Measure 91 would make the rich richer, while state services undergo severe cuts
By DON McINTOSH, Staff Reporter
In the coming game of ballot measure Russian Roulette, one of the bullets threatening Oregon's quality of life is stamped "91."
Ballot Measure 91 is one of six constitutional initiatives sponsored by Oregon Taxpayers United that will be on the November 2000 ballot. A massive tax cut for corporations and the wealthiest individuals, Measure 91 would cut the state's general fund by one-fifth to one-quarter, forcing cuts in education, prisons, health care, and construction projects, among other things.
It would do that by allowing corporations and individuals to deduct the full amount of federal income taxes from the amount of taxable income they report on state income tax forms. Individuals can already deduct federal taxes, up to $3,000. Corporations can't currently deduct federal taxes. Thus, only corporations and individuals who pay more than $3,000 in federal taxes would save money under the measure.
Only two states allow unlimited deductibility of both personal and corporate federal income taxes - Louisiana and Alabama, and Louisiana may go back this November if voters approve a referendum that would eliminate deductibility of federal taxes in exchange for repealing the Louisiana sales tax on food.
Sizemore's Oregon Taxpayers United describes Measure 91 as "a 10 percent income tax cut for Oregonians," "a tax cut aimed squarely at the middle class."
In fact, the largest savings would go to those earning the most. The Committee For Our Oregon, the coalition organizing opposition to Measure 91 and two other tax cut measures, reports that a family of four making $47,000 a year would get a tax cut of just $24 a year under Measure 91. The vast majority of the tax cut, 72 percent, would go to corporations and those making over $100,000 per year. Corporations would get a tax cut of about 35 percent.
While the benefits of the tax cut would accrue most to the wealthy, the costs would be borne by all. The official estimate is that state revenues would be cut $936 million in fiscal year 2000-01, and $1 billion per year after that. Such a steep cut, between 18 and 25 percent of the general fund, would likely force across-the-board budget cuts in all areas supported by the general fund.
Currently, K-12 education gets 42 percent of the general fund; universities, community colleges and other education programs account for 16 percent; prisons, state police, and courts get 15 percent; and health care, senior and disabled services, child protective services, and other human services get 23 percent.
Based on Legislative Fiscal Office calculations, it's estimated that if the 1999-2001 cuts were made across the board, K-12 public schools would lose $266 million; higher education and community colleges would lose $81 million; health care programs would lose $77 million; senior and disabled services would lose $28 million; and prisons would lose $48 million.
"This measure is so extreme that even people you'd think would be Sizemore's allies are not," said Steve Novick, a pro-union political consultant with the Center for Constructive Citizen Action. The anti-Measure 91group Committee For Our Oregon counts among its supporters a number of prominent business leaders, who are led to oppose the measure out of concern that the cuts in state services will destroy Oregon's quality of life, even though it may mean short term financial gains for their companies. Fred Miller of PGE, Mike Salsgiver and Jim Johnson of Intel, and Lynn Lundquist of the newly-formed Oregon Business Association are funders of the committee.
But unions are its backbone, especially the Oregon Education Association (OEA), Oregon Public Employees Union (OPEU), Oregon School Employees Association, and American Federation of State, County, and Municipal Employees, which stand to lose substantially if state revenues are slashed.
In the unsuccessful 1996 campaign against property tax cut Measure 47, unions were the heavy weights fighting a measure that would cause cuts in state services. The OSEA put in $85,000; OEA $753,000; AFSCME and OPEU put in over $300,000 each.
"The rest of Oregon is finally beginning to join organized labor in saving Oregon from massively destructive ballot measures," Novick said.
© Oregon Labor Press Publishing Co. Inc.