Posted: Thursday, January 14, 2010 9:00 AM
By STEVE ROBINSON
For the Capital Press
Our K-12 schools, our colleges and universities and our health care system are the seeds to a brighter future. But Oregon's ability to nurture those public investments is threatened by a state revenue drought, caused by the deepest recession in generations.
In confronting that fiscal emergency, Oregon lawmakers developed a balanced plan that called for significant cuts to the state budget. They also enacted modestly higher taxes on the richest Oregonians and corporations, which have been referred to Oregon voters as Measures 66 and 67.
Like all Oregonians, family farmers will be better off if voters approve Measures 66 and 67 in January. And like Oregonians generally, the vast majority of farmers will not pay higher taxes.
Those who say otherwise are trying to confuse and scare voters, not to explain the facts about the measures. And the fact is that 85 percent of all Oregon farming businesses will not see their taxes increase one penny. That's because 85 percent of Oregon farming businesses are sole proprietorships, which are not affected the measure that deals with business entities, Measure 67.
Of the remaining farms, the overwhelming majority are organized as partnerships, limited liability companies, limited liability partnerships or S-corporations. Those business entities will pay a flat $150 a year under Measure 67. That's right -- $150, period.
That leaves a miniscule number of farms that might be required to pay more than $150. Only C-corporations, unlike S-corporations, pay corporate income taxes on any profits they report. C-corporations can come in any size, but they tend to be larger than S-corporations, since an S-corporation can't have more than 100 shareholders and can't be listed on stock exchanges.
Then again, only C-corporations with significant profits or sales of over $500,000 a year in Oregon stand a real possibility of having to pay more than $150 a year in taxes. According to 2007 data from the Census of Agriculture, only 719 Oregon corporate farms reported sales of more than $500,000. That's less than 2 percent of all Oregon farms. Even some in that 2 percent wouldn't pay more than $150 under Measure 67 because they have out-of-state sales or they are S-corporations.
What about the changes in personal income taxes under Measure 66? Like all Oregonians, if a farm family doesn't make over a quarter-million dollars a year, they won't pay any more. If they are one of the lucky few families still doing quite well in this recession and clearing more than a quarter of a million dollars, they will be asked to pay a little more, but only on income exceeding $250,000. Only three out of 100 taxpayers will pay additional personal income taxes as a result of Measure 66.
All in all, the only effect most Oregon farmers will feel from Measures 66 and 67 is the economic benefit of a shorter recession and greater demand for their products than if the measures fail. Only a few -- those with high incomes -- will be asked to contribute a bit more to help Oregon's economic recovery.
They say that you reap what you sow. Voting "yes" on Measures 66 and 67 will allow Oregon to invest in its educational and health care systems and reap a brighter future.
Steve Robinson is a policy analyst at the Oregon Center for Public Policy, which does in-depth research and analysis on budget, tax and economic issues with the goal to improve decision making and generate more opportunities for all Oregonians.