Making the Rich Pay their Fair Share on the Ballot in Oregon

Making the Rich Pay their Fair Share on the Ballot in Oregon

Thursday, January 14, 2010




Making the Rich Pay their Fair Share on the Ballot in Oregon

In 2009, Oregon lawmakers approved HB 2649 and HB 3405, a balanced approach to dealing with their fiscal problems that included increased taxes on the wealthiest state residents and corporations.  These revenue increases were combined with lowered taxes for people receiving unemployment insurance benefits, offering tax relief to many families.  

But right wing anti-tax forces were able to get the issues on the ballot for a vote on January 26--as measures 66 and 67.  With other states around the country likely to be considering tax proposals this session, implementation of these revenue increases in Oregon would bolster progressive tax efforts around the country.

Oregon still faces a $4.2 billion biennium budget deficit for FY 2010 and 2011.  Lawmakers were forced to cut over $1.7 billion in funding for vital programs in almost every area in FY 2009 and 2010, including K-12 education, Medicaid, and public assistance.  As progressive tax reform would generate over $700 million for the state, failure to ratify these revenue increases would only exacerbate the budget crisis in the upcoming year.  As Chuck Sheketoff, Executive Director of the Oregon Center for Public Policy (OCPP), explains, "[a] 'no' vote is trouble.  Should opponents prevail, the corporate minimum tax would remain at $10.  Taxes would go up for the unemployed.  The flow of federal dollars into Oregon’s economy would shrink.  And in all likelihood, the legislature would be forced to cut further education, public safety and health and human services."

Progressive Tax Reform Best Response to Fiscal Crisis:  As we detailed last year, progressive tax increases are a far better alternative to massive budget cuts.  The latter can cause extensive damage to the economy by reducing consumer spending, exacerbating job losses, and hurting working families who rely on public services.  Additionally, progressive tax reform does not have the detrimental economic impact that opponents often cite.  In fact, several states that raised taxes on the wealthy experienced higher economic growth than other states and did not see an out-migration of wealthy residents.  Just in 2009, Connecticut, Colorado, Delaware, Hawaii, New Jersey, New York, North Carolina, Rhode Island, and Wisconsin instituted either a permanent or temporary reform of personal income taxes.  Over 10 states considered or enacted business tax increases to help deal with budget deficits last year as well.

Oregon Measures a Modest Step Towards Making the Wealthy Pay Their Fair Share:  Measure 66 will increase the marginal income tax rate on individuals earning above $125,000 and joint filers making above $250,000 to 10.8 percent.  For single filers making $250,000 and couples earning over $500,000, their marginal tax rate would increase to 11 percent.  This would only impact 2.5 percent of Oregonians.  The top rate would permanently fall to 9.9 percent for income over $250,000 for joint filers and $125,000 for single filers in 2012.  Additionally, the measure exempts the first $2,400 of unemployment insurance benefits from taxation in 2009, providing tax relief to over 270,000 Oregonians.  Considering all state and local taxes, the richest Oregonians will still be paying a smaller percentage of their income in taxes than working and middle class families.  Accordingly, the measure is only a modest step towards a more equitable tax system.

Partly in an effort to restrict tax avoidance, the main provision of Measure 67 is the implementation of new minimum taxes on corporations.  In particular, the measure would raise the $10 corporate minimum tax for the first time since 1931 to $150.  Overall, 97.5 percent of all business in the state would either pay the new minimum tax or see no tax increases.  In 2013, the changes would only impact businesses making over $10 million.  Even if measure 67 is approved, the state would still have the lowest corporate taxes on the west coast and the fifth lowest in the nation. 

Despite affecting only the richest individuals and corporations in the state, Measures 66 and 67 will generate over $700 million in the upcoming fiscal year.  These slight changes to the tax structure will go a long way to protect vital social services that Oregonians deserve.

Public Support for Progressive Tax Reform: The public overwhelmingly supports these progressive tax increases.  A poll released on December 30, 2009 found that 55 percent of Oregonians support the two measures, 38 percent oppose, and 7 percent are undecided.  Scott Moore, spokesman for Vote YES for Oregon, remarked, "[t]he key message coming through is, these measures are better than the deep cuts to services everyone cares about.  And they're better than broad-based tax increases that affect the middle class."

Major organizations support the effort, including: AARP Oregon, American Federation of Teachers, Children First for Oregon, Oregon AFL-CIO, Oregon AFSCME, Oregon Alliance for Retired Americans, Oregon Council of Police Associations, League of Women Voters of Oregon, Oregon Nurses Association, Oregon State Fire Fighters Council, SEIU Oregon State Council, and several others.

Measures 66 and 67 are likely to be a bellwether for efforts by advocates around the country to enact balanced revenue increases that safeguard funding for essential public programs and protect working and middle-class families who have borne a disproportionate share of the pain caused by the economic downturn.

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Returning Cap-and-Trade Revenue to Consumers Recommended in California

As California prepares to implement its own cap-and-trade climate change law, state officials are looking to ease the economic burden on consumers by using revenues generated to deliver a tax rebate to families, an approach called "cap-and-dividend."  An advisory committee to the California Air Resources Board has recommended that 75% of up to $20 billion in expected annual revenue from the new measures be returned to consumers.  The return would occur in the form of annual dividend checks that could exceed $1,000 for a family of four.  The remaining 25% of the total revenues may be allocated to projects such as renewable-energy plants that would reduce greenhouse gas emissions.

The committee's report recommends the auctioning of greenhouse gas emissions permits.  The sales are expected to reap $2 billion to $22 billion in revenue a year from 2012 through 2020.  Specifically, the law would require utilities, refineries and other industrial polluters to buy permits under the recommendations, generating the revenue that would be returned to consumers to offset expected higher energy prices.   Consumers who reduced their own personal energy use would experience the highest personal savings, creating incentives for energy efficiency and lower greenhouse pollution by both producers and consumers of power in the state.

The national implications of the California recommendations are clear.  Unlike the federal cap-and-trade bill approved by the U.S. House of Representatives, the California Committee notably rejected the utilities’ request to give them free allowances.  In contrast, the U.S. Senate bill proposes a "cap-and-dividend approach" similar to California's committee proposal.  As a Center for Budget and Policy Priorities report noted last year, "policymakers can design a climate rebate to offset the impact of higher energy-related prices on low-income and middle-income households efficiently."

The California recommendations highlight a way to address the economic equity concerns over cap and trade revenues.  There is a broad consensus that returning funds to consumers, especially low income earners, can alleviate the burden of higher energy prices.  Nine states are already operating similar cap-and-trade auctioned permits, which have generated $500 million in the first 15 months.  Returning cap-and-trade revenues to consumers -- not the original polluting industry sources -- is the far better approach to address climate change and assure that average households are not burdened.

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9th Circuit Strikes Down Washington's Felon Voting Law

Last week the 9th Circuit Court of Appeals ruled in favor of disenfranchised felons in Washingtonholding in a summary judgment order that the state's practice of denying the vote to felons violates the federal Voting Rights Act (VRA).  Notably, instead of basing their argument on the nature of the felon disenfranchisement law at issue, the case centered on the interaction between felon disenfranchisement and the discrimination in the criminal justice system itself.  Plaintiffs argued that systemic racial discrimination in who is arrested, charged, convicted and punished for felonies in Washington combined with the otherwise racially-neutral desenfranchisement policy to result in racial discrimination in voting. 

Evidence of this discrimination is compelling.  As the Seattle Post Intelligencer has reported:

[R]ecent Department of Corrections figures show that about 28 percent of the state's prison population is African-American, according to statistics cited in the suit.  In contrast, African-Americans account for about 3 percent of Washington's population.  A review of arrest records, the plaintiffs argued, showed that increased criminal behavior could not account for the disproportionately high incarceration rates among black Washingtonians.  

Confronted with the evidence, two of three judges on the panel  found "a durable, sustained indifference in treatment faced by minorities in Washington's criminal justice system — systemic disparities which cannot be explained by 'factors independent of race.'"

A Landmark Ruling for the Nation:  This case is a landmark ruling as the first in the nation to find that the relationship between discriminatory criminal justice systems and felon disenfranchisement does indeed violate the VRA.  Three other circuit courts have previously ruled on this issue.  However, none of those courts entertained evidence of racial discrimination, finding that felon disenfranchisement laws didn't apply to the VRA.  Now that the 9th Circuit, after actually examining evidence, has come to a different conclusion, the case is likely to be reviewed by the US Supreme Court, a request the Attorney General has indicated that he will make.

Reaction to the ruling has, not surprisingly, been largely uninformed, with many commentators seeming to believe that only intentional discrimination violates the VRA.  In reality, it is the effect of the law and not its intent that matters under the statute.  And, of course, many seem to be blissfully ignorant of the benighted history of felon disenfranchisement laws, which were explicitly designed to reduce minority voting power at the time of their introduction in the 1800s.  Perhaps the most telling response has come from the Attorney General of Washington who stated that "The felon disenfranchisement laws of Washington and 47 other states hang in the balance."  Of course, this is only true because as the AG tacitly acknowledges, the criminal justice systems in all of our states show signs of pervasive racial bias.

This ruling may also have some immediate reverberations in Virginia and Wisconsin where felon disenfranchisement is on the public agenda.  In Virginia, it may give a lift to efforts by advocates to have outgoing Gov. Tim Kaine order the restoration of all formerly-incarcerated felons currently disenfranchised.  In Wisconsin, a law to automatically restore voting rights upon release from prison is also under consideration and the sponsor, Rep. Joe Parisi, has lauded the ruling as a vindication of his views.

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Research Roundup

Reports on the need for new government investments for economic recovery:

  • Private sources of spending cannot support job growth - This economic snapshot by the Economic Policy Institute shows that public investments in the last year were critical in stemming economic collapse this past year and why additional public spending is so critical.
  • State Budget Cuts: America's Kids Pay the Price - This report highlights how millions of children are feeling the effects of the economic downturn as states cut basic services and programs.  It highlights why new federal funding for key programs are critical for both job creation and serving the needs of the next generation.

Diversity in State Judicial Campaigns, 2007-2008 - Money and incumbency are overwhelming determinants in who wins state judicial elections and this reality impacts racial, ethnic and gender diversity in the nation's courts, according to this report by the National Institute on Money in State Politics.  The report also found that candidates in partisan judicial elections, where they are listed on the ballot with a party affiliation, averaged up to three times more money than those in nonpartisan or retention races.

Right-Sizing Prisons: Business Leaders Make the Case for Corrections Reform -  This Pew Center report features how around the country, business leaders are advocating for public safety policies that control corrections costs, keep communities safe and ensure states have the workforce they need for a thriving economy.   They have highlighted how the costs of prisons are undermining spending on education and other services vital to long-term business success in states.

The Alliance for Health Reform held a briefing on Friday, January 8th analyzing the policy and implementation issues of health insurance exchanges.  Both House and Senate reform bills include an exchange, but the proposals differ in several important aspects. One major difference is that the House proposal would set up a national exchange, with states having the right to opt out; the Senate version envisions state exchanges.  The Alliance briefing examines the strengths and weaknesses of both and includes the speakers' presentations and a number of analytic and related resource materials.  Among the resource materials are Health Insurance Exchanges in Healthcare.

Reform: Legal and Policy Issues (The Commonwealth Fund) and Implementation and Enforcement of Health Care Reform - Federal versus State Government (The New England Journal of Medicine). The briefing and speakers' presentations can be viewed via webcast or podcast.

2010 Election Administration Policy Recommendations - Project Vote has released a series of summaries of election administration in 11 states with recommendations on policies that would improve election practices in each.  The states covered are Arizona, Colorado, Florida, Michigan, Missouri, Nevada, New Mexico, North Carolina, Ohio, Pennsylvania, Virginia.

Please email us leads on good research at


Making the Rich Pay their Fair Share on the Ballot in Oregon

Center on Budget and Policy Priorities - Recession Continues to Batter State Budgets; State Responses Could Slow Recovery
Center on Budget and Policy Priorities - Spending Cuts Vs. Tax Increases at the State Level: Is One More Counter-Productive than the Other During a Recession?
Center on Budget and Policy Priorities - Tax Measures Help Balance State Budgets
Fiscal Policy Institute and Center for Working Families - Back on Track
Institute for Taxation and Economic Policy - Who Pays?
Oregon Center for Public Policy - A Step Towards Balance
Oregon Department of Revenue - Measures 66 and 67
The Pew Center on the States - Beyond California: States in Fiscal Peril
Progressive States Network - Taxing High-Income Residents: Better than Budget Cuts, Better for Economic Growth
Vote YES for Oregon - Measure 66 & 67: A Break for the Unemployed

Returning Cap-and-Trade Revenue to Consumers Recommended in Californian

California EPA - Panel Recommends Auctioning, “Household Friendly” Approach to Carbon Regulation
California Air Resources Board's  Economic and Allocation Advisory Committee - Allocating Emissions Allowances Under California's Cap-and-Trade Program
Environment California - Global Warming Solutions and A Global Warming Rx: Make Polluters Pay for Global Warming Pollution and Invest in Clean Technologies
Los Angeles Times - California cap-and-trade: A political gamble?
New York Times - California Panel Considers Money from Climate Rules
Progressive States Network - Climate Justice: Promoting Equity in Dealing with Climate Change
Center on Budget Policy and Priorities - How to Use Existing Tax and Benefit Systems to Offset Consumers’ Higher Energy Costs Under an Emissions Cap
The American Enterprise Institute for Policy Research - Climate Change: Caps v. Taxes

9th Circuit Strikes Down Washington's Felon Voting Law

Farrakhan v. Gregoire (9th Circuit Ruling)
Seattle Post Intelligencer - Washington Prisoners Entitled to Vote, Federal Court Rules
Brennan Center for Justice - Farrakhan v. Gregoire Case Materials
Project Vote - Court Finds Washington Voting Law Racially Discriminatory


The Stateside Dispatch is written and edited by:

Nathan Newman, Executive Director
Nora Ranney, Legislative Director
Marisol Thomer, Outreach Director
Fabiola Carrión, Broadband and Green Jobs Advocate
Enzo Pastore, Health Care Policy Advocate
Altaf Rahamatulla, Tax & Budget Policy Specialist
Christian Smith-Socaris, Election Reform Policy Specialist
Adam Thompson, Health Care Policy Specialist
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Mike Maiorini, Online Technology Manager

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