HOUSE SPECIAL SESSION COMMITTEE ON BUDGET RESTORATION

 

5th Special Session

 

 

September 8, 2002†† Hearing Room 343

5:00 P.M.Tapes 14 - 15

 

MEMBERS PRESENT:††††††††††† Rep. Ben Westlund, Chair

Rep. Alan Bates

Rep. Richard Devlin

Rep. Cedric Hayden

Rep. Betsy Johnson

Rep. Susan Morgan

Rep. Lane Shetterly

 

STAFF: ††††††††† ††††††††††† ††††††††††† Paul Warner, Administrator

††††††††††††††††††††††† ††††††††††† ††††††††††† Ken Rocco, Administrator

††††††††††††††††††††††† ††††††††††† ††††††††††† Gina Rumbaugh, Assistant

††††††††††††††††††††††† ††††††††††† ††††††††††† Larry Niswender, Legislative Fiscal

Lizbeth Martin-Mahar, Legislative Revenue

 

MEASURE/ISSUES HEARD:†††††††† Introduction to Committee Measures

††††††††††††††††††††††† ††††††††††††††††††††††† LC17 Public Hearing

††††††††††††††††††††††† ††††††††††† ††††††††††† *Bob Repine, Housing and Community Services, (HCS)

††††††††††††††††††††††† ††††††††††††††††††††††† LC 9095 Public Hearing

††††††††††††††††††††††† ††††††††††† ††††††††††† * Bob Cantine, Association of Oregon Counties, (AOC)

 

 

These minutes are in compliance with Senate and House Rules.Only text enclosed in quotation marks reports a speakerís exact words.For complete contents, please refer to the tapes.

 

TAPE/#

Speaker

Comments

TAPE 14, A

004

Chair Westlund

Calls the meeting to order. Opens work session to introduce Committee Measures

INTRODUCTION OF COMMITTEE MEASURES

023

Rep. Morgan

MOTION: Moves that LC 17 be introduced as a committee bill.

033

Rep. Devlin

Clarifies that his vote is to introduce the measure and should not be seen as either support or opposition.

 

 

VOTE: 7-0

040

Chair Westlund

Hearing no objection declares the motion CARRIED.

045

Rep. Morgan

MOTION: Moves that LC 9095 be introduced as a committee bill.

050

Rep. Devlin

Clarifies that his vote is to introduce the measure and should not be seen as either support or opposition.

 

 

VOTE 7-0

058

Chair Westlund

Hearing no objections, declares the motion CARRIED.

065

Chair Westlund

Closes the work session introduction of committee bills and opens a public hearing on LC 17.

LC 17 PUBLIC HEARING

70

Bob Repine

Director, (HCS). Asks for clarification on how much the proposed tax will raise.

82

Lizbeth Martin Mahar

LRO. Reviews the tax rates outlined by LC 17:

  • increases top two personal income tax rates for three years beginning in 2002 if approved by voters
  • for 2002 single filers with taxable incomes above $2,600 and less that $6,450, the 7 percent personal income tax rate increases to 7.3 percent
  • single filers with a taxable income above $6,450 the 9 percent personal income tax rate increases to 9.6 percent
  • to generate $395 million in 2002-2003, $305 million in 2003-2004 and $192 million in 2004-2005, for a total of $497 million in the 2003-2005 biennium.

Submits a table describing the breakdown of distribution of income tax returns in 2002, page two, (EXHIBIT A). Anticipates the measure will raise $277 million, most of which will be paid by those with taxable incomes over $100,000.

137

Rep. Shetterly

Requests that when the measure comes back in bill form, the committee be provided a table for 2003, as the Oregon refundable tax credit will be effective January 1 2003. Expresses interest in seeing how it plays with the adjustment in the rates.Comments on the preliminary staff measure summary. (EXHIBIT B). Notes a possible error in the table at the bottom that shows 9 percent for single filers, which should actually be joint filers.

150

Martin Mahar

Agrees to make the change. Says the measure imposes an overall tax increase of $175 on average for all tax returns. Explains that the reduction in the federal tax would result in an increase of $150 on average for all tax returns.

175

Rep. Bates

Asks what portion of the $395 million derives from the 3 percent increase on the 7 percent bracket. Asks staff to compute a corporate tax increase level that would give that same amount.

190

Rep. Devlin

Requests clarification of the term, total income.

195

Martin Mahar

Clarifies that the term total income is the federal adjusted gross income and does not include the credits.

220

Bob Repine

Asks for an explanation for the decline in the tax revenues collected in 2003-2005. Notes that the measure collects $305 million in the first year and $192 million the second half of the biennium. Asks if the $395 million is a larger number because it is retroactive to January 2002 through July 2003.

235

Martin Mahar

Outlines the fee schedule provided in the measure.

265

Rep. Shetterly

Asks if the 60/40 ratio is due to higher withholding and estimated tax payments coming in during the calendar year.

271

Martin Mahar

Confirms.

275

Chair Westlund

Closes the public hearing on LC 17 and opens a public hearing on ††††LC 9095.

LC 9095 PUBLIC HEARING

290

Larry Niswender

States that LC 9095 is a blank appropriation bill similar to those used in each of the sessions when there is a transfer of funds, changes in limitations, or general fund appropriations.

310

Chair Westlund

States that the work group is working to come up with a targeted cut list with greater or lesser degrees of success, as well as a general omnibus across the board allocation approach to the reduction packages.

369

Chair Westlund

Mentions that some things will be excluded from the allocation reductions, including anything that involves debt service, capitol projects, mandated service levels, either by the constitution or the courts, savings already received from delayed or phase in of new programs, anything that would incur an almost certain threat of legal action.States that the process will go hard on the unspent funds included in budgets, fairly lightly on the constitutional offices, and look delicately at anything that has federal funds.

430

Niswender

Clarifies the process was staff initiated during discussions of across- the-board cuts. States that several issues came up in the administration of this. Reiterates that the measure is a draft and a work in progress.

470

Bob Cantine

(AOC). Asks for a sense of what flexibility there is on the across-the-board cuts.

500

Chair Westlund

Replies the cuts must be made on a pro-rated basis, with the exception of the details listed earlier.

TAPE 15, A

058

Chair Westlund

Closes the public hearing on LC 9095. Recess the committee at the call of the chair.

 

 

Meeting is adjourned by implied consent

 

 

Transcribed By,††††††††††††††††††††††† Reviewed By,

 

 

 

Annastasia Suess,††††††††††††††††††††††† Marjorie Taylor,

Committee Assistant††††††††††††††††††††††† Committee Administrator

 

 

EXHIBIT SUMMARY

  1. Reference materials, staff, 4 pp.
  2. Draft LC 9095, staff, 2 pp.