The Oregon Constitution
requires that all bills that raise revenue must
originate in the House of Representatives. Article 4,
section 25 (2) of the Oregon Constitution further
states: “Three fifths of all members elected to each
House shall be necessary to pass bills for raising
amendment, proposed by the Legislative Assembly through
House Joint Resolution 14 in 1995, was adopted by the
voters of Oregon in May of 1996 as Ballot Measure 25.
The Legislative Argument in support of Ballot Measure 25
stated in part: “Ballot Measure 25 would thus ensure
that higher tax rates could be passed by the Legislature
only if there was a broad consensus throughout the state
on the need for such measures”.
A bill for raising revenue
can be either a bill that increases taxes or a bill that
reduces or repeals tax expenditures. Tax expenditures
are tax breaks, such as specific tax deductions or tax
credits, that reduce the amount of taxes owed.
One example of commonly
used tax expenditures is the home mortgage interest
deduction used by virtually all home owners with a
current mortgage. Another example would be the Earned
Income Tax Credit that is accessed by virtually all low
income Oregon families to receive a refund on their
Oregon income tax.
A three fifths majority
vote usually requires bipartisan support because it is
unusual for one political party to hold three fifths of
the seats in both chambers. For instance, even if all
members of the Democratic Party voted for a bill to
increase taxes, the current makeup of this Legislative
Assembly would require a minimum of two Republican votes
in the Senate and four Republican votes in the House in
order to enact the law.
It is very troubling to me
that the current Democrat leadership of the House of
Representatives appears to be attempting to circumvent
the clear meaning of the constitutional amendment
adopted by the people of Oregon that requires that three
fifths majority vote. They appear to be reading the
constitutional amendment to mean that any bill that is
“revenue neutral” would not require the constitutionally
required three fifths majority vote.
They appear to believe that
by drafting a two part bill, that is revenue neutral,
they can avoid the constitutional requirement for a
three fifths majority vote. The apparent plan is to
draft legislation that increases revenue by enacting new
taxes and that simultaneously and equally reduces
revenue by enacting new tax expenditures.
Legislative Counsel is
employed by the Legislative Assembly and is charged with
the responsibility to professionally draft all Oregon
legislation and to advise members on the meaning and the
constitutionality of Oregon law. It is even more
troubling to me that our own professional legal counsel
appears to be complicit in this blatant attempt to scam
the people of Oregon by circumventing the clear meaning
of the Oregon Constitution.
All sorts of untenable and
disingenuous legislative games may occur if this “brave
new world” interpretation of the Constitution is allowed
For instance, a real estate
transfer tax might be enacted that is offset by
increasing the earned income tax credit. This would
extract taxes from home owners when they sell their
property and redistribute the new revenue to low income
Oregon families. This new interpretation of Oregon law
would mean that the tax increase paid by the homeowner
who sold their property would not be considered a tax
because the money raised was redistributed to low income
families in the form of tax credit expenditures.
Another scenario might be
to reduce, or eliminate the home mortgage interest
deduction and offset that tax increase with an equal tax
reduction by raising the Earned Income Tax Credit. The
possibilities to redistribute wealth are endless using
this new found formula.
Whether our state needs to
raise more revenue, through new or increased taxation or
by reducing or eliminating certain tax expenditures, is
a legitimate conversation. In my opinion, the more than
thirteen percent increase in revenue already projected
for this budget period should be more than enough to
meet our spending needs.
But the apparent House
Democrat plan to redistribute income by circumventing
the clear meaning of the Oregon Constitution would make
a mockery of both the Constitution and fair tax policy.
We have not yet seen the contents of the contemplated
bill, but it is common knowledge in the Capitol that
such a bill is being worked.
All Oregonians should
vigorously oppose such blatant manipulation of Oregon
A second equally onerous
bill was voted out of the Oregon Senate today.
SJR I-A proposes and
amendment to the Oregon Constitution to issue General
Obligation bonds to finance the Oregon Student
Opportunity Fund. The Resolution asks the people to
decide whether the state should borrow money to create
an endowment fund for the State Treasurer to invest in
The plan would be to use
any return on investment from the corpus of the
endowment fund to give to students to help pay for the
cost of higher education. The principle and interest on
the borrowed money would be paid by the taxpayers of
Oregon through General Fund appropriations.
The Resolution also
provides that, if the Governor declares an emergency,
the Legislative Assembly may use the money in the fund
for any other lawful purpose if they approve of that use
by a four fifths majority of the members present in each
chamber. Please note that this resolution does not
require an eighty percent majority vote of all members,
but only an eighty percent majority of the members
actually present in the chamber at the time of the vote.
One Senator observed in her
comments on the Resolution that “this is a good business
Although I had not planned
to speak on this bad bill I did respond in part:
“So the plan is to borrow
money to invest in the markets, give away any investment
returns, and allow someone else, the taxpayer, to pay
off the debt. Take that proposition to your local
business banker… if you have the nerve!”
Please remember, if we do
not stand up for rural Oregon no one will.