By Rep. Mary Nolan (D-Portland). Rep. Nolan is the Oregon House Majority Leader.
When it comes to balancing Oregon’s $15 billion general fund budget, here’s where House Democrats agree with the state’s most active business groups:
- Oregon’s economy has been hit hard by the national recession. Our first priority is to protect jobs, innovation and the educated workforce and stable system of civil laws that help businesses thrive.
- Maintaining quality schools, consistent courts, affordable healthcare, an efficient transportation system, responsive police and dependable fire protection is a key part of restoring a strong economy and maintaining strong communities.
- In balancing the state’s budget, the legislature should use all of the following tools, including:
- tightening our belts and making taxpayer dollars go further by improving efficiency, accountability and transparency;
- investing federal stimulus funds to preserve or create jobs here in Oregon;
- using about half of Oregon’s Rainy Day Fund and Education Stability Fund to pay for vital services like classroom instruction, independent living for seniors and police officers to ensure safe communities.
- Finally, House Democrats and Oregon business groups agree that these steps are not enough, and a modest increase in revenue is necessary to protect Oregon families and businesses from further distress.
This is where our approach to taxes, and ultimately the plans we brought forward, differ: Both the Oregon Business Association and Associated Oregon Industries have proposed revenue plans of their own that raise more in taxes than the plan the legislature passed today. And the plans brought forward, one by OBA and one from AOI, would significantly increase the tax burden on small businesses and middle-class Oregonians. Our plan does not.
Below are some significant areas of difference between the plan we passed today and the plans offered up by OBA and AOI.
Legislative Proposal Business Group Proposals Impact on Small Businesses Lower minimum tax on small business ($150) Higher minimum tax on small business ($250) Smaller increments on minimum tax for small-to-midsized businesses Bigger steps on minimum tax for small-to-midsized businesses Does not raise taxes on businesses with profits below $250,000 Increases tax rate on ALL business profits Long-term Reliability Update of alternative corporate minimum tax is permanent Update of alternative corporate minimum tax is permanent Permanently establishes 1% additional marginal tax rate on net profits over $10 million All rate changes expire within 4 years Balance between individual and corporate taxes Begins to restore balance by modestly adjusting high-end rate on net profits Perpetuates disproportionate tax burden on individuals Progressivity Makes changes permanent to make tax system more progressive and more fair Proposes across-the-board increases on businesses and individuals, making tax system less progressive and less fair
So here’s why House Speaker Dave Hunt and I, along with Revenue Committee Chair Phil Barnhart, led the House Democrats to pass HB 3405 and HB 2649.
Our proposal is more finely tuned, and while it does not raise as much in the next budget period as the business plans, it offers an equitable, long-term way to protect schools, health care, police, firefighters, courts and prisons – without placing additional financial burdens on middle-class families and small businesses.
Under the legislative proposal, and ONLY the legislative proposal, the bulk of new revenue is paid by wealthy individuals and big corporations. Middle-class earners will see NO increase in their taxes.
Simply put, the biggest difference between the revenue plans being offered in Salem is that the legislative proposal makes Oregon’s tax system more fair. Our plan is about fairness. Fairness to Oregon families. Fairness to Oregon small businesses.
Fairness should not be a temporary goal.