Wednesday, January 14, 2004
Oregon’s chief financial officer visited Hood River last Wednesday to talk about tax reform and other budgetary challenges.
Randall Edwards, the state treasurer since January 2001, addressed the Rotary Club and visited with both private business owners and public officials. He urged them to support the $800 million tax package approved by the legislature this summer. He said opposition groups have mounted a campaign that has sent the temporary income tax surcharge and corporate tax increases to the Feb. 3 ballot. However, Edwards said there is no backup plan for the drastic cuts that will follow a defeat at the polls. He does believe that hiking taxes is only a short-term budget fix and that a hard look needs to be given toward an overhaul of the tax system.
“We as a government have got to be constantly looking at how we’re spending money,” said Edwards in a follow-up interview.
He said since November at least 18 initiatives centered on tax reform have been filed with the Secretary of State’s office and some will most likely qualify for the ballot. The proposals include equalizing corporate and personal income tax rates, creating a statewide property tax on nonresidential property, imposing an income tax surcharge on high-income households, enacting a tax on the gross receipts of businesses, limiting income tax breaks, capping property tax increases and increasing income tax deductions.
“Tax reform doesn’t mean more taxes per se, it means more stability in the system,” Edwards said.
The treasurer is traveling around Oregon to hear the concerns of citizens. He is also informing them that the number one complaint issued by business leaders is that the state’s current tax code is an impediment to development. And that creates a bad cycle, according to Edwards, since without a healthy private business base, the state struggles to finance education and other services that are essential to attract new industries. Because of the economic uncertainty in Oregon, Edwards said the state’s bond rating has been lowered and that costs taxpayers millions of dollars in higher interest rates. For example, he said the legislature approved the borrowing of $450 million to “plug a hole” in the 2003-05 budget. The repayment period for that funding extends over 10 years and about $12 million will be tacked on for interest.
Although he contends that state officials “looked under every rock” before borrowing money, Edwards doesn’t want to see that become a regular practice. He does think it could once again become necessary if the referendum is approved.
“I think my fear is that there will be pressure to just borrow our way out of it because they (legislature) won’t be able to tolerate the cuts because of political pressure,” he said.
Edwards said there is no “Plan B” if the tax package fails. He said automatic state budget cuts of about $544 million will be triggered, reducing state school support by $285 million, university budgets by $7.5 million and community college aid by $6.8 million. In addition, the court system will take a $13 million hit, health services — including the state health plan — will be lowered by $154 million, services for senior and disabled persons by $12.8 million, and family services — including welfare — by $12 million. The law enforcement system would also face major reductions, with $13 million struck from court budgets, $10 million from the fund to hire lawyers for lower-income defendants, $24.6 million from prison and other corrections centers, $3.9 million from the state police lab and $5.8 million from juvenile programs.
“I don’t want to sound like ‘Chicken Little’ but the sky has been falling a lot and we have to keep this tax in place because the cuts behind it are so devastating,” Edwards said.
He said part of the problem is constitutional law in Oregon that requires the state to return tax dollars that exceed the projected bieunnium budget by more than 2 percent. He said since 1996 the state has issued $1 billion of “kicker” checks that could have been put into a rainy day fund and used to offset the existing budget shortfall.
“This is not just about taxation, it’s about spending and expenditures as well,” said Edwards.
Edwards is charged with directing the state treasury which invests $48 billion and processes more than $120 billion in transactions each year. His proudest achievement is the authorization and implementation of the Oregon College Savings Plan, now known as the Oregon 529 College Savings Network. That program allows families to save $2,000 per year tax-free for their child’s higher education. Since the program started in January of 2001, it has garnered assets of nearly $100 million — one of the fastest growing plans in the country.
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Parkdale third graders sing "12 Disaster Days of Christmas"
Welcome to your sing-able Christmas gift list. What follows is an emergency rendition of “12 Days of Christmas” – for outfitting your home or car in case of snow storm, earthquake, flood or other emergency. Read it as a simple list, or sing it to the tune of “12 Days” – you know, as in “ … and a partridge in a pear tree…” Not to make light of it, but the song is a familiar framework for a set of gift ideas that you could consider gathering together, even if the recipient already owns items such as a bunch of coats, tire chains and flashlights. Stores throughout the Gorge are stocked up on all these items. Buying all 12 days might be prohibitive, but here are three ideas for checking any of the dozen off your list (notations follow, 1-12.) The gift items needed to stay warm, dry and safe are also coded to suggest items in your abode (A) in your car (C) or both (B). 12 Gallons of Water (A) 11 Family meals (B) 10 Cans of propane (A) 9 Hygiene bags (B) 8 Packs of batteries (A) 7 Spare coats (B) 6 Bright red flares (C) 5 Cozy blankets (B) 4 Tire chains (C) 3 Flashlights (B) 2 cell phone chargers (B) 1 And a crush-proof first aid kit (B) Price ranges? Here’s a few quotes for days Three, Two, Four and Nine: n A family gift of flashlights (three will run $15-30, Hood River Supply, Tum-A-Lum) n Cell phone chargers (two will run $30-60) n Tire chains (basic set, $30, Les Schwab, returnable if unused for the winter) n Family meals ($100 or so should cover the basics for three or four reasonably well-fed days) n The home kit should be kept in a handy place near an exit, and remember that water needs to be replenished every few months. If you have a solid first aid kit already, switch out the gift idea with “and-a-sto-o-u-t- tub-for it-all …” Otherwise, it’s a case of assembling your home or car kits and making sure all members of the family know what the resources are and how to use them (ie flares and propane). Emergency situations are at worst life-threatening, at best deeply uncomfortable if you and your family are left without power for an extended period, or traveling and find yourself in a situation where you need to wait out a storm, lengthy traffic delay, or other crisis. Notes on the 12 gift ideas: 12 – Gallons of water: that’s one per person in a four-member family to last for three days, the recommended minimum to be prepared for utility outages. 11 – Easy-open packaged goods, energy bars, dried food and nuts are good things to include for nutrition. Think of what your family of four needs for three days to stay fortified and hydrated (see number 12). Can-opener also recommended 10 – If you have a propane camping stove, keep extra fuel handy. 9 – Hygiene bags: put packaged moistened towelettes, toilet paper, and plastic ties in large garbage bags (for personal sanitation) Resource list courtesy of Hood River County Emergency Management, Barbara Ayers, manager/ 541-386-1213. The county also reminds residents to Get a Kit, Make A Plan to connect your family if separated, and Stay Informed. See www.co.hood-river.or.us to opt-in for citizen alerts. Enlarge