MY VIEW • Dont saddle firms with bad tax fix

Oregon's vital services at a crossroads as groups try to influence vote on Measures 66 and 67
by: L.E. BASKOW, Gas stations, such as the Chevron on Southeast Powell Boulevard in Portland, are among many businesses working to defeat  Measures 66 and 67. Voters this month are being asked to ratify or reject the measures, a referendum on the 2009 Legislature’s income and business tax increases.

The nation's economic news late last week couldn't have been worse: Across the country jobs continue to be lost, pushing up unemployment.

In Oregon, we've been hit hard, with more than 130,000 jobs lost. If history is a predictor, we can expect that Oregon will be one of the last states to come out of this recession, and many families will feel the hardships for a long time.

You have to wonder why, with the national focus on job re-creation and retention, the Oregon Legislature passed record tax increases that are likely to cost more Oregonians their jobs and drive investors out of our state.

Proponents of Measures 66 and 67 want voters to believe this is a debate about school funding. They are painting a picture that, in opposing these measures, Oregon businesses want to duck paying taxes and don't care about schools. That just isn't true.

The Portland Business Alliance opposes Measures 66 and 67 because we believe that enacting the largest permanent tax increase in Oregon's history at the height of the worst recession since the Great Depression will hinder our ability to regain the jobs Oregonians so sorely need. We also believe the measures will make worse our over-dependence on income taxes, increasing the volatility in our revenue system, and ultimately hurting schools.

The sad truth is, there was another way.

During the 2009 session, the state's business groups told legislative leaders we were prepared to work with them on a package of temporary tax measures to help the state through this difficult time. What we believed - and continue to believe - is the state could find more ways to reduce costs as the rest of us have in this tough economic time. We wanted education funding held harmless and were ready to step up to help.

We also offered a means to end the cycle of revenue volatility that has plagued our state and schools for many years. We urged the Legislature to reform our antiquated kicker law, allowing the state to save money in good times to be better prepared in bad times. Corporate Oregon had already given up its $300 million 2007 corporate kicker for this purpose, and we were ready to support permanent kicker reform.

Sadly, the Legislature chose instead to adopt permanent tax increases that will give Oregon the highest personal income tax rates in the country, undoubtedly driving investors out of our state. And they chose to permanently increase taxes on an already struggling business community, including a new 'minimum' of up to $100,000 on businesses that have no profit.

That will undoubtedly cost jobs.

The Portland Business Alliance and our partner business organizations across Oregon support education. Time and again, we have stepped up to help with funding initiatives at the state and local level, and we are ready to again.

That's why we want voters to understand that there continues to be a better way. We believe Oregonians should say NO to Measures 66 and 67 and demand that Oregon's Legislature do the right thing when they go back in session in February. Legislators should take another look at the state budget and find opportunities to save money. They should make targeted use of the projected $400 million in existing reserves and ending budget balances to fund priority programs like schools.

And then, if new revenue are still needed, they should work with the business community to enact a package of temporary revenue measures to take care of this temporary problem. Finally, we all need to work together to end the volatility in our revenue system.

There is still another way. Vote NO and tell the Legislature to go back and do the right thing.

Sandra McDonough is president and CEO of the Portland Business Alliance. She lives in Hillsdale.