Recently there has been a lot of discussion about the effect that the Federal Stimulus package, Obama Just signed it, will have on the economy of Oregon. The total impact for Oregon businesses will be minimal and the impact on individuals even less.
The Oregon legislature, a few days prior to the signing of the bill by Obama, cut the Oregon tax code loose from the Federal tax code. This was done because the Federal package contains tax cuts to businesses and to individuals. Tax cuts are said to cost the government of Oregon money.
However, Oregon has a two-year budget processes in which they project the amount of tax dollars that the state will receive. The legislature, and the governor, then makes spending plans based on the projection. They do not make plans on spending the based on how much actually comes in. The result is that there is a “shortfall” which is the amount of money they are projected to not receive. At no point in the budget process do they actually spend real money.
At no point in the process do they make any real cuts or spending adjustments either. It is all based on projections of what they think will wind up in the state coffers or not wind up there. Therefore the only way for them to keep the budget balanced is to cut services, or raise taxes and fees. A federal tax cut for business is good for the business. They get to stay open, pay employees, pay state, federal, local taxes and fees.
But the budget “projection” shows a shortfall in state collections, can’t have that, resulting in the raising in fees at the local and state level. Explaining why the state took the action that they did. An action that both the governor said was to balance the budget and keep schools solvent, schools that gobble up piles of money and fail to educate the children in their care.
So Average taxpayer, making forty grand or less at a job that will not give you a raise this year. No tax relief for you because the state is unwilling to run heir budget process based on real money.
Sherman
