Temporary and not so temporary

The county of Multnomah, Oregon, which contains Portland and it’s eastern suburbs, is one of the rare localities in the United States that has it’s own income tax.   Ergo, we are some of the most heavily taxed citizens in the country.  That tax was set up during the crash the economy was having in the early part of this decade, but was promoted as, and promised to be, a three year temporary tax.  But as most anti-tax advocates will tell you, there’s no such thing as a temporary tax. 

So just to prove that point, the mayor of Portland has decided to promote another temporary income tax for city residents.  The purpose of this tax is going to be to fund schools, which is what the country tax, which expired at the end of last year, was supposed to cover.  Now that the country has come out of the recession, why do you suppose we still need that extra tax?

The plan already has the support of many parents, including John Whistler, co-owner of Kitchen Kaboodle and parent of a seventh-grader at West Sylvan Middle School.
   “I’m doing it out of purely selfish business reasons,” said Whistler, who was scheduled to speak at the Thursday rally. “Imagine the city of Portland with a broken school system, a system for people who have no other choices. Parents would put kids in private schools, and lots will move out of the city or region. I think that would mean a tremendous loss of disposable income that goes into the consumer economy.”
   But even before the details of the plan were revealed, anti-tax activists promised to campaign against it.
   “As long as they’re not going to change the problems in education, we’re going to oppose another tax grab,” said Jason Williams, executive director of the Taxpayers’ Association of Oregon, a political action committee that supports lower taxes.
   Although the formal announcement was scheduled after press time, on Thursday morning Potter’s office said the proposal would be a .95 percent city personal income tax surcharge and a business income tax surcharge that would fill the shortfalls in Portland’s five school districts. In addition, the city would give the schools a one-time gift of $5 million from the city general fund, with $1 million going to each district.
   The tax would last four years, to give the Oregon Legislature two opportunities to provide more money for schools, said Nancy Hamilton, Potter’s chief of staff and longtime school funding activist.
   For Portland Public Schools, the funds would plug a $57 million hole caused by the expiration of the three-year Multnomah County income tax and budget cuts deferred from last year. Tax backers say that $57 million equates to 750 teachers or 75 school days. The gap is on top of $25 million in cuts made last year following the loss of federal school desegregation funds and expiration of a local option property tax levy.

Goodness, where do I begin.  First of all Whistler might be a self made man.  He might know what it’s like to be one of the little guys, who “have no other choices” in schooling their children.  But his excuse about the consumer economy is moronic.  What about the disposable income of Portland residents that is now going into that black hole that is the Portland Schools District?  That money is also not going into buying things at Kitchen Kaboodle, so how is taxing the general public creating disposable income for the benefit of Mr. Whistler?

An almost 1% income tax, for middle class residents, will amount to something like 400-600 dollars or more for the year.  That’s not taken out of your income by your employer, like stat and federal taxes, so instead of tax season being a time where families with kids can possibly be looking for a return, they are now looking at having to pay.  Those of you who are breaking even on taxes are now in a $500 hole.  1% is a little lower than the just over 1% extracted by the county tax, but little consolation.

Secondly, the article's writer (if it’s the writer’s words I’m reading) is being disingenuous by saying that the expiration of the previous income tax leaves a $57 million hole in the budget.  That’s not a hole if the people planning the budget recognized that the money would not be income this year.  I wouldn’t be surprised if the powers that be in the school system planned on the residents of this region voting to continue the tax, but calling it a hole is wrong.  $57 million was a bonus over the last few years to help out with the sluggish economy during the recession.  It’s additional money out of our pockets, as if the working people of Portland weren’t having their own problems during a recession, we end up having to pay more and actually make cutbacks in our lifestyle.  And politicians and administrators complain about having to cut back in theirs?

One of the excuses that proponents are lauding is that the “temporary” tax was in place until the state legislature fixed problems (or reluctance to raise taxes) in the education system.

Supporters, meanwhile, make their own arguments. “The reason we’re back to ask for community support is because the Legislature has again failed to do what they told us they would do,” said Otto Schell, a parent of a Buckman middle-schooler and vice president for legislation of the Oregon PTA.

Oh, please.  The reason that the legislature balked on this issue is that it didn’t HAVE to do anything.  No one is really putting any pressure on the state body to truly do anything productive about the fiscal problems in public education.

Frankly, instead of deal with the setback in income caused by the expiration of the “temporary” tax, the prevailing solution to budgeting is to find more money from taxpayers.  To do this they threaten to cut vital programs, or at least programs that everyone likes, instead of targeting waste in the bureaucracy.  Political blackmail.

Truth be told, I’m not against local support of schools.  What I am against is over taxation caused by unnecessary bureaucracy.  The state is bloated, and reform needs to happen.  One organization in town made the comment that the message from the state legislature was, “you’re not getting any help from here, save yourselves.”  But until that happens, I have to be against the local option, as the state still collects the same taxes as if they were footing the whole bill.  Show me the initiative, or slate of candidates that successfully knocks down the education budget of the state, and we’ll talk.

Since this article came out, there have been more.  The Tribune tried to get the results of a survey that the Portland Schools Foundation did in December, but PSF is refusing to release the survey as of yet.  The Trib wonders what is in that survey.  It’s interesting that the scope of the local income tax has been reduced, from the County to the City.  Mayor Potter had polls taken in all the surrounding counties to gauge whether or not it should become a regional tax.  One has to conclude that the tax polled poorly in the surrounding counties, and possibly in eastern Multnomah county, if they’ve pulled back and proposed a city-only tax.

Willamette week noted that promise broken.

Update:  Mayor Potter has already acknowledged sounds of opposition are louder and more ubiquitous than he expected.   So now he’s open to “other options.” 

Potter said internal polls showed that "voters were grumpy" about the idea of a new tax. But he believed momentum would build once he took his plan public.

Instead, he's hearing criticism that he and Nancy Hamilton, his chief of staff and a parent-activist who helped push the original I-tax, did not do enough to woo East Portlanders, businesses and voters weary of repeated City Hall appeals for more school money.

The other options in this article all involve raising tax monies in one arena or another.  Property taxes, income taxes, business taxes, even cell-phone taxes.

What gets me is that, reading this and the Trib article, they city officials, most of those interviewed, and the writers themselves, paint this impossible picture of impending doom if the money from the income tax is not replaced.  What would the world have looked like if the income tax had never been passed in the first place?  Would the School district have stayed within budget?  Would they have cut Football and Math?