OPINION

Credit Westlund for his focus on tax reform
System depends too much on personal income tax

July 11, 2006

In his run for governor, Ben Westlund is pounding away at the topic that matters most: reforming Oregon's out-of-whack state-finance system.

Good for him. Democratic Gov. Ted Kulongoski and Republican challenger Ron Saxton ought to be talking about this, too.

Everything else depends on it: bringing Oregon's K-12 education system from mediocre to excellent. Reinvesting in universities so Oregon's young people can afford to stay here and businesses can hire workers from this state. Providing basic health care for our elderly, poor people and those with disabilities. Caring for prisoners and people with mental illness. Attracting new businesses and keeping those that are here.

Too often, Oregon's political process consists of arguing precisely how big a slice of the budget pie to cut for each of these important needs. Can't somebody step back and notice that the pie itself is in shambles? The ingredients are out of proportion! It's teetering so badly that it threatens to come smashing to the floor.

Because Oregon's tax system is indeed a mess. It depends way too much on personal income tax, so it swings wildly with the state of the economy. When times are hard and people are most likely to need state help, that's when state tax collections plunge. When times get good, tax collections soar and the state has to send money back as a kicker, even to out-of-state corporations.

A mishmash of citizen initiatives has only made things worse, shifting a greater share of the burden from corporations to individuals. A flawed spending cap, disguised as a rainy-day fund, likely will appear on November's ballot.

The state needs to redistribute its tax burden so that less falls on the shoulders of individual income-tax payers. And it must do something to smooth the boom-and-bust cycles that have whipsawed state services again and again.

Yet this is the time when it's most tempting to put off that discussion. The state's economic forecast looks good for the next few years.

So the conventional wisdom is: Why deal with something as complicated and politically risky as reforming the tax system? Especially when the words "sales tax" are likely to come up?

Credit Westlund with doing so anyway. He has put state tax reform at the center of his campaign.

And he's not even on the ballot yet. He still is collecting the final 7,900 signatures to qualify as an independent candidate for governor. But he already is leading the tax-and-spending discussion.