argue about tiny bits of it. Like the beer tax.
Nothing wrong with a furious debate about Oregon's beer tax, which filled the Capitol in March. But what about the other 99.996 percent of our tax code? That debate is playing out in a ghost town, silently, with a few tumbleweeds blowing about.
Tax reform is not sexy. To politicians, it sounds like tax increase, and they tend to steer clear. When it does come up, the discussion often deteriorates into whether Oregon needs a sales tax.
Restructuring isn't secret code for a sales tax. We could dump a freight car load of tax breaks in exchange for cutting the income tax in half, for example. There are other ways to skin this cat.
The textbook political reflex is to appoint a special blue-ribbon task force to study tax reform. I've been on two of these commissions, and always the recommendation is that Oregon should move away from her heavy reliance on the income tax. And always these recommendations go nowhere
As Aldous Huxley said, "Facts do not cease to exist because they are ignored."
The latest tax restructuring task force threw in the towel when a December 2008 poll showed there was no public appetite for changing tax schemes. So legislators walked away. That doesn't feel like leadership to me. It feels like followership.
But maybe it's the smart play. Legislators are supposed to represent their constituents. If the constituents aren't interested, let's move on.
Or, everyone with a stake in tax reform -- parents, students, seniors, taxpayers -- could begin to engage political leaders in a way that's never been done before. If we were starting from scratch and had to create a new tax system, we'd build one that was balanced, fair and strategically designed to bolster Oregon's economy and our exceptional quality of life.
So why don't we do that?
It's a tough, incredibly dull subject that can't be dumbed down or summarized in eight-second sound bites. I believe people will tolerate thoughtful explanations of why Oregon needs to restructure our tax code. In fact, I sense Oregonians are hungry for solutions to stabilizing schools and critical services.
Someday, the wreckage of the 2009 recession will be hauled away. The people and their scars will have moved on.
But if we don't change anything, there will be another wreck down around the next bend.
Mark Hass is a Democrat representing parts of Washington County and Southwest Portland in the Oregon Senate.
Mark Hass and his wife, Tamra, and their children, Isabelle and Sam.
