Measures 66 and 67 FACTS: HOW THESE MEASURES EFFECT OREGONIANS AND K-12 EDUCATION

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

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

For 97.5% of Oregonians personal income taxes would not change (these are single people making less than $125,000, or couples making less than $250,000) How would personal income taxes be affected? 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? Source: Legislative Revenue Office Research Report #6-09, “Referendum 301 & 302 Revenue Measures,” Page 7, September 2009

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 million How would corporate income taxes be affected? Sources: HB 3405 and Legislative Revenue Office Research Report #6-09, “Referendum 301 & 302 Revenue Measures,” Page 12, September 2009

Two-thirds of corporations doing business in Oregon currently pay an annual minimum tax of just $10 How would corporate income taxes be affected? 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

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. 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? 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

Washington 5.5% California 4.6% Nevada 4.6% Idaho 4.7% Source: ” Total State and Local Business Taxes,” Council on State Taxation, Ernst & Young, 2009 Comparison

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? Source: ” Distribution of Formula Revenue to Districts,” Oregon Department of Education