'Oregon's lopsided dependence on an income tax to fund state services is causing concern on Wall Street, where bond-rating companies have downgraded this state's ranking. The financial experts specifically point to the volatility of the income tax, the absence of a rainy day fund and Oregon's kicker law, which returns unexpected state revenues to taxpayers during economic good times.
'Oregonians saw the agonizing results over the past two years as the state cut off medications to people on the Oregon Health Plan, reduced education funding and undermined a justice system that is supposed to protect us all.
'These distressful choices are hardly behind us. If the Legislature's temporary income tax surcharge is referred to the ballot and rejected in February, the ensuing cutbacks will be frightful.
'State Treasurer Randall Edwards believes Oregonians must recognize the shift that has occurred in the past 10 years as the state, not local communities, took the lead responsibility for funding public schools. And he argues that the state needs tax reform to decrease its dependence on the income tax.
'Even after the experience of the past two years, we don't have confidence that Oregonians will support tax reform, especially if that means a sales tax. But another suggestion from Edwards Ñ that the state revisit its kicker law and begin saving money for the next economic downturn Ñ might be politically palatable.
'The kicker, which returns money to taxpayers if state revenues exceed projections by more than 2 percent, has been popular. But Oregonians might consider forgoing a portion of their refunds if they knew the money would be locked away in a rainy day fund that only could be touched during an economic downturn.'
Ñ From a Nov. 8 editorial in the Gresham Outlook