State tax reform issues remain unresolved

SALEM, Ore. – Whether a special legislative session on tax reform set for June will have any reforms to consider remained up in the air Thursday.

The Joint Tax Reform Committee, facing a deadline just a month away, weighed details of a wide-ranging menu of plans but reached no consensus on any of them. The panel set another meeting for May 11.

The 2003 Legislature created the committee and directed it to draft recommended legislation by May 31. A special session is to convene in the first week of June to consider any proposals.

Some Republicans are pushing a plan that would limit the growth of state spending and use unspent revenue above the limit to create a reserve fund.

Other committee members are pitching proposals to adopt a 5 percent sales tax to lower income and property taxes and to eliminate capital gains taxes and offset the revenue loss by raising income taxes on upper-income taxpayers.

Joe Gilliam, a grocery industry lobbyist who helped draft the spending cap plan, told lawmakers they should send the issue to voters this fall to keep the Legislature a step ahead of possibly tougher plans that might be put on the ballot in 2006 by citizen initiative petition.

Anti-tax advocate Russ Walker of Citizens for a Sound Economy said this week the group will step up efforts to put a tight spending limit on the ballot in 2006 if the Legislature doesn’t act.

But Lynn Lundquist, director of the Oregon Business Alliance, which backs creating a rainy day fund, said legislators shouldn’t rush something to the ballot “that hasn’t had time to mature” just to head off something else.

There’s resistance among Democrats to spending limits and also to holding a special session at all. They dislike plans by House Republicans to send a constitutional amendment banning gay marriage to voters in November.

Republicans run the House on a 35-25 count, but the Senate’s 15-15 partisan tie could make it difficult to pass anything there.

Republican Rep. Tom Butler of Ontario, House co-chairman of the tax committee, said the committee could move quickly in May once an agreement on a measure was reached.

But the Senate co-chairman, Democrat Ryan Deckert of Beaverton, said this week that the special session plan should be abandoned and the tax reform issue considered by the 2005 Legislature.

Legislators have never called a special session by passing a resolution, so their lawyers aren’t sure if or how they could call it off.