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The claim by the Taxpayer Association of Oregon PAC is that state Senate Majority Leader Richard Devlin, D-Tualatin, implemented $1 billion in new taxes in one day.
The mailer goes even further to drive the point home to voters: The $1 billion comes down to more than $41 million an hour, or nearly $700,000 a minute, or $11,574 each second, and the question asked on the other side of the mailer is, "Can we afford four more years of Richard Devlin?"
It certainly sounds like we can’t.
But, as always, context matters, and PolitiFact Oregon set about to uncover the meaning behind the mailer.
First up, a call to Jason Williams, co-founder of the PAC that paid for the mailers, which have also targeted other Senate Democrats in swing districts. He cited three bills, which legislative records show were passed on one day: June 11, 2009.
The Oregon House had approved and sent to the Senate separate bills that (1) would raise personal income tax rates on wealthier households, (2) would raise taxes on corporations, and (3) would raise taxes on hospitals and insurers to provide health care for needy kids and adults. All told, the bills added up to $1 billion in the 2009-11 budget period. So that’s true.
But let’s take a closer look at those bills.
House Bill 2649 created two new tax brackets, including a 10.8 percent bracket for joint filers with income above $250,000 and for single filers with income above $125,000. For tax years after 2011, the rate is scheduled to drop to 9.9 percent. The bill also phased out some federal tax deductions. The Legislative Revenue Office estimated it would raise taxes for 2.5 percent of full-year individual filers (38,000) and 6.1 percent of returns (25,600) that report business income or loss. The proposal was projected to raise $472 million in 2009-11; it became Measure 66 in the January 2010 special election.
House Bill 3405 raised the corporate minimum tax from $10 -- first set in 1931 and untouched until 2009 -- to a sliding scale of $150 to $100,000 depending on sales in Oregon. The $10 minimum for S-corporations went from $10 to $150. The bill also created a second tax rate of 7.9 percent and implemented filing fees. The Legislative Revenue Office estimated this would affect more than 75 percent of C-corporations and nearly all 62,000 S-corporations. The proposal was projected to raise $261 million in 2009-11; it became Measure 67 in the January 2010 special election.
That gets us to $733 million, by targeting upper-income households and corporations. Both bills were approved to help close an estimated $4 billion state budget gap. All 18 Democrats in the Senate voted for both bills; no Republicans did. Anti-tax activists collected enough signatures to put the issue to voters, who agreed to keep the tax increases.
These are not taxes that would hit the pocketbooks of the average Joe, but PolitiFact Oregon accepts that such taxes could affect employees and consumer prices.
Now, for House Bill 2116, which wasn’t designed to balance the state budget but to expand health care coverage in Oregon.
This proposal did two things. One, it levied a 1 percent tax on insurers, projected to raise more than $115 million in 2009-11 to insure 80,000 children. Two, it replaced an expiring tax paid by hospitals, and was projected to raise $300 million for low-income adults without health care. Hospitals, the entities paying the tax, actually backed the legislation because it would allow them to recoup more money from Medicaid. Two Republicans joined all 18 Democrats in the Senate to approve this bill.
Again, we’re not sure how much the hospital tax -- not the insurer tax -- affects regular people in Oregon. So we called Williams back to get his take on the impact of the three bills. He was flabbergasted that we would even ask. Everyone pays, he said, when businesses fail or workers are laid off or prices go up.
"It’s a billion dollars of taxes," he said.
PolitiFact Oregon understands that a little bit of hyperbole is allowed in campaigns, although the per-second breakdown makes it sound as if Devlin is continuing to tax people at an unbelievable clip. The statement also ignores the fact that when measures 66 and 67 were put to Oregon voters they passed by wide margins.
On the one hand, the statement is accurate -- taxes did go up by $1 billion. And Devlin as majority leader had considerable influence even though the statement makes it sounds as if he did it alone.
But the statement leaves out important details, such as why the need, over how long and who agreed to them. We rate this Half True.
Oregon Department of Revenue, Measures 66 and 67
The Oregonian, "Oregon moves to expand aid to uninsured," May 29, 2009
Statesman Journal, "Oregon Senate approves tax increases that add up to $1 billion," June 12, 2009
Statesman Journal, "Bill expands health insurance coverage," June 12, 2009
The Oregonian, "Businesses taxed more, people still taxed most," June 14, 2009
Oregon Center for Public Policy, "OCPP Charts Simple Explanations of Measures 66 and 67," Nov. 3, 2009
Legislative Revenue Office, "Research Brief Measures 66 and 67: Frequently Asked Questions," November 2009
Interview with Jason Williams, Oct. 26 and 27, 2010
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