Find alternative to divisive path
Yes, the 2009 Legislature has left Salem. But the requirement for legislative compromise should not completely evaporate.
As reported on the Portland Tribune Web site July 21, some business and legislative leaders are involved in very preliminary discussions about ways to temper, if not avoid, what is expected to be a nasty and costly election battle. At issue is the Legislature's decision to dramatically - and, for the most part, permanently - raise taxes on businesses and high-income earning Oregonians.
The Legislature used these tax increases to balance the state budget during the deepest recession in decades. But rather than make these tax hikes temporary to deal with a short-term problem, a supermajority of Democrat legislators supported permanent tax increases. In doing so, they set up an election showdown between business groups that want to overturn the tax increases and the public employee unions that will fight to retain them.
Budget could fall apart
If opponents of these tax increases are successful in gathering enough signatures to refer them to the ballot this winter, the election will test the strength of two opposing impulses in the minds of Oregon voters. On the one hand, they have been hostile to just about every statewide tax increase placed on the ballot in recent years. But they also resent what they perceive as unfairness in a state tax system that arguably places a greater burden on individuals than it does on business.
From our perspective, this is a time that Oregon should be encouraging business stability, growth and job creation. It is definitely the wrong time to pass permanent tax increases that hinder economic growth and that will drive high-income Oregonians to other states, such as nearby Washington.
But even those who strongly believe businesses should pay more taxes ought to be troubled by the shaky ground on which Oregon's 2009-2011 budget was built. If voters reject the tax increases, the budget will come severely unraveled in the middle of this fiscal year. That means hundreds of millions of dollars will be cut, much of it from K-12 education.
Even now, due to uncertainty over the potential repeal, school districts in the Portland area are unable to make firm plans about whether to call back to work hundreds of teachers and other employees whose jobs have been eliminated.
Schools and others would lose
This state of limbo places schools and other state-supported institutions in financial peril - and that's why we support compromise. What's being discussed now is the possibility that the Oregon Business Association would oppose a referral campaign in return for a firm promise from legislators that they would reverse themselves during a special session and make at least a portion of the tax increases temporary.
We recognized that such a strategy has its risks.
But the alternative to compromise is to continue down a divisive path that very well could lead to even more highly destructive budget cuts than the ones already approved by the Legislature and, in turn, enacted by local school districts and public agencies throughout Oregon.
We urge immediate compromise that will ensure that these tax increases are implemented only in the short term, thereby enabling the state, as well as its businesses and citizens, to recover financially through the restoration of a healthy Oregon economy.