CORPORATE / INDIVIDUAL INCOME TAX BALLOT MEASURES ELECTION DATE: JANUARY 26, 2010 LEGISLATIVE REVENUE PACKAGE ‘FLASH CARD’ FACTS

Along with reducing the state budget, the 2009 Oregon Legislature passed two bills that would increase some corporate and personal income taxes. What is the revenue package? #1

These bills are expected to raise $733 million in revenue, which is included in the state budget to prevent further cuts to schools, healthcare and public safety. What is the revenue package? #2

Legislative actions taken to fill the projected state budget gap of $4.028 billion were: Budget Cuts$1.994 billion Federal Stimulus$978 million Additional State Revenue$801 million State Reserves$255 million What is the revenue package? #3 Source: Legislative Revenue Office Research Report #6-09, “Referendum 301 & 302 Revenue Measures,” Page 5, September 2009

The legislature has set a January 26, 2010 election date. A yes vote will confirm the legislature’s passage of the bills. A no vote will prevent the bills from becoming law. When is the vote? #4

For 97.5% of Oregonians – single people making less than $125,000, or couples making less than $250,000 – personal income taxes would not change. How would personal income taxes be affected? #5 Source: Legislative Revenue Office Research Report #6-09, “Referendum 301 & 302 Revenue Measures,” Page 12, September 2009

For individuals with annual incomes above $125,000 or couples with annual incomes above $250,000, it raises the state income tax rate by 1.8%-2.0% – but only on income above those amounts. How would personal income taxes be affected? #6 Source: Legislative Revenue Office Research Report #6-09, “Referendum 301 & 302 Revenue Measures,” Page 7, September 2009

1. Corporate Income Tax: Corporations would pay an additional 1.3% on profits over $250,000 in 2009 and That would be reduced to 1.0% in 2011 and Starting in 2013, the additional tax will be reduced to 1.0% on profits over $10,000,000. How would corporate income taxes be affected? #7 Sources: HB 3405 and Legislative Revenue Office Research Report #6-09, “Referendum 301 & 302 Revenue Measures,” Page 12, September 2009

2. Corporate Minimum Tax: Two-thirds of corporations doing business in Oregon now pay an annual minimum tax of $10. This bill would raise the corporate minimum tax to $150 for corporations with revenues of less than $500,000. Those with revenues of more than $500,000 would pay about one one-thousand th of their Oregon revenues in taxes. How would corporate income taxes be affected? #8 Sources: Oregon Corporate Excise and Income Tax”, 2008 Edition, Oregon Department of Revenue, pages 3-14 and Legislative Revenue Office Research Report #6-09, “Referendum 301 & 302 Revenue Measures,” Page 12, September 2009

Oregon’s business taxes are currently at 3.7% of gross state product, which ranks 3 rd lowest among the 50 states. If the revenue package would be affirmed by voters, Oregon’s corporate taxes would go up to 3.9% of gross state product, which would rank as 5 th lowest. How do Oregon’s business taxes compare? #9 Sources: ”Total State and Local Business Taxes,” Council on State Taxation, Ernst & Young, 2009 and Legislative Revenue Office Research Report #6-09, “Referendum 301 & 302 Revenue Measures,” Page 18, September 2009

By comparison, Washington’s corporate taxes are at 5.5% of gross state product, California and Nevada at 4.6%, and Idaho at 4.7%. How do Oregon’s corporate taxes compare? #10 Source: ” Total State and Local Business Taxes,” Council on State Taxation, Ernst & Young, 2009

Of the $733 million raised by the revenue package, about 40% – some $285 million – would be targeted for schools. This amount would be included in the $6.0 billion allocated to schools for What would this mean for Oregon’s schools? #11 Source: ” Distribution of Formula Revenue to Districts,” Oregon Department of Education

[Your information here] What would this mean for local schools? #12

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