Oregon Tax Dollars: Where do they come from and where do they go?

Kari Chisholm FacebookTwitterWebsite

With a giant hat tip, here's a pair of charts from the Bus Project that illustrate exactly where tax dollars come from in Oregon - and where they go.

Oregontaxes

Anything surprise you here? What should we change? Discuss.

Comments

  • jonnie (unverified)
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    Would the beer tax proposal fall under the 4% of other?

    http://online.wsj.com/article/SB123976316293519743.html

    Nothing suprises me. it would be nice to compare these with the charts the legislature published shortly after the passage of BM #5 those many years ago. I thought Education was more than 54% then.

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    It'd be interesting to see an estimate of how either Wyden's plan or single-payer health insurance would affect where the money goes. I'm assuming that health-care coverage for teachers, administrators and the rest of the human infrastructure in education is part of the education total in the lower pie chart, as well as health services/coverage provided for employees/clients is part of the Human Services total.

    That said... one thing really irks me about the way Oregon does personal income taxes. Every year when I do my taxes I get a decent refund from Federal but owe roughly 30% of that same amount to the state. I'd be really nice if they could get on the same withholding page or at least close to it.

    Now more than ever there are lots of people living paycheck to paycheck. Some of them have to find it difficult to scrap together the taxes owed to the state given their precarious finances. Sure, they could drop their withholding deductions and just get an even larger refund from Federal. But again... these are people living paycheck to paycheck. It seems... onerous for them to have to do that rather than just fill out the W-4 based on their actual status.

  • Anon (unverified)
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    Yes, I am surprised that the property tax is not broken out separately. Is it included in the 4% "all other"? That seems doubtful. I wonder if whoever made the chart at the Bus Project made an error.

  • Henry Kraemer (unverified)
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    Anon,

    It's cool to see people getting into the details. Property tax dollars go to local governments, not to the state (so it wouldn't appear in a state revenue pie chart).

    Here's more information on property taxes, if you want it.

    http://www.oregon.gov/DOR/PTD/property.shtml

    Henry Kraemer, Bus Project Policy Dude

  • GLV (unverified)
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    Which category does transportation fall under?

  • Bill McDonald (unverified)
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    A pie pan with the ingredient tax sources and a pie with a crust for the finished product. Good work. I mean it - I like that.

  • Mike (unverified)
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    Henry,

    Regarding property taxes - they all don't stay local.

    Equalization shifts some of the school tax portion from richer districts to poorer districts.

    The last time I checked the details, large districts like Beaverton only received 85% as their share of the total property taxes collected for education within its district boundaries.

    So again, for the pie charts to be a bit more informative, the amount allocated education from income tax revenues should be identified, as well as the amount allocated from property tax revenues.

    Similarly, corporate income taxes tell part of the answer. With businesses and corporations also paying property taxes,t hat contribution should be illustrated.

    Finally, there is a lot of property that is not on the tax rolls. The value of this property might also be of interest.

    Overall, the pie charts as-is show a few key points: personal income taxes are the largest source of tax revenues. With incomes down (or people leaving or unemployed) the impact is huge.

  • Todd Foster (unverified)
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    Not having seen a State of Oregon budget in person for some time I would guess that the pie chart shows only the general fund, which is the discretionary portion of Oregon's budget the legistlature controls.

  • SCB (unverified)
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    Mike - RE: property taxes.

    I think you're wrong on the details, but right about the effect.

    As I understand it, the property taxes for schools stays in the local budget. Then the State funds are adjusted up or down so that each district ends up with the same funding level per student. - Really a moot point in one regard.

    However, saying that a place like Beaverton only gets 85% of its property tax for schools, and the money goes elsewhere is somewhat deceptive. For example, in my area, the Crook County Schools undoubtedly receive more State funds for education than Beaverton. Why? Not because we are "poor", although we are. It's because the largest land owner in the County refuses to pay one dime of property tax. This land owner happens to own very little land in Beaverton, Portland, or for that matter Salem or Eugene. This land owner has a few administrative buildings in those areas, but in my area literally owns half the County.

    Who is this dead beat land owner?

    Yep, the Federal Government.

    I guess one way to look at this is that when people from Beaverton are vacationing at the Prineville Reservoir, camping in the Ochoco's, or otherwise enjoying Federal lands, they are getting back some of the value in this weird tax dollar/value shifting system we have. To put this into one sentence:

    A family from Beaverton enjoying low cost recreation on Federal lands in Crook County is getting back "value" that was money spent on the Crook County Schools sent from the State, that otherwise would have gone to Beaverton, because the Federal Government doesn't pay property taxes on that land in Crook County.

  • Anon (unverified)
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    Henry,

    Thanks for the clarification. I still think the chart doesn't tell the whole story, since 44% of property tax dollars go to education (mostly K-12), which (as Mike pointed out) does go through Salem before being sent to local districts. I guess disentangling state versus local taxes is a challenging task, especially with education dollars.

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    Technically it is true that property taxes stay in their home districts. As SCB says, the amount of income taxes that goes to each district to supplement that amount varies wildly.

  • Terry Parker (unverified)
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    The primary problem with the Oregon’s tax system is glaringly apparent in the first pie chart. 82 percent of the revenue comes from the personal income tax while only five prevent comes from the corporate income tax. These two parts of the pie need to be equalized as they were some 50 years ago. Just a couple of years ago the same chart showed the corporate income tax at approximately eight percent. Obviously the split is headed in the wrong direction – possibly due to all those tax give-a-ways and energy tax credits handed out like free candy to corporations. It is time to change direction and increase corporate taxes rather than continuing to place an increased burden on the backs of the diminishing middle class.

  • Chuck Sheketoff (unverified)
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    Property taxes do NOT flow to Salem. We have no statewide property tax.

    The Bus Project pies represent General Fund and Lottery spending and resources -- they are neat and graphically pleasing re-makes of the pie charts that are presented in the Governor's budget document (PDF) available online here.

    Sadly, 88 percent of Oregonians cannot name the state's major revenue source and major spending category from short “multiple choice” lists.

  • Pedro (unverified)
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    Sure Kari -

    Public safety & prisons looks pretty bloated compared to human services. However, the problem is on the resources graph. Time to adjust the tax tables at the upper end of the income scale!

  • mp97303 (unverified)
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    possibly due to all those tax give-a-ways and energy tax credits handed out like free candy to corporations.

    Let's not forget these go to individuals as well. I rec'd $1840 in tax credits for installing a new tankless water heater. You can bet you backside I took them as well.

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    I'd love to see that 82% income tax more like 55% sometime in my lifetime.

  • Assegai Up Jacksey (unverified)
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    Who is this dead beat land owner?

    Yep, the Federal Government.

    But according to Terry Parker, the free loaders are the cyclists! Use that as a gage.

    So the chart looks like the War on Drugs, all sources, is the State's 4th largest expenditure. Way ahead of the environment. So, when people say, "the environment is big in Oregon", say, "but the WOD is many times bigger; we're really no different!"

  • jonnie (unverified)
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    Perhaps you start by not increasing the State budget by 27% in a recession.

    Bye, Bye brewpub.

  • mp97303 (unverified)
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    I'd love to see that 82% income tax more like 55% sometime in my lifetime.

    Then create and nurture more businesses

  • Douglas K. (unverified)
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    What to change?

    A more even balance between personal and corporate taxes.

    More money for education, less for prisons.

    Not all that hard of a call, given that the chart is so light on detail.

  • Rose Wilde (unverified)
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    It would be a good idea to look at your property tax statement closely for a few things: where does the money go, real market value over the last several years, and the assessed value. For kicks, compare over time the market vs. assessed value. It is likely that the assessed value of your property NOT keeping pace with market value.

    To see where your property taxes go, look at your latest property tax statement usually issued from your County Elections Office. I live in Lane County, which has one of the lowest property tax rates in Oregon -- $1.279 per $1000 assessed value of taxed property.

    (Bear in mind that this level was set by OREGON VOTERS. Lane County residents CANNOT increase their taxes because of statewide measures passed by the voters in the early 1990s.)

    So, if my total bill were $100 (unrealistic, but to illustrate the point simply), the breakdown of those funds would be (rounded):

    -Community College $5 -Ed. Svc. Dist. $2 -4J School District $40 -local option (for 4J)$1 Education total----$58

    -Community College bond $2 -4J bond 1 & 2 $11 Education bonds total----$13

    -Lane Fire District $16.50 -Fire Patrol 1& 2 $2.50 Total fire----$19

    -Lane County $10 -Lane County bond $1 Lane County total----$11

    So, as you see, none of this money actually goes to Salem. Also, the state provides additional funding over and above this to all public education (higher education, community colleges, k-12, and early childhood and probably more). The state is still the primary funding source for local school districts, and the proportion of k-12 education budgets coming from state sources have increased since the passage of measure 5.

    Interesting to me... Measure 5 didn't provide immediate tax decreases for the Portland suburbs that most avidly asked for it -- because the bill included updating the assessed value of homes. Since this was in the 1990s, Portland suburban home values were increasing and assessments were far out of date. Measure 47 attempted to "remedy" that, and the legislature passed measure 50 to amend some of the 47s worst effects.

    Real market value of the house we bought in late 2005 has increased about 36% (as of 2009 assessment statement). The assessed (taxable) value has only increased 9%. This is a result of measures 5, 47 & 50.

    Fortunately for local government, assessed values are SO far behind the market value of most property, that even if the real estate market tanks badly, the assessed value will probably continue to rise each year, insulating local government somewhat from severe revenue fluctuations.

    So, what does all this tell us?

    1) Tea party activists should consider that when they object to paying state and local taxes, they are essentially saying they refuse to pay for education, human services, fire protection, and public safety (police, prosecution, jails and some other stuff).

    2) Should assessed values of land really be limited to 3% growth per year?

    3) Since the federal payments in lieu of taxes are temporarily reauthorized for four years at less than 1/3 of their previous value to Lane County (and no doubt other counties), might it be time to take another look at the maximum property tax rates for counties? (these max rates assumed federal payments would offset the lower tax rate).

    4) Looking more deeply, how did the Multnomah County decision to enact an income tax (mostly corporate) relieve pressure for a statewide remedy to the problems introduced by measure 5, 47 & 50? Should Lane County or other counties consider doing this too? What is the legislature doing about this (so far some talk, but no proposals that I have heard of, and I've asked).

    And thanks to the Bus Project for making budget charts a little more interesting! I am a new member of our county budget committee and let me tell you, I wish we had more pie to slice.

    Rose Wilde Lane County

  • George Anonymuncule Seldes (unverified)
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    I suspect that this presentation also leaves out agencies such as the Public Utility Commission and Department of Energy, which get their funding from regulated utilities, rather than the general fund -- although, in the case of Energy, they give away a lot of tax credits, and it's not clear where that appears in the spending pie chart.

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    That was a fascinating breakdown, Rose. Thank you for that insight.

    And I never thought I'd say this, but I agree with Terry Parker. It's time for corporate citizens to pay for their role in our economy and communities. An increase in the corporate income tax and the dissolution of the corporate tax kicker are certainly a step forward.

  • Peter Hall (unverified)
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    Let me rant again about how regressive the Oregon tax system is. No other state I know of depends on the income tax like Oregon does. Montana also only has an income tax, but its top rate is 7% and it has a higher threshhold for lower brackets. Montana has more income from a variety of business taxes. I paid, effectively, half what I paid in Oregon on the same income.

  • Brian O'Donnell (unverified)
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    This is somewhat off topic, but I just came from a local school district meeting where our local state representative was (in my opinion) posturing about his desire to support school funding, but the "majority" is unwilling to cut other programs to do so. Is there any objective data out there that shows reds vs blues track record wrt funding K-12 education?

  • Fireslayer (unverified)
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    There is a lot more money in the Oregon Legislative Budget than is being discused here. Consider the new paradigm of Obama's neo-revenue sharing and in particular health care related monies.

    We visited with Sen. Alan Bates tonight at First Unitarian here in Portland tonight. Occasional BlueOrg contributor Chris Lowe was present and acquited himself admirably discussing what this page seems to cut class on the great health care debate of 2009.

    Dare I speculate. Oh let me count the ways. Sen Wyden has proposed the Insurance Industry Subsidy Act that rules out a public option or Medicare for All option and goes straight to straight insurance premium subsidies. It locks in the 30% inefficiency that mean(s?) testing and good old fashion greed brings forth. All of this, need I say, in the name of "free enterprise" (his phrase.) How much of such hypocricy can a thinking person stomach,

    Darn little. New polls show 60% of the US voting public supports single payer. Cocktail party liberals up to their pie holes in insurance company money are way behind the curve on this. Which is to say the self described denizens of Change, the Dem Congress.

    And the best li'l blog in Christendom, Blue Oregon is heard not a peep.

    Get in the game, Karl.

  • Fireslayer (unverified)
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    I neglected to mention in the previous post that Earl Blumenhauer was very good in pointing out that the best we could hope for was a public plan or Mediare for All option in the 2009 Congressional Record.

    Sorry for the previous post on a unrelated topic when this thread did not appear on my immediate screen after previous posting.

    Blue Oregon should lead the way on debate. Sen. Bates noted what we should all take pride in which is that Oregon has always been at the vanguard of health care reform and now that we are seeing the debate playing out in simultaneously in the Congress and the Oregon Legislature, this page should be a medium for this crucial discussion.

    HB 2009, if it passes extant, it could be the template for national refom. The cutting edge of this debate should be on this page.

    Gentle nudge.

  • Fireslayer (unverified)
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    I neglected to mention in the previous post that Earl Blumenhauer was very good in pointing out that the best we could hope for was a public plan or Mediare for All option in the 2009 Congressional Record.

    Sorry for the previous post on a unrelated topic when this thread did not appear on my immediate screen after previous posting.

    Blue Oregon should lead the way on debate. Sen. Bates noted what we should all take pride in which is that Oregon has always been at the vanguard of health care reform and now that we are seeing the debate playing out in simultaneously in the Congress and the Oregon Legislature, this page should be a medium for this crucial discussion.

    HB 2009, if it passes extant, it could be the template for national refom. The cutting edge of this debate should be on this page.

    Gentle nudge.

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