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Editorial: Tax task force changes must be palatable The (Eugene) Register-Guard: In the closing hours of the longest legislative session in history, Oregon lawmakers prepared to address a primary reason they'd stayed in Salem so long: The state's tax system does not deliver a stable stream of income to support public services. Legislators voted to create a task force to study the tax system, and its recommendations will be considered in a special session next spring. Revenue from the state income tax, the primary source of support for state services, booms in good times and busts when the economy turns sour. The approval of the Measure 5 property tax limitation in 1990 shifted responsibility for school finance to the state, exposing public education to the volatility of the income tax. Oregon lacks a reliable means of building up rainy-day reserves. The income tax itself is both high and flat - single Oregonians with taxable incomes of more than $6,250 pay the top rate of 9 percent, which is among the nation's highest. Property taxes are also high, making the monthly cost of owning a home daunting. No one starting from scratch would devise such a system. Oregon's history, however, is littered with the wreckage of proposals for comprehensive tax reform. Chances are poor that the legislative task force will come up with a grand plan that solves all the problems of the state's tax system. Still, it ought to try - and the effort must involve Oregonians of every political persuasion. Any successful tax-reform proposal will need the support of legislators from both parties and those who elected them. While attempting to enlist the participation and support of all Oregonians, the task force should bear in mind that constructive changes can be made even in the absence of fundamental reform. For instance, Oregon's "kicker" law should be amended or repealed. When income tax revenues exceed projected amounts by 2 percent or more, the entire amount must be refunded to taxpayers. This prevents the state from building up reserves during periods of economic growth. Another example: The Measure 5 property tax limitation restricts Oregonians' ability to pay for the local services they want. In Eugene, Multnomah County, Ashland and other communities, the voters have approved city or county taxes to support local school districts. Voters' willingness to accept those inequities demonstrated their interest in maintaining school programs. A switch to annual budgeting would be still another improvement. The Legislature's budget governs state spending through mid-2005. It's impossible to accurately predict costs, demands and conditions that far in advance. Oregon's system of public finance would gain a greater degree of stability by the simple act of adopting a single-year budget cycle. None of these modest changes would amount to comprehensive reform. Each, however, would make the current system work better. If a fundamental overhaul of the state tax system proves to be out of reach, incremental improvements could still yield productive results. LINKS: DAILY TIDINGS: Main | News | Sports | Obituaries | Opinion | Columnists | AP News | Subscribe | Archives | Weather | Classifieds | Contact Us | Privacy REVELS: Main | Calendar | Dining | Movies | T.V. OTHER: Road Cams Copyright 2003 Ashland Daily Tidings 541.482.3456. 1661 Siskiyou Blvd., Ashland, OR 97520. Ottaway Newspapers, Inc. - Advertisers -