Oregon solons OK $733 mil. in taxes
From our weekly issue dated June 17, 2009
Several key bills recently passed through the Legislature at the state capitol in Salem, as lawmakers race toward adjournment of the 2009 session.
On Tuesday, June 9, House Bill 2649 and HB 3405 passed the House. Both passed through the Senate on Thursday, June 11, and represent a combined $733 million in new taxes.
HB 2649 raises the personal income tax on individuals earning more than $125,000 per year from 9 to 10.8 percent. The tax hike also applies to households earning $250,000 or more. Also, individuals earning more than $250,000 would be taxed at 11 percent, along with households reporting $500,000 or more per year.
District 4 Rep. Dennis Richardson (R-Central Point) was among those who opposed both tax bills, which passed largely along party lines. Richardson, who serves on the budget-writing Ways & Means Committee, said that the 10.8 percent rate makes Oregon the highest personal income tax state in the country.
HB 3405 changes the way that corporations are taxed in the state.
Richardson said that currently, corporations are taxed at 6.6 percent with a $10 minimal filing fee. Under HB 3405, that fee will be raised to $150, and a tax will be implemented on sales of $500,000 and increase to as much as $100,000 on sales of $100 million, Richardson said.
Joining Richardson in opposing both tax bills was Third District Rep. Ron Maurer (R-Grants Pass).
“In a time when businesses are fleeing the state and closing, the state is throwing another nail in the coffin,” Maurer said.
Richardson and Maurer maintain that the tax on businesses ultimately will be passed to consumers in the form of higher prices for goods.
“That’s just kind of the way business works,” Maurer said. “You can’t pretend it’s just a tax on business.”
It’s anticipated that Gov. Kulongoski will sign both pieces of legislation, and he heralded their passage in a Thursday, June 11 press release.
“A lot of work from both chambers of the Legislature went into passing these two revenue measures,” the release states. “This vote was not easy, but it was necessary to protect our middle class and prevent devastating cuts to programs like education, health care and public safety.”
Advertisement:
Lawmakers also passed two bills pertaining to health care. On Monday, June 8, HB 2116 and HB 2009 passed the House. They passed the Senate on Thursday, June 11.
Under HB 2116, a 1 percent premium will be assessed to health-care providers, including hospitals and insurance companies. The funds raised through HB 2116 will go toward drawing more federal dollars in order to expand the number of citizens covered under the Oregon Health Plan.
“This tax is a flat-out, unadulterated tax on those people who already pay an awful lot of money for health care,” Maurer said.
HB 2009 would establish the Oregon Health Authority (OHA), a new agency charged with overseeing health-care delivery in the state.
“The OHA will assume the responsibility for alcohol addiction, mental health, public health and all medical assistance programs,” Richardson said. “There are a number of agencies assumed by it, and also several created that are new.”
Richardson said that OHA ultimately would contain 15 state agencies and 22 programs. Many of those programs currently are handled by the Dept. of Human Services (DHS), but Richardson said that HB 2009 would leave that agency with senior citizens, people with disabilities and children, and adults and families.
HB 2009 “has the potential” to enable better legislative oversight of DHS, Richardson said, but he added that “the outcomes of these actions by Democrats is quite uncertain.”
Richardson noted that, “The challenge is, of course, when you conglomerate a number of agencies or divide one agency into a fragment or single agency, it takes three to five years for the dust to settle, the regulations to be written and to get a sense of what you have.”
Kulongoski also is likely to sign HB 2009 and HB 2116. In a June 11 press release, he stated that the bills “represent the largest expansion of health-care coverage and the most significant steps forward to controlling health costs since the enactment of the Oregon Health Plan two decades ago.”
The passage of HB 2009 and HB 2116 “puts the state on a path to ensure that every child in Oregon and thousands more adults will have access to health care and gives us the tools to make health care more affordable for all Oregonians,” the release states.
Legislators could adjourn the 2009 session by the end of June. However, Richardson cautions that if the state’s revenue picture doesn’t improve, a special session may become necessary some time in the fall.
Advertisement:
