Taxes and Oregon’s 2019 legislature: a new low in abuse of political power

powercorrupts

 

“Political expediency corrupts moral integrity, language and truth itself,” journalist Dorian Lynskey writes in a new book on George Orwell’s “1984.”

The Democrats running Oregon’s state government have shown the truth of that.

Efforts by Oregon’s Democrats to derail a public vote on a gross receipts tax reveal that, as put by conservative writer Jim Swift, “Being an asshole has now become a feature, not a bug,” in politics.

Setting a new low in political shenanigans in the 2019 session, Democrats began by passing a gross receipts tax on sales inside the state’s borders that exceed $1 million, whether or not the business makes a profit.

The tax, equivalent to a sales tax, is expected to raise $2 billion per biennium. This less than three years after almost 60% of Oregon voters rejected Measure 97, a ballot measure that would have imposed a state gross receipts tax.

In an insulting, arrogant move to protect their revenue-raising blitz, the Democrats then passed a bill (SB 116) setting a particularly inconvenient election date if a tax repeal petition then seeking signatures qualified for the ballot. Rather than having the vote take place during the general election in 2020, when there’s likely to be high interest and participation, the bill provided for a special election on January 21, 2020.

I guess they figured picking Christmas or New Year’s Day for the vote would be too obvious an attempt at manipulation.

Adding insult to injury, the Democrats then passed another bill (HB 2164) which changed the language of the original tax. At the time, The Oregonian reported only that the bill “makes largely technical changes to the new business tax lawmakers passed earlier in the session to fund education.” But it was much more significant than that. If Gov. Brown signs the bill, it will invalidate all the signatures already gathered on a repeal petition referencing the previous language.

“HB 2164 is designed to look like a cosmetic language change to a 40-page tax bill, but it contains poison words designed to murder the voter campaign to pass petition #301 (the repeal petition),” said the Taxpayer Association of Oregon.  “….it is borderline criminal to rob the people of their right to vote on matters they care about. Politicians should not be able to subvert and void the people from using their initiative process to petition their government.”

Having achieved a supermajority in the 2019 Legislative session, the Democrats proceeded to ignore their ethical responsibility to Oregonians and abuse their power, vividly illustrating the observation of Lord Acton, the 19th-century British historian: “Power tends to corrupt. Absolute power corrupts absolutely.”

As Senate President Peter Courtney, D-Salem, said at the end of the Legislative session, “I thought we were overreaching before we started. I think we did.”

“What kind of fool do you take me for?”, asked one of the Three Stooges in Saved By The Belle. Oregon voters should be asking the same thing of Democratic legislators.

 

 

 

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Union Members Can Stop Subsidizing Liberal Candidates and Causes

 

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A question to conservative Oregon union members (I know you’re out there): Why are you contributing to union political funds when most of the money ends up supporting liberal Democratic candidates?

About 18% of the electorate across the country was from union households in the Nov. 8, 2016 presidential election. Donald Trump captured 43% of those union-household voters.

In Oregon, 14.8 percent of the wage and salary workforce belonged to a union in 2015. It’s not clear how they voted, but it’s likely, based upon national patterns, that a decent share voted Republican.

Still, Oregon’s unions overwhelming endorsed Democrats. For example, all but two of the AFL-CIO’s 2016 Legislative endorsements in Oregon were for Democrats (one was an independent, one a Republican), as were all the statewide candidate endorsements.

Similarly, in the 2016 election, political contributions from Oregon’s unions went overwhelmingly to Democrats. For example, SEIU’s PAC, Citizen Action for Political Education (CAPE), spent $2,001,758.89 on the 2016 election. Of that, $706,750.00 went to Defend Oregon (the group pushing Measure 97), $205,000 to the Committee to Elect Brad Avakian, $180,000 to the Kate Brown Committee, and $37,380 to The Real Mike Nearman Committee (created to defeat Republican Mike Nearman).

So why don’t more union members who disagree with their union’s political stances decline to contribute to their union’s PAC and opt out of supporting the union’s political activities. It’s not that hard to do. All a union member has to do is become an “agency fee payer”, sometimes also called a “Fair Share Payer” or “Non-member.”

Oregon allows public employees who are part of a collective bargaining unit to refuse membership in the union that represents that unit. But because the union still has to negotiate on their behalf, these nonmembers must contribute to cover costs which cover collective bargaining, contract administration and grievance adjustment, but not costs associated with political activities.

This worker right was established in 2012 when the U.S. Supreme Court decided that while employees can be required to pay dues for the direct benefits they get from the union, they can’t be forced to give money to unions for political activities.

According to Steve Buckstein,  Founder and Senior Policy Analyst at Cascade Policy Institute, even before the 2012 Court decision, a telephone company employee named Harry Beck spent over two decades fighting for the right to opt out of paying the political portion of his union dues to the Communications Workers of America. In 1988, the U.S. Supreme Court ruled in his favor in Beck v. CWA and created what are now known as Beck rights. Harry is now retired and lives in Oregon. You can watch him tell his story here: https://www.youtube.com/watch?v=a29L3ouJ6tw.

Political spending by unions can be substantial…and influential.

In a Sept. 2015 report to individuals who pay Fair Share fees, the liberal-leaning Oregon Education Association (OEA) said 22.9 percent of its total expenses were nonchargeable for Fair Share fee payers and the liberal-leaning National Education Association (NEA) said a whopping 62.71 percent of its total expenses were nonchargeable for Fair Share fee payers.

This means that if annual OEA dues were $600, they could have been reduced to $462.60 and if annual NEA dues were $185, they could have been reduced to $68.99.

Think of it. Workers, rather than union bosses, deciding for themselves how, or whether, they want to spend their money on political causes.

 

Troubling Tax Breaks for Data Centers

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One.

That’s how many jobs LinkedIn had to promise it would create to get five years of big property tax breaks for its new data center in Hillsboro that opened in mid-November.

LinkedIn told DatacenterDynamics that the major reasons it chose Hillsboro were: (1) access to green energy resources; (2) access to good global communications networks; (3) mild temperatures; and (4) tax exemptions in Oregon’s Enterprise Zones.

The reasons may be right, but don’t believe the order LinkedIn gave. “It is doubtful if this was the real decision-making hierarchy since taxes would be the data center’s biggest operating cost,” DatacenterDynamics said.

In other words, the property tax exemption under Oregon’s Enterprise Zone program, which can be worth millions to qualifying companies, was the major lure.

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LinkedIn’s new data center in Hillsboro

Oregon’s Enterprise Zones are designed to attract investments by exempting businesses from 100 percent of local property taxes on new plant and equipment investments for up to two years while construction is in process and up to five years after that if they are growing employment in the zone.

Enterprise Zone contracts require that if a data center already operates inside the Zone and applies for benefits or renewal, it is required to increase employment by just ten percent. If a firm locates a new data center in the Zone it only needs to add one employee to be in compliance.

Because IT equipment in a data center must usually be refreshed within 5 years, the net effect is that there is no tax in Enterprise Zones.

But is the tax break justified?

Hillsboro’s aggressive marketing of the tax exemption has drawn multiple data centers to the city, all gobbling up valuable land within the urban growth boundary and generating a minuscule number of jobs. Current data center operators  include Infomart, ViaWest, Telx, NetApp and T5. LinkedIn’s data center is located in property leased from Infomart.

Infomart says its Hillsboro site benefits from a combination of energy efficiency, inexpensive power, abundant domestic and Trans-Pacific network choices. The most important benefit, however, is the five-year real and business property tax exemption for new equipment and construction. “Since IT equipment is typically refreshed within 5 years, the net effect is that there is no tax, neither sales nor property, on IT equipment in these Enterprise Zones,” Infomart highlights on its website.

That “translates to massive cost-savings for our customers,” Infomart says, and makes Oregon “… the lowest cost state for leased data center operations in the United States.”

Thankfully, Hillsboro taxpayers can easily find out the value of the tax abatement each of the multi-million dollar data centers is getting from the city. That way the public can judge whether the foregone taxes are worth it in terms of investments made and jobs created. Right?

Sorry.

The Washington County tax assessor’s office has determined that the amount the Enterprise Zone property tax exemptions save each data center annually is confidential and exempt from disclosure.

So before everybody gets carried away celebrating LinkedIn’s new data center, and heralding all the other data centers taking advantage of Enterprise Zone tax breaks, a harder look at what’s being given away to all these companies, for not much in return, is in order, particularly given the state’s budget situation.

Maybe this is something the Our Oregon folks could look at now that they’re not so busy after the defeat of Measure 97.

A “Throw the Bums Out” Election? Not exactly.

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Despite all the current cultural and political turmoil, a lot less has changed with the election than you might think.

Nationally, after Tuesday’s election, despite Trump’s surprising win, Congressional delegations in most states in January will look pretty much almost exactly like they do now.

Similarly, in Oregon, despite the crushing defeat of Measure 97, backed by unions and Democrats, and Republican Dennis Richardson’s success in the Secretary of State race, the make-up of the next state Legislature will hardly change.

At the national level, races were competitive on Tuesday in only 40 of the 435 seats in the House, according to the non-partisan Cook Political Report. Many seats were so safe for one party or the other that there was only one candidate.

Some of that may be due to skillful gerrymandering of congressional districts, but it may also be due to the increasing tendency of people of a like mind congregating in the same geographies, the birds of a feather flock together trend.

Americans may say they prefer living in diverse communities, but the Pew Research Center says people don’t practice what they preach.

“Americans are increasingly sorted into think-alike communities that reflect not only their politics but their demographics,” Pew said in a January 2016 report.

That’s certainly true of Oregon.

The Republican Legislative Campaign Committee (RLCC), a state-oriented national organization that seeks to elect Republicans to state legislatures, identified the Oregon State Senate and House of Representatives as targets in the 2016 elections. You’d never know it.

Senate

A total of 16 seats out of the 30 in the State Senate were up for election in 2016. Of the 16 seats, Democrats fielded unopposed candidates in five and Republicans fielded unopposed candidates in two. In other words, voters really had no choice in almost half the seats.

Meanwhile, 4 incumbents—one Republican and three Democrats—didn’t run for re-election. Only one of those seats had competition between a Democrat and a Republican in the general election.

That meant there were only 9 Senate seats where there was competition between Republican and Democratic candidates. Incumbents won seven of those races. The other 2 seats were open races. In one case, Republican Senator Doug Whitsett decided unexpectedly to leave politics. In the other case, Democrat Senator Alan Bates died.

According to Ballotpedia, incumbents almost always win re-election in state legislative elections. Since 1972, except for one year, the win rate for incumbents hasn’t gone below 90 percent.

House

 All 60 seats in the Oregon House were up for election in 2016. Democrats fielded candidates unopposed by Republicans in one district and Republicans fielded candidates unopposed by Democrats in five districts. So voters really had no Republican vs. Democrat choice in 20 percent of the seats.

That meant only 24 House races involved competition between Republican and Democratic candidates. Incumbents who ran won every single one of their races. In the seven districts where no incumbent ran, the winner was from the same party in every case. No revolution there.

———

What does all this mean? In Oregon, there will be some new faces, but the ideological split will likely remain pretty much unchanged. Maybe that the more things change, the more they stay the same.

Democrats will still control both chambers of the Oregon Legislature. However, they lost their chance to pick up an extra seat in the House to secure the three-fifths majority necessary to potentially pass bills to raise taxes without Republican support.

With the defeat of Measure 97, that hobbles the Democrats’ ability to go it alone on taxation alternatives.

As Martha Stewart would say, that’s a good thing.

 

Economists endorsing Measure 97: not as good as it looks

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Yes on 97 aggressively trumpets that Measure 97 enjoys widespread support among economists.

To learn the reason for such support, I queried some of the economists identified as Measure 97 endorsers.

“Higher taxes on corporations are exactly what’s needed to spur equitable growth,” said Dr. Susan Feiner, professor of economics at the University of Southern Maine.

“No one likes paying taxes, but the State of Oregon needs revenue, and Measure 97 is a reasonable way to raise it,” said Anders Fremstad, Asst. Professor of Economics at Colorado State University.

 “…I spent my career at Portland State, where two decades of relentless cuts have resulted in declining quality in what we offer students…,” said Mary King, Professor Emerita, Economics Dept., Portland State University. “I have been thinking for years about how we could turn around our state, and invest in education the way that other states do.
After carefully reading all of the analyses of the measure, meeting with the authors of the studies to talk with them, and then with other economists, I am in complete support of Measure 97.”

“It is high time to address the widening income inequalities right across countries and the world at large,” said Muttukrishna Sarvananthan, Development Economist & Principal Researcher at the Point Pedro Institute of Development in Sri Lanka. “Tax policy is one tool that could help narrow the widening income gap across communities and countries; raising taxes on corporations is one such policy tool.”

All in all, Yes on 97 lists 89 economists as endorsers of Measure 97. The list includes economists affiliated with schools such as Rutgers University, University of California-Berkeley, Northeastern University, Howard University, Bowdoin College, the University of South Australia and Anadolu University in Turkey.

No question it’s a long list, but a couple things stand out.

One is that just 18 of the 89 economists cited as supporters of Measure 97 are from Oregon*.

For a tax measure that its backers say is widely supported, the limited number of economist endorsers from Oregon challenges that assertion.

Another thing that stands out is the clear, and disturbing, anti-capitalism bent of some of the economists.

One endorser, Michael Meeropol, Professor Emeritus of Economics at Western New England University, is the younger son of Ethel and Julius Rosenberg, who were convicted and executed on Jun 19, 1953 for passing secrets of the atomic bomb to the Soviet Union. Meeropol calls himself a “New Leftist” and is calling for “…a fundamental restructuring of neoliberal, globalized capitalism.”

“Whether you hold your nose and vote for Clinton and Kaine, decide to vote for Green Party Candidate Jill Stein, or sit out the election entirely, don’t accept that you are voting for a “progressive” unless you are voting for someone whose program at least seeks to restructure, if not destroy, today’s rapacious capitalism,” Meeropol says in his blog.

Another endorser, Yan Liang, Associate Professor of Economics at Willamette University, is an active member of The Union for Radical Political Economics, which says its mission “…involves a continuing critique of both the capitalist system, and of all forms of exploitation and oppression” with a goal of constructing a “radical alternative to capitalism.”

Endorser Robert Pollin is Co-Director of the Political Economy Research Institute at University of Massachusetts-Amherst. The economics department of the university is known for its Marxist traditions and radical economics. Pollin is also a member of the Union of Radical Political Economics, which represents the nation’s Marxist economists.

Then there’s endorser Martin Hart-Landsberg, Professor Emeritus of Economics at Lewis & Clark College in Portland. “…it is capitalism (as a dynamic and exploitative system)…that must be challenged and overcome,” Hart-Landsberg wrote in Neoliberalism: Myths and Reality.

Maybe Yes on 97’s list of economists isn’t such a blessing to the campaign.

 

*Economists from Oregon supporting Measure 97

  1. Cliff Bekar, Professor and Chair of Economics at Lewis & Clark College
  2. Marty Hart-Landsberg, Professor Emeritus of Economics at Lewis and Clark College; Member of Workers’ Rights Board, Portland Jobs with Justice
  3. Justin Elardo, Instructor of Economics at Portland Community College
  4. David Ervin, Professor Emeritus of Environmental Management and Economics at Portland State University
  5. John Gallup, Assoc. Professor of Economics at Portland State University
  6. Mary King, Professor of Economics at Portland State University
  7. James Woods, Assist. Professor of Economics at Portland State University
  8. John Hall, Professor of Economics at Portland State University
  9. Jerry Gray, Professor of Economics at Willamette University
  10. Yan Liang, Assoc. Professor of Economics at Willamette University
  11. Cathleen Whiting, Assoc. Professor of Economics at Willamette  University
  12. Tabitha Knight, Assist. Professor of Economics at Willamette University
  13. Margaret Hallock, Professor Emerita of Economics at University of Oregon
  14. Gordon Lafer, Professor and Political Economist at University of Oregon
  15. Hassan Pirasteh, Professor Emeritus of Economics at Southern Oregon University
  16. Linda Wilcox Young, Professor of Economics at Southern Oregon University
  17. Kevin Furey, Instructor of Economics at Chemeketa Community College
  18. Denise Hare, Professor of Economics at Reed College

 

Measure 97 is just a Trojan horse for bigger government

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The cat’s out of the bag.

Now we know what the Democrats and their union allies want with Measure 97.

It’s not the measure as written, with its deceptive promises of more money for education, healthcare and senior services. It’s $6 billion more out of taxpayer’s pockets each biennium that the Democrats can use to grow government, cover their disastrous PERS decisions over the years, reward their friends and punish their enemies.

Rep. Mitch Greenlick (D-Portland), when endorsing the measure in late 2015, said it would eliminate much of the constant need to choose between funding critical budget concerns each legislative session. “If that passes, we’ll have a lot of money to pay for stuff,” Greenlick said.

Stuff, indeed.

Oregonians who support Measure 97 because they believe Democrats’ claims that the revenue would be committed to education, healthcare and senior services are going to be mighty disillusioned if the Measure passes because, the fact is, the Legislature will be able to do just about anything it pleases with the resulting revenue.

On Aug. 1, 2016, the nonpartisan Office of the Legislative Counsel confirmed this when it released an opinion. “Section 3 would not bind a future legislature in its spending decisions,” wrote Chief Legislative Counsel Dexter Johnson in the opinion. “If Measure 97 becomes law, the Legislative Assembly may appropriate revenues generated by the measure in any way it chooses.”

It turns out that the Democrat-controlled Legislature could even change how the revenue is raised. Some people probably support Measure 97 now because they want to “put it to big business.” But there’s nothing to stop the Democrat-controlled Legislature from changing the entire tax formula, so long as it doesn’t result in more tax revenue, according to the Oct. 18 Portland Tribune. Only a simple majority of the Legislature would be required to approve changes in the formula, or anything else.

Sen. Mark Haas, D-Beaverton, Chairman of the Senate Finance and Revenue Committee, told the Tribune the Legislature can expect “a cavalcade of 10,000 lobbyists from every industry with valid stories about why their rates should be lower.”

And every one of those lobbyists will be expected to back up their pleas with campaign contributions, further exacerbating the already excessive role of money in Oregon politics.

A senior Democratic Legislator once defended Measure 97 as the best solution because there was no other option. Clearly, even the Democrats now believe that’s not the case.

“Yes on 97” campaign relying on socialist endorser

The Yes on 97 campaign is featuring Martin Hart-Landsberg, Professor Emeritus of Economics at Lewis & Clark College, in its advertisements, assuming that an economist will be a persuasive voice of authority to the general public.

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Martin Hart-Landsberg

Economists support Measure 97

But what does the public know about Hart-Landsberg? Here’s some background on his views.

     About Martin Hart-Landsberg

“…seriously if I hear (in his class) how capitalism is bad, socialism is good one more time I might vomit.”

“(Class) mainly focuses on how capitalism is bad and socialism is good. You don’t learn very much else.”

Rate my Professors at Lewis & Clark College

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“…it is capitalism (as a dynamic and exploitative system), rather than neoliberalism (as a set of policies), that must be challenged and overcome.”

“…therefore, as participants in the resistance, …we can illuminate the common capitalist roots of the problems we face and the importance of building movements committed to radical social transformation and (international) solidarity.”

Neoliberalism: Myths and Reality by Martin Hart-Landsberg

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“…capitalist globalization is largely responsible for creating or intensifying many of our most serious economic and social problems.”

“…even a “robust” capitalism is now an obstacle to human progress.”

From the Claw to the Lion: A Critical Look at Capitalist Globalization, by Martin Hart-        Landsberg

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“The major obstacle to development is capitalism itself, and our efforts must be directed towards advancing new visions of democratic and sustainable development.”

Challenging Neoliberal Myths: A Critical Look at the Mexican Experience by Martin Hart-Landsberg

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“If we want socialism for the twenty-first century, we need to understand why the ‘real’ socialisms of the last century so often ended in capitalism.”

Praise for “The contradictions of ‘real socialism’ by Martin Hart-Landsberg

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“For Hart-Landsberg and Burkett, a socialist program in China or elsewhere—which they identify with the confusionist formula of a “worker-community-centered economy”—must have little or no commerce with the corrupting evils of the world capitalist market.”

“Despite their professed Marxism, Hart-Landsberg and Burkett’s outlook amounts to a form of anarcho-populism.”

China’s “Market Reforms”: A Trotskyist Analysis, Workers Vanguard

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“…far from undermining the relevance of Marxism, the Chinese experience highlights its critical importance as a framework for understanding and overcoming the dynamics of contemporary capitalism.”

Thinking About China: Capitalism, Socialism and Class Struggle, By Paul Burkett and Martin Hart-Landsberg, Socialist Viewpoint

 

Enough said?