5J Board urges voters to OK tax measures

The Baker School Board approved a resolution Monday night supporting Oregon’s tax-raising Measures 66 and 67, which voters will decide on in a Jan. 26 statewide special election.

If approved,the measures would boost taxes on some individuals and corporations.

Some of that money would go to schools.

The resolution was approved by a 4-1 vote with Deon Strommer, board chairman and the owner of Subway sandwich shops in Baker City and La Grande, opposed.

Strommer says he objects to the tax increases, which the Legislature approved earlier this year, because of the effect they would have on the private sector.

“There would be a negative effect on jobs,” Strommer said, adding that he opposes taxing a business based on gross sales, which is part of the strategy employed by Measure 67.

Director Rusty Munn countered with a study that he said showed there would be job losses whether the measures pass or fail, with state agencies bearing the financial brunt if the measures fail.

In addition to job losses in public schools, the state also would be forced to cut public safety services, health care and higher education.

Voter approval of the measures would uphold the Legislature’s decision to increase the corporate minimum tax, the corporate income tax and income taxes on households and wager earners making  more than $125,000 individually or $250,000 jointly per year.

Lawmakers used the $733 million the tax increases are expected to generate to balance the 2009-11 budget.

Opponents of the tax hikes gathered enough signatures to place the two measures on the Jan. 26 ballot.

If voters reject the measures, the tax increases would be repealed.

If that happens, the Baker School District alone could receive $745,000 to $1.1 million less from the state during this school year and the 2010-11 year, according to the resolution the board approved.

Baker Superintendent Don Ulrey, along with Doug Dalton, the district’s new business manager, will be presenting information about the measures to community groups in the weeks ahead. State law prohibits the school officials from lobbying for the measures.

School board members, however, are under no such constrains.

As part of Monday’s resolution, which touts the measures as a “tax fairness package,” directors Damien Yervasi, Lynne Burroughs, Rusty Munn and Ginger Savage urged “parents, staff and community members to vote yes and to actively support the measures.”

Ulrey pointed out during Monday’s meeting that 97.5 percent of the state’s taxpayers will see no increase in their tax bill if the measures pass.

In fact, according to the “Yes on 66 & 67” committee, passage of Measure 66 would reduce the tax bill of unemployed workers by exempting from taxes the first $2,400 of their 2009 unemployment benefits

The measure would require individuals earning more than $125,000 per year to pay an extra 1.8 percent on income above $125,000; in 2012 that percentage would be cut in half.

The same would apply for taxpayers who file jointly, as a head of household or as a surviving spouse who declare more than $250,000 in taxable income this year. They would pay an extra 1.8 percent on taxable income above $250,000, with the percentage cut in half in 2012.

Businesses with annual sales of less than $500,000 (88 percent of all Oregon businesses, excluding sole proprietors, who pay no business tax), would pay a $150 minimum tax if Ballot Measure 67 passes, according to the proponents of the tax plan.

C-corporations, which are those subject to federal corporate income taxes, that declared more than $250,000 in taxable profits would be required to pay an additional 1.3 percent on the declared amount of more than $250,000 if the measure passes. In 2013, those corporations would pay more only on profits of more than $10 million.

C-corporations whose gross sales in Oregon were more than $500,000 would pay one-tenth of 1 percent of those sales if voters approve Measure 67. For example, a businesses with Oregon sales of $500,000 to $1 million would pay $500 in new taxes.

Oregon’s current corporate minimum tax of $10 has not been increased for more than 75 years.

“I understand how some business people could be opposed,” Burroughs said, prior to voting for the resolution supporting the measures. “But I don’t see how we have a lot of choice.”