At a time when we're slashing medical coverage to senior citizens, kicking music teachers out of our public schools and letting burglars roam free, does it make sense to give tax breaks to yacht owners?
That's the question labor leaders want lawmakers to answer this session, as they launch an attack on some of Oregon's 350 tax breaks.
For years, social-service advocates and public-employee lobbyists chafed as government programs were scrutinized during brutal budget-committee hearings while down the hall, tax breaks, officially known as "tax expenditures," were granted with virtually no debate in the revenue committees.
"They were giving away candy like Santa Claus," says Laurie Wimmer Whelan of the Oregon Education Association. Wimmer, along with Tim Nesbitt of the Oregon AFL-CIO, is leading the Oregon Revenue Coalition, a labor-heavy alliance which this week released an initial analysis of its tax-break study.
It showed that the 350 exemptions, primarily to income and property taxes, will add up to $27 billion during the next biennium, and they're growing at a faster rate than the taxes that are collected.
The report concedes that many tax breaks make sense and some (such as the exemption to federal and tribal land) are off-limits to state lawmakers.
But the group has identified 174 loopholes which it thinks deserve a hard look this session. They include the property-tax exemption granted to pleasure boats ($31.9 million) and the income-tax credit for contributions to the Trust for Cultural Development ($17.9 million), but focus most heavily on corporate income-tax breaks, such as those given Oregon companies who have foreign operations (nearly $71 million).
Nesbitt estimates Oregon collects only 45 cents of every dollar of corporate income-tax that it would get without the tax breaks. Given a $2.5 billion shortfall in the upcoming budget he expects lawmakers may finally be willing to "put the income back into income tax."