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Revisiting Measure 66 and 67
Tax increases have had a minor effect on most local residents and small businesses
March 14, 2013
Three years have passed since controversial tax Measures 66 and 67 took effect in Oregon.
In the time since, local residents and business owners have faced varying degrees of financial impact.
Meanwhile, government representatives at the local and state level have yet to see the tax measures improve revenue the way they were intended to.
Local certified public accountant Mike Mohan has seen little change among his clients because of Measure 66. It imposed a tax increase on individuals who earned at least $125,000 or households earning at least $250,000.
“I have one or two clients impacted,” he said. “We are looking at people making in excess of $300,000 to $350,000, because they have deductions that they are able to claim.”
Measure 67 is a different story. It imposes a minimum $150 tax on all partnership-run businesses and Class S and Class C corporations, and consequently affects many local companies.
“We have had significant numbers of small enterprises that are affected by that, because every partnership pays a $150 minimum fee, where they didn’t used to pay anything,” Mohan said.
While the minimum was set at $150, the tax increases based on the income of the business. For example, companies who make between $500,000 and $1 million a year pay $500, while businesses that earned between $1 million and $2 million have to pay $1,000. The sliding scale tops out at $100,000 for companies that take in more than $100 million.
“We have had a number of businesses that have been affected by as high as a $1,000 or $2,000 minimum tax,” Mohan said.
While many local companies have felt the effects of Measure 67, some have not felt as much of a sting from the tax increase. Scott Porfily, Western Heavy Haul president, said he has barely noticed the tax increase.
“I mean, it’s higher. You have got to pinch every penny in today’s world, but it’s not a big enough amount to where we have had to go borrow any money to pay for it or anything like that.”
ABC Fence co-owner Larry Smith expressed similar feelings about the tax hike.
“I don’t think it is that much of an impact,” he said. “A lot of what we have to pay is the cost of doing business. As long as we all pay it, we are on equal ground.”
The primary purpose behind Measures 66 and 67 was to increase State of Oregon revenue as they faced increasing financial struggles because of the recession. Since taking effect in February 2010, Representative Mike McLane (R-Dist. 55) does not believe the tax increases have helped as much as some expected.
“Generally speaking, the fact that the Salem Democrats who control the legislature want to raise taxes yet again shows that Measures 66 and 67 were a failure,” he said.
McLane stated that proponents of the measures promised Oregonians if they just increased the taxes on corporations and families it would solve Oregon’s revenue problems.
“Now, here we are four years later and the Democrats in Salem are saying that there is not enough revenue and we need to raise taxes again,” he continued. “Mind you, there is $1.7 billion more in revenue for the next biennium, but that is not enough for these guys.”
Because some Crook County programs receive their funding from the State, they stood to possibly reap some financial benefit when Measures 66 and 67 took effect. As it turns out, the County has seen little change in State funding and the programs they help fund are still struggling.
Crook County Judge Mike McCabe pointed out that the County lost $144,000 of parole and probation funding in 2011, which the State has not yet restored. In addition, the State may cut funding for certain programs run by the Crook County Commission on Children and Families. While the State would continue to support early childhood services, they may not fund the poverty-related programs the Commission has historically provided.
Consequently, McCabe could not identify any specific benefits of Measure 66 and 67.
“It hasn’t really helped us,” he concluded.