Tax measures debated at forum

Sided by Richard Burke of Americans for Prosperity, state Rep. Cliff Bentz takes the microphone to argue against Measures 66 and 67. - CHRIS BAXTER / Observer photos

The forum, co-sponsored by Americans for Prosperity and the Union County Chamber of Commerce, featured speakers from the public and private sectors, and wasn’t without its moments of humor.

“I’d like to apologize for running a successful corporation for the last 25 years,” local businessman Greg Baretto said as he took the stage to tell about impacts the measures would have on Baretto Manufacturing.

If approved, Ballot Measure 66 would raise personal income taxes on individuals earning $125,000 or more, and on households earning $250,000 or more for the 2009 tax year.

A “no” vote on the measure would reject the proposed tax changes. It would also reject a tax exemption for the first $2,400 of unemployment benefits received by individuals in 2009.

Ballot Measure 67 would raise the $10 corporate minimum tax to $150 for most businesses, and also raises the tax rate some corporations pay on profits by 1.3 percent.

 The measure also increases business filing fees by $50 for Oregon businesses and by $225 for out-of-state businesses.

Combined, the measures would raise $733 million for education, health care, public safety and other services. Those speaking in favor Thursday hammered home the need to adequately fund those things.

Brynne Morningstar, an Iraqi war veteran and Eastern Oregon University student, said that as a student she supports funding for education over tax breaks for the wealthy.

“Those who are in a position to step up and make sacrifices should do so,” she said.

Morningstar was one of several people speaking in favor. They included retired educators Bill Whitaker and Jerry Sebestyen, and Mary Kay Brant, a representative of the

Oregon School Employees Association.

Sebestyen said he thinks it is important to protect funding for schools and other public services, and added that the impact of the proposed Measure 66 tax hikes is minimal for Union County.

For individual taxpayers earning more than $125,000, the tax rate would go up 1.8 percent, boosting the overall rate to 10.8 percent. In 2012, the overall rate would go back down to 9.9 percent.

Only a few Union County taxpayers will be affected at all, Sebestyen said.

“In Union County, this amounts to about 130 filers, he said.

Whitaker, a retired college professor who recently moved to La Grande from Boise, said he worries about the future of Union County public schools.

“These taxes are necessary to protect critical resources in Union County,” he said.

He said that if the measures are defeated, Union County stands to lose $2 million in funding for grades K-12.

“That works out to $440 per student,” he said, adding that Eastern Oregon University would also be affected, losing $1.7 million from its budget.

Those speaking against the measures included Richard Burke of Americans for Prosperity and Cliff Bentz, state representative for District 60.

Burke told the crowd that the tax isn’t necessary because the state has about $4 billion in reserve funds it could use to fund the public services.

He also said the measures will have an adverse effect on employment.

“This is a job killer,” he said. “I’m not a fan of President Obama, but even he said the dumbest thing you can do in a recession is raise taxes.”

The forum featured extensive discussion but little agreement about threats to jobs.

Burke cited a study that says the measures would cost more than 55,000 jobs, but Sebestyen, arguing the other side, said failure of the measure would lead to higher unemployment immediately because many public employees will be laid off.

Retired local educator Jerry Sebestyen, left, argues the merits of Measures 66 and 67, which are on the ballot Jan. 26. At his side is Brynne Morningstar, an Eastern Oregon University student who also favors passage.

“When businesses get taxed, they pass the cost on to you,” he said.

Bentz, the state representative, said the measures offer only a temporary fix for budget problems that are going to linger for a long time.

“We are going to be looking at a situation far worse two years from now,” he said. “Are we going to raise taxes, and then raise them again in two years?”

Bentz also said he thinks the proposed tax increases are unfair.

“I don’t think we should have just the top end paying when we’re in a tough economic time,” he said.

Brant said her union represents people who work outside of classrooms, cafeteria and maintenance employees and the like.

She said many are already undergoing hard times, and will be worse off if the measures fail. But more, the quality of local school systems will continue to deteriorate.

“We’re asking that the people who can afford it put something in the kitty,” Brant said.

Baretto, along with Bronson Lumber owner Mace Cadwell, made statements gauging impact of the measures on business.

Saying he stands to be taxed an additional $15,000 if the measures pass, Baretto said the idea that upper-income people don’t pay a fair share is false.

Currently, the minimum corporate tax is $10. The minimum applies to corporations that break even or operate at a loss. Successful businesses do pay heavy taxes, Baretto said.

“All I know is, as a corporation we have paid hundreds of thousands of dollars in taxes,” he said.

Cadwell also said his tax bill is high. He characterized the proposed tax hikes as a “forced sales tax.”

“A company has no way to recoup the cost but to add it to product going out the door,” he said.

Cadwell said the recession forced him to cut his labor force by 15 people, and predicted he will have to eliminate 1-3 more positions if the ballot measures pass.

Like all of the speakers, Cadwell said he supports funding for education and public safety, but added that job creation is the real answer to the state’s

economic problems.

“We’ve put our loggers and miners out of work,” he said. “We had the money before, but we shrank our tax base and put the burden on more and more people.”