AFL-CIO's Nesbitt tells City Club tax reform needed

Oregon AFL-CIO President Tim Nesbitt took the message of the labor federation to the City Club of Portland April 11 - and won a rare standing ovation.

The club is composed of opinion leaders from business and the community and is influential in local politics. City Club staff members, who schedule a weekly public affairs forum for members, invited Nesbitt after labor's success in Oregon elections last fall. Nesbitt said he used the talk to communicate that the labor movement is important not only to union members but to workers in general.

"When our labor movement is strong and successful, the benefits spread to working people far beyond the ranks of union members," he said.

When the labor movement is weak, on the other hand, real earnings for all workers decline, the incidence of poverty increases, and fewer jobs provide pensions and fully-paid family health benefits.

Non-members should look to the labor movement as a partner in building a more productive economy and a more just society, Nesbitt said. Nesbitt noted labor's role in increasing the minimum wage and in defeating bad ballot measures. The biggest applause came when he described labor's long campaign to shut down the anti-government ballot measure business of Bill Sizemore.

But the crux of his talk was an appeal for support for labor's agenda in the 2003 session of the Oregon Legislature.

Oregon is in grave crisis, Nesbitt said. "We have the highest unemployment rate and the highest hunger rate in the U.S., to which we came close to adding the shortest school year in the nation as well."

The recession is deepening, and if the Legislature proceeds with plans to rebalance the budget with no new taxes, the reduction in school funding will be the equivalent of cutting the school year by 30 days in every district of the state, plus dropping 150,000 Oregonians from the Oregon Health Plan.

"This is a prescription for human tragedy and a one-way path to economic failure," Nesbitt said. "We can't expect to compete in a full-time world with part-time schools and substandard services."

"We must fix the state budget," Nesbitt said. "We have to solve the structural deficits of our tax system, because these problems are so big, we can't just grow our way out of them, and we can't patch them over by cleaning out the cupboards and the sock drawers and borrowing 10 years worth of tobacco settlement money to fund 30 days of school."

The crisis isn't a spending problem, Nesbitt said, it's a revenue problem - state tax breaks for corporations have increased in recent years.

Right now for every dollar the state levies in corporate income taxes, it collects only 55 cents; the other 45 cents is written off in the form of tax breaks. Some of those tax breaks serve worthy purposes, Nesbitt said, but too many show too little public benefit.

The Oregon AFL-CIO, working with other groups in the recently-formed Oregon Revenue Coalition, identified more than $4 billion in tax breaks that didn't appear to serve any public purpose other than to reduce someone's taxes, such as a $21.7 million per biennium subsidy for corporations that have foreign operations, or $42 million in deductions for vacation homes and second homes. "What's our priority here � subsidizing second homes at the beach or teaching second-graders in our schools?" he said.

With support from other groups, the Oregon AFL-CIO has helped introduce a number of bills to ease the present budget crisis - by reducing corporate tax breaks or restoring business tax contributions to the level of previous years.

"If the Legislature doesn't act to address our need for stable and adequate revenue to fund schools and public safety and human services, our unions are prepared to bring to the ballot in November 2004 the best, fairest and most feasible tax reform proposal we and our allies can devise."

Nesbitt's talk was broadcast on Oregon Public Radio, and resulted in a ten-fold increase in the number of hits to the labor federation's Web site - www.oraflcio.org - in the following week. The full text of the City Club talk is available at: www.oraflcio.unions-america.com.