Resolving the revenue reform question requires working together
Friday, October 28, 2016
OSBA’s revenue reform proposal has been a hot topic issue for discussion at the OSBA Fall Regional meetings across the state. We are hearing from members that revenue reform and additional funding for K-12 public education is needed. Attendees like and support the OSBA proposal to “remove the comma” from Article 8 Section 8 of the Oregon Constitution.
The current language in Oregon’s Constitution requires the Legislature to fully fund education as defined by the Quality Education Model (QEM) revised annually by the Quality Education Commission. But the language allows the Legislature to write a report instead if it is unable to fully fund education as defined by the QEM. Removing that report-writing “out” would require the Legislature to designate approximately $2 billion more in funding to K-12 education each biennium.
Attendees at our regional meetings also agree that we need to propose changes addressing the continued cost drivers of PERS and health insurance. But we hit a stumbling block when we talk with members about how we raise revenue to provide the additional $2 billion in funding for K-12 schools if Ballot Measure 97 does not pass.
Overwhelmingly board members are concerned about the impact of any tax measures on Oregonians as a whole and on businesses and our economy in Oregon. The OSBA revenue reform workgroup proposes taxing commercial activity greater than $1 million on all businesses.
In response we have heard suggestions that we raise the $1 million threshold to impact fewer businesses, and suggestions that we lower the threshold, broadening the base further, but also lower the rate.
In comparison to Measure 97, the corporate minimum tax on C corporations with sales in Oregon in excess of $25 million, the OSBA proposal impacts a much larger and broader base of businesses – but with a much lower rate. Other suggestions from attendees include providing exemptions for specific industries such as agriculture, or developing a graduated tax rate recognizing that some industries have much lower profit margins than others.
Regardless of whether Ballot Measure 97 passes, Oregon clearly needs to address funding for public education. There is broad agreement with this statement by OSBA members. The results of the Oregon Rising survey of over 10,000 Oregonians show that Oregonians’ hopes and dreams for public education are currently not being met.
While these hopes reflect a desire for an Oregon education for children that will keep us competitive with the rest of the country, these dreams require a substantial increase in funding from where we are now. OSBA is prepared to pivot the proposed revenue reform work we are discussing at the Fall Regional meetings in response to Measure 97’s passage or failure. In either case we will be looking at cost control measures for PERS and healthcare, and a way to ensure available funding is directed to public education.
In the long run there is no solution that will not require Oregonians to step up to the plate with additional taxes in some form if we hope to prepare children to be competitive and prepared for their future. That means providing them with a full educational year, increased contact time, smaller class sizes and a well-rounded education including the arts, STEM and career technical education.
Finding a proposal that will generate support from a majority of Oregonians is no small challenge. This work is hard, and it is important for our future and our children’s future. We will continue to work with you to find solutions.