The Legislature’s Democrats got at least part of it right early this week when they dropped plans to eliminate the charitable contributions deduction for top income Oregonians as a piece of their budget-balancing scheme. The earlier plan might have added money to the revenue pot; it surely would have hurt charities large and small across the state.
Sadly, lawmakers plan now to collect additional money from corporations rather than to take a serious stab at reforming the state’s Public Employees Retirement System’s pension obligations.
That latter move not only would add revenue to state coffers, it would dramatically reduce the drain on school districts, cities and other government entities now and in the future.
It’s easy for Democrats to go after business when they need more money, as we know. Corporations are, after all, faceless things, and one need only mention a company such as BP in some circles to make raising taxes on them sound darned good.
The rhetoric misses the point, however.
No matter how faceless, corporations are, after all, simply large groups of people, and if tax bills increase enough, they’ll respond as people would. They may well lay off workers or, even worse, move their business elsewhere.
Meanwhile, the Democrats’ PERS “reform” measure, which sailed through the Senate and awaits action in the House of Representatives, falls so short of the mark it’s hardly worthy of the title.
Moving payments owed by school districts and others down the road a few years does ease the immediate crisis for those districts. However it may increase what the districts owe overall, and that’s not good.
Perhaps worse, the Democrats’ PERS legislation relies heavily on a never-ending stock market boom to correct the retirement plan’s long-term funding problems. That’s a terribly unrealistic assumption, akin to buying a lottery ticket as a path to wealth.
Although Democrats have trimmed cost-of-living increases for retirees, they have done so too gradually to save much, we believe. And they’ve failed to address such things as the unrealistic assumption of perpetual 8 percent growth in annuity calculations.
Like it or not, Democrats need to recognize the damage their failure to make serious changes to PERS will do over time. They got the message where charities are concerned, but so far they’ve been deaf to the rest of the story.