Think Tank Concludes ‘Grand Bargain’ Flawed

The tax package called the “Grand Bargain” that squeaked through the Oregon Legislature last week was blasted by the Oregon Center for Public Policy (OCPP), the state’s leading progressive think tank, as fiscally irresponsible.

The package suffers from “three major flaws,” reads a statement from Chuck Sheketoff, executive director of OCPP. “Revenue shrinks after the current budget period, it’s mainly a tax cut for some of Oregon’s wealthiest 1 percent, and it won’t create any jobs, despite what its proponents claim.”

Sheketoff is concerned that the legislation fails to place an expiration date or sunset on the tax subsidy for wealthy business owners. “It’s not only contrary to public policy enacted by the 2013 Legislature,” he says, “but it’s irresponsible for lawmakers to not sunset this tax provision.”

Sheketoff told EW that this concession to the Republicans was likely a response to voters passing Ballot Measures 66 and 67 in 2010, which raised taxes on Oregonians earning more than $125,000 a year.

Some taxes will go up under the legislation, but Sheketoff says K-12 schools that will benefit from the $100 million in new revenue over the next two years may be in for a surprise when the money dries up at the end of the biennium.

“The proposal, ultimately, hangs on the erroneous premise that reducing taxes for wealthy business owners creates jobs,” he says. “Customer demand, not tax rates, drives the need for new employees.”

The tax package also put limits on state contributions to the Public Employees Retirement System (PERS), but unions are expected to challenge the cuts in court.

Find more on Sheketoff’s analysis of the legislation at ocpp.org.

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