This how to put Oregon schools and state government on a path to stable, sustainable funding: Stick Ontario Republican Cliff Bentz and Beaverton Democrat Mark Hass in a room and give them the task of developing a fair tax plan for the state.
That is the idea of state House Republican Leader Mike McLane, who suggested he would accept whatever the two legislators came up with up. He also mentioned a few other Republican and Democratic lawmakers who could be added to the mix.
The point is that a new tax plan can only be achieved by people who are pragmatic and collaborative, who entertain new ideas and who put the good of the state above self-interests.
That didn’t happen in the Legislature this year, despite the best attempts of Sen. Hass, Rep. Bentz and others. Labor was stinging from the defeat of the massive corporate tax hike contained in Measure 97 last fall, and constantly refought the battle in the Legislature. Business was divided on what to do next, instead of being conciliatory and collaborative after victory over Measure 97.
If there is good news from the legislative session that ended July 7, it is that lawmakers finally were talking about realistic revenue reform. It also is that lawmakers, especially in the state Senate, set a good example through bipartisan compromise on several contentious issues, including fair pay and predictable work schedules in the workplace.
Yet on revenue reform, the interest groups of business and labor could not achieve that same pragmatism. They stuck with their “all-or-nothing” approaches.
Most people agree that Oregon has an unstable tax system, especially for funding schools. Some consider a sales tax as the answer, but political history shows little chance of one being enacted in our lifetimes.
Hass and others, especially Democrats, advocate a type of sales tax to be paid by businesses — a commercial activity tax modeled after one in Ohio. Senate Republicans stood firm against that tax this year, especially after modeling showed threefold tax increases for some businesses.
And pension reform, which Republicans and the business community rightfully demanded in return for corporate tax increases, fell by the wayside.
Gov. Kate Brown is among those who say revenue reform will not happen until the 2019 Legislature. That would be unfortunate, leaving the tax debate to another set of divisive ballot measures next fall.
Rep. McLane might have the solution. Give the task to Bentz, Hass and a few other like-minded political pragmatists, since interest groups on either side have shown little ability to negotiate for the good of the state. We would suggest adding Rep. Brad Witt, D-Clatskanie, and Sens. Betsy Johnson, D-Scappoose, Bill Hansell, R-Athena, and Jackie Winters, R-Salem. All have shown the ability to work across party lines to solve complex issues.
Genuine tax reform should include these principles:
• A plan for ground-level examination of agency-by-agency spending, instead of building each budget based on what agencies and schools spent during the previous cycle. The concept of “roll forward” budgets should be eliminated in favor of “zero-based” budgeting that starts with where the dollars will do the most good.
• A holistic look at corporate, individual and other taxes and fees. Lawmakers and the public need an unbiased understanding of how much each sector pays for government, instead of relying on partisan-based studies.
• Appropriately matching expenses with revenue, while providing stability in both areas.
• Reform of the Public Employees Retirement System and of public employee health care premiums — two of the highest costs for governments and schools. All options must be on the table, especially for PERS, so they can be finally settled in court instead of being an ongoing battle in each legislative session.
Such an approach would benefit public employees, public agencies and the public. That work must start now.