The fear is that OBA has gone wrong in two places:

1) Being too accountable to the large corporations -- Nike and Intel -- and not quite enough accountable to the small corporation and middle class individual.

2) not fighting nearly hard enough for progressive taxation, that is, taxation based on ability to pay.

The OBA proposals were for flatter, more broad-based taxes. Those have failed in the past (most people aren't rich), that thinking is part of the problem, and the philosophy is just a bit too Wall Street Journal.

The OBA lost its footing on this one.

Jeff, thanks for clearing up the issue. It seems that OBA had a very reasonable offer to assist the state in this time of need. Unfortunately, the democrats in control of the legislature swatted your plan into the cheap seats. It is appreciated that your group saw the need for a change and was willing to help guide that to a meaningful change that helped Oregon AND kept businesses here functioning and profitable.

Don't worry, the democrats in control will come back to you for help, just as they did when Sleepy Ted vetoed the School budget. They'll come back to OBA when the voters soundly overturn this huge tax increase at the polls. This will be overturned despite the democrats and Steve Novick's best attempts to confuse and obsfucate the vote.

There has been much talk of who actually pays when taxes are raised on businesses. In the current issue of Fortune, an article by Geoff Colvin argues that it is in fact the workers that pay.

"Research has shown that when business taxes are raised by a dollar, $.70 to $.92 of it comes out of employees' pay. When workers realize wake up to that fact, they may decide this is one time they don't want the White House beating up on business."

"The last and perhaps most important point that I want to make is that in putting forth our corporate tax proposal, OBA was attempting to bridge the gap between those who wanted to raise taxes during this down economy and those who opposed any tax increases at all."

Let me be one of those obnoxious data-driven decision making people here.

In a "down economy", the budget must be balanced. It can be done by gimmicks, by draining all reserve funds, by raising revenue, or by cutting spending. The folks on Ways and Means, esp. on the subcommittees, did the hard work of plowing through and making all the budget cuts. What did OBA tell W & M members they should cut if their proposal was not enough to balance the budget? Or was this just about coalition power politics ---the equivalent of playing chess?

Yes, this post makes OBA look really good.

However, what I gleaned from a variety of sources is that in order to balance the budget, X dollars were needed. To that end, something like 2 billion dollars of cuts were made. That left a hole the size of Y dollars.

My impression from everything I have heard and read is that the OBA proposal, while noble, was less than Y dollars and there was no mention of how the remaining fraction of Y was to be made up. If that is the case, then the above, while noble, did not solve the problem of balancing the 2009-11 budget. How did OBA think that budget should be balanced then? More cuts? More fees? Tax increases on someone else? Or "not our problem--legislators should figure that out"?

And this sounds like there is no room for "we the people" in current Oregon politics, it is all about feuding groups:

"In other words, we offered legislators an opportunity to head off what is guaranteed to be a brutal battle between the two big coalitions that seem to relish in these fights."

There is another point of view--that individuals matter. I heard a speech last week where the speaker talked about the importance of citizen action in tax reform, "Tax reform begins in rooms like these". The speaker was not a legislator.

"We offered legislators..." sounds like addressing a single celled organism where 90 individuals were supposed to agree en masse. Why should any legislator have said "Yes, O wise OBA, we will do exactly as you propose and not ask any questions" when there were plenty of tough questions asked of everyone else in this process?

Believe it or not there are Oregonians who are not anti-taxers and don't belong to a union or a group like Onward Oregon which is part of the other "coalition".

To say all politics is binary--about 2 coalitions--and no one else should have a voice to ask questions is either misguided, cynical, or both.

Sorry, but my respect for OBA has sunk this session--they seem to be just another group playing power politics and how dare an ordinary citizen or a legislator ask them questions!

With a former legislator like Ryan Deckert as President, OBA should know better than to present a tax plan to the Legislature with a take-it-or-leave-it-without-any-changes demand. It doesn't work that way.

Their unwillingness to compromise on taxes this year has seriously compromised their future effectiveness in the Legislature. Sad. Very sad.

The test of OBA as a supposedly progressive coalition is whether they stand with the education community, AARP, human services, health care groups and grassroots supporters who will defend against the AOI/Mark Nelson referendumb effort, or whether they will work to defeat the legislative package and force nearly $800 million in new cuts to Oregon classrooms, nursing homes, and health care programs.

Going to the campaign formation meeting today with the anti-tax groups while claiming neutrality in the overall fight is just more hogwash like Jeff Green serves up for his corporate masters above.

Progressive is as progressive does, OBA. Time to take a stand.

OBA has been talking out of both sides of its mouth all session. They say they favor raising the embarrassing $10 corporate minimum all right -- as long as its in a (mostly) temporary package that spreads the burden among small businesses and keeps Nike, Intel and the rest of the big corporations who really call the shots for OBA off the hook.

Shameful and weak PR campaign, Jef. Somebody give the man another "F".

Still, it's better than the weak sauce Hass served up trying to cover the terd he laid when he held up the entire legislature on OBA's behalf.

支持

The biggest lie in the post above is the 11th-hour line.

OBA had long been aware of the idea of making YES votes on referendums mean you support those who put the idea on the ballot, and NO vote meaning the status quo.

Indeed, this idea has been out there since February.

And it was clear from the messaging from OBA that they were giving a "take it or leave it" on their budget offer. That OBA wasn't open to a more ongoing balance of tax fairness (instead of one that goes away in two years) means OBA's just another group undermining the need to fund Oregon's schools with stable and fair funding.

The question really is:

Is OBA in support of the teacher layoffs, the shorter school years, the released prisoners, the closed state parks, and the packed emergency rooms?

Where does OBA stand?

Why the Blue Oregon blackout on the $4.9 billion in ending fund balances already held by state government agencies? Of that, 75% is available for use at legislators' discretion. That money would prevent any harm to education, or any other service.

These tax increases were entirely optional. Progressives just hate businesses, love taxes, and are using the economy as their excuse to jack up taxes.

Otherwise why the blackout?

Mike Radway: It was OBA that walked away from the negotiating table on these tax proposals, not the Legislature.

OBA had an opportunity to be relevant this year, and they blew it.

And OBA's strong leadership in 2007 to create a Rainy Day Fund with corporate kicker revenue was under the previous leadership of Lynn Lundquist, not Ryan Deckert.

thank you

A link to Anonymous's claims above is here

Back to Basics was a "fund sweep"---at a local town hall meeting where our state senator and 2 state reps also had someone from Legislative Revenue and Legislative Fiscal, some of this was discussed.

Some of those funds are trust funds, and our state senator told the story about the SAIF funds being used to balance the budget in the 1980s recession. The funds had been paid in by businesses for insurance. They had not intended their money to be used as part of the general fund. They went to court. The court awarded them repayment plus interest.

Why does no one talk about the true cost of Back to Basics?

I believe it was a mistake, especially since not all the Republican members of Ways and Means were in on the writing of the proposal.

The OBA has lost an enormous amount of credibility by mirroring the efforts of the right-wing, neoliberal, out-of-study-funded FreedomWorks by attacking HB 2414 as somehow "underhanded."

What is underhanded and reprehensible is the OBA's lip service to political progressivity, but ultimately showing its true colors by opposing tax increases to those who've made out like bandits in the past 20 years.

The OBA agenda is to continue to balance the state's budget on the back of middle class Oregonians.

I hope the FREEDOMWORKS/OBA ALLIANCE gets its collective ass whipped in the referenda election.

Time to pay your fair share OBA. I am very proud of the Legislature.

The only difference between OBA and AOI is rhetorical...

Both organizations are more than willing to sell out their smaller members to keep their larger, more prosperous board members happy. They each have the pet governmental programs, and both are fundamentally unwilling to pay for it. OBA's proposal was a joke. I know for a fact that they spent no more than a day putting together their "budget" for the state...and virtually none of that on anything other than education. If you don't know what the fiscal needs of the state are, how can you draw such firm lines on revenue? When asked where the state could make up the difference on the competing revenue packages, they said to cut it out of human services...but not out of seniors. What a joke.

The legislature made the tax system fairer. OBA fought it because they wanted the fairness to be temporary. Corporate taxes get raised about once every 75 years in Oregon. The legislature had one bite at the apple and did a pretty good job. Fairness should not be temporary. Corporate greed certainly isn't.

In the last biennium the budget was increased by 20% based on the increase in tax revenues due to the "good times".

Fast forward to the budget for the next biennium. Another 20% increase was planned to "maintain current services". When the forecasts showed that tax revenues would come up short, the budget was "cut" so that the increase over the past biennium would only be about 4%. This is being loudly proclaimed as a "cut", and essential services are being held as hostage.

Folks, there is a recession! Revenues are down, business have less, and people are losing jobs and household incomes are down. The few corporations and businesses still whole are being tapped to make up for the shortfall in tax revenues.

Some argue here that biennium increases that are less than desired are "cuts", while others are chided for questioning the "yes" means "no", and "no" means "yes". Where is the condemnation for those who claim budget increases less than desired are "cuts"?

Hypocrites for sure!

What is needed is some truth from all sides.

The OBA has been politically confused from their start..and now is showing their true colors. Now that the Leg has acted its time for them to stop griping about what happened during session and take a stand on the tax referenda. I look forward to learning how Nik Blosser, Gun Denhart and the other progressive Democrats who started OBA out of frustration with AOI are able to steer the organization now that the issue will be before the voters. Their position on the referenda will show OBA's true colors. And they can't sit it out, because the only thing in the middle of the road are yellow lines and dead opossum.

Since so many of you support a minimum tax on a business with no taxable income, is it safe to assume you also support a minimum tax on individuals with no taxable income.

WITT

mp:

If you can prove the corporate tax passed by the legislature will raise the taxes for the locally owned small businesses (gift shop, landscaping/gardening company, office supply store, local farm that sells hay to other farmers or berries and other produce at a farmer's market, for instance), by all means make your case.

But do it with data from the bill, not just snide remarks.

What if a local accountant reads the final bill and says the impact on small local businesses (as opposed to large chain stores and businesses)is more nuanced than some of the screaming from AOI and others?

Look at the comments above from Insider2 and Robert Collins. Do you really think sarcasm will defeat their comments in debates among the public at large?

Some of the claims made above are just silly. What sets OBA apart? Well, acknowledging the importance of public services AND supporting specific additional revenue for them would be a big one, my friends. Unfortunately, OBA is all too unique an organization in our day and age. Please show me one influential business group in any state in the country that proposed raising its own taxes to fund general public services.

I don't know what OBA will do now on the referral. But unfortunately in a campaign environment, I'm afraid it won't matter much. On many things and to the frustration of many (including, sometimes, myself), the balance of power is held by the moderates. To win over the moderates takes time and data. I am surprised that every liberal person I've talked to about this whole topic was unaware that not one word of testimony was taken on any of this corporate tax legislation. The fact that this happened just unnecessarily gives fuel to the forces of low taxes and disinvestment. When I worked in the Legislature under Republican control, these are exactly the kind of process shenanigans that would've made us Democrats apoplectic. And they're no way to keep moderates in your coalition.

There will now be a very ugly campaign that perhaps could've been significantly marginalized. What is sad about this whole situation is that OBA worked in good faith with democratic leadership to address the problem of financial need, and, in fact, there was basic agreement on this issue.

Nik, I live in a district represented by a member of House Revenue. I have been watching those hearings as well as Ways and Means, and I know how to look up bill history.

I just looked up this bill, and discovered there were multiple hearings and work sessions in House Revenue, then the bill was sent to Ways and Means by prior reference. First it was heard in a Ways and Means subcommittee, then the full Ways and Means committee.

After the bill passed the House, it is listed as having been sent to Ways and Means, although no record of public hearing or work session. Thus Mark Hass's claim that there was no committee hearing in the Senate.

However, look at 2 things you said:

"To win over the moderates takes time and data."

"...every liberal person I've talked to about this whole topic was unaware that not one word of testimony was taken on any of this corporate tax legislation..."

You also said, "Well, acknowledging the importance of public services AND supporting specific additional revenue for them would be a big one,..."

I strongly admire all the members of Joint Ways and Means, esp. the members of the subcommittees. I have watched a number of their hearings online or on Oregon Channel. The folks who sat through hour after hour of an expert staffer saying, "This budget package is 99% of the Essential Budget level, with _ general fund, special fund, (etc.) revenue to finance their operations. This includes ----FTE. The Key Performance Measures remain the same although it might be difficult to reach them at the current budget level."

They knew the size of budget hole they needed to fill. They filled much of it with $2 billion or so in cuts. That was not enough, so instead of cutting more they raised taxes.

You may not agree with what they did, but they don't deserve criticism if anyone them did not vote the way OBA wanted them to vote.

You said, "When I worked in the Legislature under Republican control, these are exactly the kind of process shenanigans that would've made us Democrats apoplectic."

This legislature, while not as transparent as glass at all times, did not feature a Speaker who insisted on each caucus debating a "package" dreamed up in a small room be voted on with very little public process.

One thing that Minnis et al (but also sometimes Democrats) forget is that we don't elect lobbying organizations to write our laws, we elect legislators. Legislators who can choose to listen to any and all organizations lobbying the legislature. Or not.

Your statement, "Please show me one influential business group in any state in the country that proposed raising its own taxes to fund general public services." implies this is about feuding lobbying groups, not legislators representing we the people.

In the end, the legislators appear to have come to the conclusion that $2 billion in cuts, almost $800,000 in taxes was not enough to fill the budget hole without also taking money from reserves. They voted out money from the Rainy Day Fund because they decided it really is "raining" given the depth of the recession. They overrode a veto of money from educational reserves. There were not enough votes to do the GOP "Back to Basics" fund sweep (did all Republican legislators think that was a good idea?) and they balanced the budget.

You said, "What is sad about this whole situation is that OBA worked in good faith with democratic leadership to address the problem of financial need, and, in fact, there was basic agreement on this issue. "

OK, what was the "basic agreement"--more from reserves and less than eventually voted on in new taxes? Temporary vs. permanent (because of course, the state is now in better shape than it was a generation ago when the business vs. personal tax burden was balanced differently?). Who was the "basic agreement" with---the whole caucus in each chamber, or certain legislators who did not have the power to promise the votes of other members?

This is an old, old political story. Huge lobbying pressure on members who at the last moment decide to go with appeals from constituents instead. Leading figures who show up the first night of a platform convention and talk to "all the right people" and think they have an agreement. But then leave (they have better things to do than stay at a boring platform convention) and are not in the room when their platform plank is voted on. I went to one such platform convention some decades ago where that happened. The reaction to the passage of a platform plank those leading figures did not like was scornful. "They thought they had better things to do with their time, but the era of machine politics is over and they couldn't control individual votes in the room when the plank was voted on!".

It may be that we are living in a time of paradigm shift (or to put it more bluntly, go read the lyrics to Bob Dylan's THE TIMES THEY ARE A CHANGIN'). "The first one now will later be last" is something to ponder.

Like that labor vote on Saturday that only got 14 Senate votes, the "fix is in" only if the votes are there.

There is a Wayne Morse quote which begins, "I will exercise an independence of judgement based on the evidence of each issue....."and ending "...cast my vote free of political pressure and unmoved by threats of loss of political support".

Years ago, a friend worked for a coastal state rep. when the Tip Credit bill (for min. wage restaurant workers ) was being lobbied very heavily. The district has lots of restaurants. The Oregon Restaurant Assoc. was lobbying very heavily. My friend's boss was also hearing from servers in restaurants about how the tip credit would adversely affect their pay. He ended up at the last minute voting with the constituents against the ORA. Of course the restaurant lobby was furious! I was visiting my friend when one of the Democratic state reps. came to the office and said, "I know that was a hard vote, and I wanted him to have this--he deserves it" and handed over a copy of the quote, enlarged to fit on an 8.5" x 11" piece of paper.

My point is this: we need more legislators like that coastal state rep. who stand up to lobbying groups. Regardless of the group, it is the legislator who must make the vote and answer for it to the voters.

Mark Hass is one legislator who will have to appear in local town hall meetings, etc. and explain his vote. If the folk in the district like his explanation, he has a future. But if it turns out there are constituents who wish he'd been more like that coastal state rep., that is their right.

And even if every organization lobbying in the capitol thinks otherwise, the only thing they can do about it is not fund the campaign of anyone who they believe didn't bargain in good faith.

Don't sell moderates short. If there is a luncheon where a bunch of moderates are sitting around the table, and there are 6 different opinions at a table of 10-12 people, that is what makes independent thinking people moderate! They may like that kind of open debate instead of following an ideology that is way out in right field, way out in left field, or in the dugout promising to obey whatever a lobbyist tells them to do.

@LT

There was nothing 'snide' nor was there a single iota of 'sarcasm' in that question. I had actually thought it was quite simple at face value; do you support two standards of taxation? One for corporations and one for individuals.

Nik:

It is obvious that you do not have your facts straight. OBA did NOT bargain in good faith. They walked away from the table. Deckert has done a terrible job. You are right, there will be a very nasty campaign. If you think that the out of work public will vote for corporate executives and their huge bonuses - then you are more out of touch than the former Senator. Good luck.

Posted by: mp97303 | Jun 28, 2009 6:48:55 PM

The question is, do you believe corporations are people?

Or are they business entities created under the laws of the US and Oregon?

Oregon's Corporation Division has this on their website.

What Is a C Corporation? The IRS, not the state, classifies corporations according to how they want to be taxed. There are two types of corporations according to the IRS, either "C" corporations, named after Subchapter C of the tax code, or "S" corporations, named after Subchapter S of the tax code. C corporations have their own tax identification number and pay their own taxes.Just the opposite, S corporations, sometimes called small business corporations, are taxed as if they were not a corporation. Taxed like a partnership, an S corporation "passes through" its income or losses to the shareholder's personal tax return, and is not liable for Federal income taxes itself. The shareholders of an S corporation will pay personal income taxes based on the income of the S corporation, whether or not the shareholder received any of the income. Conversely, the S corporation shareholders will be able to personally enjoy any losses the corporation may have. You need to discuss this with your CPA. <<

Now, if you want to overturn that because the child care worker at a church or some other nonprofit (like the YMCA), the part time fast food or retail worker, purely Oregon corporations (such as wineries, Harry and David, or the local Marion County grocery store chain Roth's) and the folks at Nike, the Trail Blazers, Intel, etc. should all pay the same tax rate, that is something else again. That would require a major law change. If you truly live in the 97303 zip code, perhaps you live in House District 25. All revenue questions start in the House, so you should consider running against Kim Thatcher--you'd have some very interesting debates. Of course, proposing such an idea in a campaign, rather than just on a blog, might get some very interesting reactions from reporters and ordinary voters.

I was just listening to AG Kroger's Portland City Club speech online. At one point he talked about Enron, and the prosecution of Enron. "Every US corporation must incorporate in one of the 50 states. Which state did Enron choose? They chose Oregon. All the legal documents said "Enron, an Oregon corporation". Perhaps that was because they thought they wouldn't be taxed very heavily in Oregon, and they weren't."

In the entire existence of Enron, did that corporation pay taxes at a higher rate than individuals? I doubt it!

Nik: You are factually wrong on at least two points:

1) There were extensive public hearings in the House Revenue Committee on both corporate and personal tax increases. OBA leaders even testified on more than one occasion.

2) OBA was the one who walked away from the negotiating table, not the Democratic leadership.

my impression from the debate, which may not be accurate, is that it pushed its proposal as the sole solution and wasn't willing to compromise. It basically claimed that if the legislature didn't go along with the OBA package then it couldn't be blamed if business supported a ballot measure.

It's very helpful

To Cafe Today & Insider,

Your characterization of OBA "walking away from the table" is misleading and completely inaccurate. I guess you can get away with that when you are posting anonymously.

FACT: OBA on several occasions modified and increased the corporate tax package that we were proposing in response to the revenue goals of legislative leadership including an additional increase on the corporate minimum the day before the bill passed out of Ways & Means.

So lets be clear on this... OBA was still working to negotiate a package when the bill was passed out of committee. A package that would have helped close the budget gap, protected schools and avoided an ugly referendum fight.

It is clear that you disagree with OBA's moderate position on this issue but lets stick to the facts and leave the talking points at the office.

I sincerely hope OBA doesn't join AOI and Mark Nelson in running what will likely be shameful, distorted campaign to repeal these revenue increases. At the end of the day, the state needs the revenue to fund services. It is that simple. OBA may want to make a political point by fighting these tax increases, but they won't get the credit for winning. And, in the end, they will be undermining the very programs and services they purport to care about.

Damn LT

I didn't think the question was that hard. Let me make it simple for you: Taxpayer A has $0 taxable income. Taxpayer B has $0 taxable income. Which one should be forced to pay a minimum tax?

To anon,

A shameful, distorted campaign is already underway.

An increase in spending from $14.4 to $15.2 is being presented as a cut.

Yes the state needs tax revenues to fund services. Instead of claiming a cut, why doesn't the state say they need more $$$ in simple terms.

What agencies are increasing their spending? What agencies are actually cutting their spending? What agencies are holding their spending to past spending levels?

Openness always improves the dialog.

Here, here Anon.

Oops. That should be "hear, hear"

"What agencies are increasing their spending? What agencies are actually cutting their spending? What agencies are holding their spending to past spending levels?"

Legislative Audio is archived on the legislative website. If you wish answers to your questions, you might want to listen to some Ways and Means subcommittees.

BTW, forget about doing "more with less". The caseloads for food stamps, unemployment services, and other such government operations increase in a recession.

There was considerable discussion in Ways and Means subcommittees about whether a particular budget met the essential budget level (EBL), was, perhaps, 90% or the EBL, or whatever. There was also considerable talk of caseload levels.

This was a very open session in that anyone who truly cared about such issues could watch W & M subcommitee and full committee online or on Oregon Channel on cable. That is where the real work was done.

LT,

That is pretty disingenuous. Listening to audio from sessions conducted months ago will not answer the question of decisions made in the last week. A simple spreadsheet conveys mountains more information.

I was wrong. The budgeted increase is even more:

When all state taxes, federal funds and other fees are counted, Oregon's "all funds" budget for 2009-11 will rise to nearly $53.8 billion, an increase of more than 9 percent over the current budget.

What are we going to do when tax revenues are less than forecast in the coming years?

@Kari

So nice of you to 'conveniently' miss the point. Taxpayer A has $0 taxable income. Taxpayer B has $0 taxable income. Which one should be forced to pay a minimum tax?

BTW, this is a single letter answer type of question.

Jeff,

I'm confused. The OBA Website details the association's tax proposal. It lists the corporate minimum as ranging from $250 to $25,000, not to $60,000 as you say above.

It's misleading for the Legislature and OBA to define this solely as an "increase in the minimum income tax." The increase in minimum income tax actually would be from $10 to $250 (or, $300, as approved). The rest is a new "gross receipts tax" ranging up to $100,000 -- that's far different from what we all understand as "income tax."

<h2>thanks..</h2>