Link to Owner Dr. Robert B. Pamplin Jr.



Thanks to the pandemic, the timing couldn't be more wrong to raise taxes on individuals and businesses.

PMG PHOTO: JAIME VALDEZ - There were about 20 tents pitched at a new outdoor homeless shelter on Southeast Water Avenue at Main Street in Portland on Monday, April 20.With a vicious recession already underway in Oregon, this is the most inopportune time for local governments to propose new ways to spend tax dollars.

Every taxpayer-supplied penny available — and likely more — will be needed over the next two years just to retain existing, critical state and local services such as education and healthcare.

For this reason, we cannot support Metro's Measure 26-210, which would raise money for wrap-around services for people who are homeless. This measure was hurriedly devised early this year and pushed forward to the May 19 ballot before the magnitude of the COVID-19 crisis was fully understood.

In those days of a seemingly strong economy, Metro councilors figured they could get voters to approve a homeless-services tax in May and come back in November with a transportation package for voters to consider. But the virus has changed everything. We were skeptical of the measure before, but now, just the timing by itself is reason for voters to reject it.

A look back at the last two recessions provides needed perspective. In 2003, in the midst of a less-severe economic downturn, the Legislature had to make substantial cuts in state spending. It tried to raise taxes through Ballot Measure 28, but voters lacked the stomach for it. As a result, Oregon ended up on the comic pages of the nation's newspapers — literally — for the shortness of its school year.

Seven years later, after the Great Recession had devastated the state budget, the Legislature again made severe reductions and asked voters to backfill spending through two ballot measures. This time, voters obliged and supported raising taxes on businesses and higher-income individuals.

There's no doubt Oregon's government is headed into another fiscal crisis, and the debate will resume again over what to cut and how to raise money to soften those reductions. As reported in this week's paper, Oregon is likely to lose billions in tax dollars due to the virus.

Oregon collects 90% of its general fund revenue from individual and corporate income taxes. These revenues are about to be crushed. Nearly 300,000 people in Oregon have filed for unemployment in the past few weeks. Vast numbers of businesses are closed and bringing in no revenue to be taxed. Dollars from the new corporate activities tax will be far, far below projections.

Metro's homeless-services measure would tax high-income individuals and families, as well as business profits. The money would be used to pay for services that help move people out of homeless camps and into more stable situations. The purpose is beyond reproach, but businesses that are closed will have no profits to tax and people out of work will no longer be making salaries, high or otherwise.

Metro's revenue projections for this measure are seriously out of date, but the point isn't how much money might be raised. Rather, it comes down to brutal assessments of priorities.

Without unprecedented federal support, which seems doubtful in the amount needed, Oregon is about to enter a time of government scarcity. State and local jurisdictions will have to decide whether to cut school funding, whether to limit access to health and human services, and whether to reduce availability of many other critical programs that support the most vulnerable of Oregon residents.

In endorsements earlier this spring, we encouraged "yes" votes on public safety levies in Washington County and Tigard, as well as the renewal of the Washington County Cooperative Library Services levy. We stand by that. These are essential services; in the case of the county levies, they are familiar funding mechanisms voters have approved before, and in Tigard, the levy was pared back and polished up to be as efficient, low-impact and bare-bones as possible even before the current crisis.

But the Metro measure is another matter.

We've already criticized, on this page, the slapdash construction of the homeless-services measure. For something so important — and we agree that getting people off the streets and into supportive housing is an important goal — the process was absurdly rushed.

Refer to our Feb. 26, 2020, editorial about Metro's hasty process.

It often takes a year or more for a major money measure to be crafted. Metro itself has been eyeballing that transportation package still planned for this November for several years. Compressing the homeless-services tax process into a few weeks was bad for transparency and led to embarrassment for Metro officials — we hope they were embarrassed, anyway — when projections had to be revised and re-revised due to errors that would have certainly been caught with a more thorough vetting.

We don't have confidence that this measure will accomplish its goals, we don't believe taxpayers should reward Metro for a reckless and haphazard rush to the ballot, and we see clearly that circumstances have changed drastically since January. It's time for the state government, local governments and, yes, the regional government to zero in on what they need to keep providing vital services, rather than inventing new roles for themselves. Until the severity and length of this financial crisis is fully understood, new funding initiatives should be delayed.

The robust economy that was encouraging a number of jurisdictions to head to the ballot this year has dissipated.

Both public officials and voters will need to adjust to this new, unfortunate reality.

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