Tax Breaks: Out of Control Growth

SHARE:

Here's a startling fact: Since 2009, the amount of money the state gives away in tax breaks -- many of which go to big corporations and the wealthy -- has increased by a whopping 29%. According to this year's projections, the state will give away $36 billion in tax breaks this budget cycle. That's a $3 billion increase from the previous budget cycle.

Even while Oregonians are facing overcrowded classrooms, shorter school years, and threats to basic healthcare for seniors, tax breaks have grown at an astronomical rate. While we've pointed to the unchecked growth before, the latest numbers were still more shocking -- as we learned that tax breaks have grown even faster than originally anticipated.

The New Numbers

After the Governor announced his recommended 2013-15 budget, we were interested in learning what new trends the figures might show. We plotted out proposed spending and revisited reports from the last budget cycle (to update our figures from 'approved spending' to 'actual spending.') 

At first glance, the Governor's proposed budget for the next two years may look like more money for K-12 schools. But when adjusted for inflation, it turns out that the proposed budget actually sends less funds to Oregon classrooms than the previous biennium.

In the meantime, you're not wrong to be completely distracted by the blue line on that chart instead of the red one.

Not only are tax expenditures still growing at a faster rate than school spending, but Oregon's tax expenditures cost significantly more last biennium than the state had budgeted.

When we first did our research during the last budget period, tax breaks were expected to cost the state $31 billion, a 12% increase from the biennium prior. Once the state collected data on how much those tax expenditures actually cost the state, it turns out the 2011-13 biennium tax breaks actually cost more than $33 billion, a total increase of more than 18% from the prior biennium.

An additional $2 billion -- poof, gone.

And as the Oregonian discovered, many of these tax breaks disproportionately benefit the wealthiest Oregonians.

These findings point to the deepening contrast of the choice we face. Will we move to rein in tax breaks for corporations and the richest Oregonians, or will we allow further budget cuts that hurt our students and middle-class families?

Fortunately, as session begins this week, some legislators appear ready to tackle the issue. House Speaker Tina Kotek told the Oregonian: "We see [addressing tax breaks] as one of the critical pieces of achieving a balanced budget and finding the dollars necessary for our schools... I think a lot of Oregonians support that."

We have an opportunity to address the budget crisis, and Oregonians are relying on legislators to make a decision about our priorities. Because whether they act to reform Oregon's tax giveaways or not, they will have made a choice that significant impacts Oregon's schools and other important programs.

Add comment

  • Web page addresses and e-mail addresses turn into links automatically.
  • Allowed HTML tags: <a> <em> <strong> <cite> <code> <ul> <ol> <li> <dl> <dt> <dd>
  • Lines and paragraphs break automatically.

More information about formatting options

Receive our daily news clips!

Email jenny@ouroregon.org to be added to our daily news clips list.