Promises, promises

The promises started almost as soon as the votes were counted on Measures 66 and 67 in January 2010.

Oregon's political leaders pledged to tackle the core issue of tax reform, to avoid more short-term planning based on immediate economic difficulties.

They didn't deliver and two years later a union-backed group is pursuing ballot measures to put tax increases for businesses and wealthy households in front of voters again. It's time for broken promises on this subject to stop.

Gov. John Kitzhaber and other political leaders need to persuade the tax proponents, who received ballot titles on five measures last week, to back off. Then state leaders need to fulfill their promise to design a better system with the state's long-term economic health in mind.

If higher taxes on businesses and upper-income Oregonians could solve the state's economic problems, tax advocates wouldn't already be considering coming back to voters to ask for more. And even if another increase were the right economic answer, it would be politically foolish for Democrats to tie candidates to higher taxes in an election year with the economy still struggling.

The real problem is Oregon's tax structure, as then-Gov. Ted Kulongoski noted a day after voters approved the tax increases, which he supported.

"It's time to say 'enough' to budgeting from crisis to crisis," Kulongoski said. His preferred remedy was kicker reform.

We continue to support that idea. It's maddening that we find ourselves having to make that argument yet again.

Everyone knows the core problem. Oregon, without a sales tax, relies heavily on income taxes to pay for state services. When the economy is strong, money pours in. Oregonians become accustomed to the level of government services that can be afforded during times of prosperity. Then a recession hits, bringing more needs and less money.

The answer seems simple: When times are good, the state should save money for the recession that everyone knows will come one day. But Oregon's unique kicker law gets in the way. If income tax revenues for a biennium exceed state economists' projections by more than 2 percent, the entire surplus must be returned to taxpayers, leaving the state struggling to develop a meaningful rainy day fund.

True, kicker reform alone will not fix everything that ails Oregon's revenue problems, or cure school funding, or end the debate over state workers' compensation. It won't even address everything that's wrong with the state's tax structure.

But building a rainy day fund is an essential step toward stabilizing the state budget. And it is hard, if not impossible, to see that happening under the current kicker situation.

Voters must approve any change in the kicker law, and lawmakers often use that as an excuse to avoid even trying.

The last significant effort came in the 2011 Legislature. Sens. Frank Morse, R-Albany, and Ginny Burdick, D-Portland, led an attempt to create legislation to put a portion of kicker refunds into a rainy day fund. But amid disagreement over details, their efforts never left the Senate.

Kitzhaber, who supported Measures 66 and 67, agrees that Oregon needs a bipartisan effort to revamp the tax system, not another fight over a short-term patch. As Kitzhaber spokesman Tim Raphael told The Oregonian's Jeff Mapes last week, "He doesn't want to do this in a way that is divisive."

Seeking another tax increase now not only would be divisive, it also would be a step backward.

Raising income taxes actually makes the system more volatile. When the economy eventually improves, the Legislature will have a larger revenue stream to apportion. Then when the stream slows to a trickle again, the crash will be even more painful.

We can't afford to keep repeating that pattern. Short-term answers to long-term problems just make the state's problems last even longer.

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