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    TAX INCREASES NOT NEEDED TO BALANCE BUDGET

    BY J.L. WILSON
    01/18/2002

    Summary: The Oregon Legislature needs to understand that citizens and businesses will suffer

    With Oregon's economy slumping to levels not seen in 20 years, any tax increases passed in the upcoming special session of the Legislature will serve only to slow Oregon's recovery, not fix its budget problems.

    Gov. John Kitzhaber outlined last week how deep cuts will be if no other revenue is identified. But tax increases aren't needed.

    Tapping small businesses and consumers for more taxes is counterproductive in this economy. Besides, funds already available to the state can fill most of the $830 million tax revenue shortfall.

    The organization I lead, the National Federation of Independent Businesses, serves more than 13,000 Oregon businesses, many struggling to maintain employment and survive the slump. Tax increases not only would further strain Oregon's Main Street businesses and their employees, but they also would add costs to Oregon consumers, whether or not they are employed.

    That's why NFIB joined with a group of other business associations to form the No New Taxes Alliance. The other associations are: Associated Builders and Contractors, Oregon Building Industry Association, Oregon Metals Industry Association, Oregon Neighborhood Stores Association, Independent Electrical Contractors of Oregon, Oregon Rental Housing Association and the Oregon Restaurant Association.

    In the midst of confronting Oregon's highest unemployment since July 1993, with consumers troubled and businesses facing layoffs and worse, now is the time to address immediate problems with resources on hand. Oregon lacks an official "rainy day" fund, but tapping reserves and making modest budget changes can cover the current deficit.

    Legislators and others have identified revenue options in recent announcements. These funds are already available, and they can be used to lower the threshold of pain in the budget cuts detailed by the governor. But more importantly, they eliminate the need for increased taxes.

    In presenting a list of cuts needed to balance the state budget without any revenue enhancements, Kitzhaber challenged Oregonians to engage in a "vigorous public debate over what kind of Oregon we want to have in the next 10 years."

    Such a debate is welcome. Yet the crisis atmosphere of a one-day budget-balancing special session is not the place to resolve Oregon's future.

    The opportunity to lead such a debate came much earlier in the governor's tenure, when Oregon's economy was booming and there was time for the public and the Legislature to consider a range of alternatives. It should be up to Kitzhaber's successor, who will take office next year, to help Oregonians look over the horizon.

    Vigorous debate requires time and thoughtful deliberation. Long-term decisions -- especially decisions about taxes and revenue -- should not be crafted in secret, shaped by election-year political games and rubber-stamped in a one-day special session.

    The governor and Legislature have a tough job in front of them. But quite simply, the budget needs to be balanced with the revenues available.

    Using other peoples' money to solve the state's budget woes is not the answer. J.L. Wilson is Oregon state director of the National Federation of Independent Business, which is the largest small business advocacy group in Oregon and the nation.

    On the Web: Russ Walker, director of Oregon Citizens for a Sound Economy, urges spending cuts and privatization of some state services, as well as policies more attractive to business development. See www.oregonlive.com/opinion.

    GRAPHIC: Graphic art by TIM BRINTON/NEWSART

    by J.L. WILSON on 1/18/02.