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Entries in oregon (6)


State Taxes, Volatility and the Kicker

Oregon's tax revenue system is slightly more volatile than the all-state average, but less than some critics think based on a new study by Pew Research. One volatile element not included in the Pew assessment is the personal income tax kicker, a unique and quirky procedure that rebates to taxpayers money that exceeds projected revenues by two percent or more.

According to Pew, Oregon's state tax regime volatility rating is 6.4 percent, compared to an all-state average of 5 percent. The most volatile state tax regimes are ones heavily dependent on severance or extraction taxes. Alaska has the most volatile state tax system at 34 percent.

Oregon depends heavily on personal and corporate income tax revenues, which rise and fall in concert with broader economic trends. When times are good, Oregon's income tax system generates a growing pot of money.

If times are too good, Oregon's personal income tax kicker is triggered, requiring a chunk of incremental revenue to go back to taxpayers.

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The Passing of an Oregon Hero

The passing of former Oregon Governor Victor Atiyeh earlier this week has prompted an outpouring of positive comments about the last Republican governor in Oregon, both for his accomplishments as well as for the positive way he conducted himself while he held the state's top political job.

Memories abound for me because I had the privilege of serving in the Atiyeh Administration and did a stint as the Governor's press secretary. 

Senator Peter Courtney captured the man well in his tribute:  "Governor Vic Atiyeh was a kind and gentle man. He had a great smile and a great way of dealing with people. He was the ultimate public servant in the truest sense of the word. There was no greater role model.  He led our state during the most difficult of times. He found a way to make things work when everything was going against us. He brought out the best in people by appealing to the best in each and every person. He never focused on the negative. Oregon is saying goodbye to one of its greatest statesmen and one of its most remarkable citizens."

Here is a quick collection of my own memories:

Coming back to Oregon:  After working in Washington, D.C., for Democratic Congressman Les AuCoin, I returned to Oregon and joined the Republican Atiyeh administration.  Like AuCoin before him, Victor — as we sometimes called the Governor — never asked me or any other staff member about political affiliation.  The only question was whether I could do the job. (AuCoin didn't ask about my political affiliation, either, in what was in the 1980s a far different political moment.)

The governor's favorite sayings:  His staff heard certain phrases repeatedly, so much so that they stick in my mind today, 30 years later. He liked to say, "Well, that's just part of the great pageant of life."  Or:  "There never are any problems — just opportunities." Or, as The Oregonian paraphrased this week, "You can do a lot if you don't care who gets the credit." 

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The Legend of Mae Yih

Stories of the dimunitiuve, irrepressible former Senator Mae Yih abound with any long-of-tooth Oregon lobbyist.

Mae YihThe most oft-told story involves a Ways and Means hearing at which Yih was listening intently to a state bureaucrat defend a spending request. In his opening comments, the bureaucrat said the amount requested was $500,000, but later he referred to the amount as a half million dollars, prompting Yih to interrupt and demand to know, “Which is it, $500,000 or half a million?”

Maybe the funniest and most telling Mae Yih story dealt with her first attempt in 1977 at stumping for office in her semi-rural Mid-Willamette Valley district. Yih, wife of the CEO of Wah Chang, then a major employer in the area, reportedly went “door-to-door” with a driver in her Rolls Royce.

Friendly supporters tipped off Democratic campaign officials who faced the delicate task of explaining to Yih that it might raise voter eyebrows to see her driving around in a car fit for nobility. Yih, after all, was running as a Democrat.

Yih said she was embarrassed by such a beginner’s mistake. From then on, she drove around the district on her own in a sleek Mercedes sports car. Nobody seemed to care.

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State, Local Revenues on the Rise

Legislators have a little more cash in the bank as the short 2014 session nears its mid-point, but maybe not enough to avert some spending cuts. Local school revenue derived from property taxes showed a healthy jump.

Oregon State Economist Mark McMullen delivered today the March economic forecast, which predicts another $14.8 million revenue. The forecast show revenues largely flat for this biennium and into future years, but is more optimistic on job growth than previous forecasts. In the near term, however, stronger job growth projections are offset by disappointing revenue collections.

The Office of Economic Analysis is optimistic about the future. Profitable businesses have been sitting on cash, waiting and building confidence to invest and expand. The state is beginning to see industries get close to production capacity. When combined with lower energy costs, brought on by expanded US oil and gas production, businesses are poised to begin expansion efforts. Labor force expansion follows business expansion creating opportunities for workers who are sitting on sidelines of the economy.

No personal income or corporate kicker is currently predicted for 2015, but the state is edging ever closer to hitting the target. McMullen reported the state is just $100 million away from a personal income kicker. April’s tax returns should give a better indication of the size of capital gains, providing a clearer picture as to whether the kicker will actually kick.

The outlook remains stable and there is evidence that economic recovery is spreading across regions in Oregon. The net changes over time suggest the growth trend will continue at a steady pace around 10 precent.

As lawmakers begin to push to close the short session, they will have a few more resources to dole out to agencies and pay for the costs associated with the passage of new policy bills. The amount is just enough to give budget writers some breathing room without giving other lawmakers a false sense of plenty — thus creating a rush of funding requests that cannot be met.

Even with new resources, the state will struggle to maintain a substantial ending fund balance as the costs associated with budget rebalances, devastating fire seasons and unexpected emergencies create risk for the remainder of the biennium. Lawmakers also face potentially large budget gaps in corrections and human services that will be major challenges in 2015.

A separate forecast showed a $98 million increase in revenue available to Oregon K-12 school districts. While most of the increase is the result of larger property tax collections statewide, the amount also reflects a temporary extension of federal timber payments and proceeds from state lands.

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Democrats Run the Table in Oregon…Again

While observers thought things would be closer, Democrats surged to a working majority in the House, but retained a nearly tied Senate. With a Democratic Governor in the middle of his third term, the results from last night will put to the test the skills Democrats and Republicans gained while working with a 30-30 House now that one party has the opportunity to control the organization of both chambers.

  • In the legislature, Democrats decisvely take charge of the House by 34 votes, not a supermajority, but clearly a working majority. Rep. Tina Kotek, D-Portland, the current majority leader, will be named Speaker within the next few days.

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Bemoaning the Loss of Civility in Politics

About 10 years ago, General Colin Powell said he would not run for President because he "bemoaned the loss of civility in politics."

Well, I'm no Colin Powell, but I share his point and the quote has stuck with me for years.

I long for the day when, despite our partisan and philosophical differences, we can return a measure of civility to the development of public policy.

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