PUBLIC HEARING:

SB 25, SB 24, SB 394, SB 325

 

TAPES 73 A-B, 74 A

 

SENATE REVENUE COMMITTEE

MARCH 22, 2005   8:30 AM   STATE CAPITOL BUILDING

 

Members Present:                  Senator Ryan Deckert, Chair

                                                Senator Rick Metsger

                                                Senator Floyd Prozanski

                                                Senator Charles Starr, Vice Chair

                       

Members Excused:                 Senator Gary George

 

Witnesses Present:                Kate Richardson, State Treasury

                                                Michael Parker, College Savings Network

                                                Bob Cassidy, Lane County

                                                Don Bishoff, Legislative Assistant to Sen. Bill Morrisette

                                                Sen. Ben Westlund, District 27

                                                Kaelyn Smith, former Central Oregon CC student

                                                Tammy Chappell, COCC student

                                                Rachel Nolin, COCC student

                                                Ryan Swearingen, Portland State University graduate student

                                                Shane Van Matre, Western Oregon University student, Redmond

                                                Linda Swearingen, Bridge to Hope Ministries, Redmond

                                               

Staff Present:                          Paul Warner, Legislative Revenue Officer

                                                Lizbeth Martin-Mahar, Economist

                                                Barbara Guardino, Committee Assistant

 

 

TAPE 73, SIDE A

005

Chair Deckert

Calls meeting to order at 8:35 a.m.

 

PUBLIC HEARING, SB 25

013

Lizbeth Martin-Mahar

Gives overview of SB 25 (EXHIBITS 1-2). Allows the Treasury Department the ability to accept donations for awarding scholarships, grants and other incentives to account owners and their beneficiaries. Excludes Oregon College Savings Network and Board from public contracting law. Date March 1, 2005 is an error.

 

PUBLIC HEARING, SB 34

025

Martin-Mahar

Gives overview of SB 34 (EXHIBITS 3-4). Deals with Oregon College Savings Account. Doubles the annual cap amount that a taxpayer can claim as an Oregon tax subtraction for their contributions to the Oregon college savings account to $4,000 for joint tax returns and $2,000 for other tax returns.

 

080

Martin-Mahar

Will update numbers on chart on exhibit 3.

 

084

Vice Chair C. Starr

Asks for clarification on income deduction versus credit.

 

090

Martin-Mahar

Responds, The $2,000 is an income deduction, not a credit.

 

 

 

 

110

Michael Parker

Testifies in favor of SB 25. See written testimony paraphrased (EXHIBIT 5).

 

142

Parker

Notes improvements to the College Savings Network that the bill accomplishes:

1)      Allows the Network the authority to create scholarships, grants and other incentives with the goal of increasing awareness of and participation in the program.

2)      Aligns the Network and the College Savings Board with the remainder of the agency in relation to the public contracting code.

 

 

 

166

Sen. Metsger

Question concerning lines 25-26 in regard to accepting donations. Why is that needed?

 

173

Parker

Explains this section.

 

195

Kate Richardson

Oregon State Treasury sees SB 25 as an outreach to minorities.

 

208

Richardson

Begins testimony on SB 34 verbatim (EXHIBIT 6). Oregon ranks near the bottom of 26 states that offer a college deduction. A deduction of $2,000 per person is not only fair; it helps offset the rising cost of tuition and other college-related expenses. Oregonians would save more every year if the deduction were increased.

 

247

Parker

Answers Vice Chair Starr’s earlier questions on the basic mechanics of the bill. Research shows, the higher the deduction the higher the contribution. Nearly half of those eligible don’t claim the deduction.

 

284

Vice Chair C. Starr

Asks how this would affect grandparents who contribute to their grandchildren’s education accounts.

 

299

Richardson

They would only be able to claim $2,000 regardless of number of accounts. Removing the marriage penalty under this bill would increase that amount to $4,000.

 

307

Chair Deckert

Committee will look at credits and expenditures over the next two weeks. Will ask whether each bill helps those Oregonians who need the most help, and also how to offset proposed budget decreases.

 

319

Richardson

Treasurer understands the committee has tough choices to make.

 

324

Parker

If Oregonians decide not to use the money for education, they must pay the money back.

 

PUBLIC HEARING, SB 325

320

Martin-Mahar

Gives overview of bill (EXHIBITS 7, 8) Establishes a new corporate tax credit for an employer that pays all or a portion of the community college tuition of the company’s employees.

 

390

Don Bishoff

Testifies in favor of SB 325 on behalf of Sen. Bill Morrisette, District 6. SB 325 has bipartisan support. Questions the accuracy of the revenue impact statement.

 

422

Bob Cassidy

Testifies in favor of SB 325. See written testimony (EXHIBIT 9), Highlights of the Work to Learn Bill. Suspects many of the beneficiaries will be English as a Second Language (ESL) students. Small businesses and low-wage workers are difficult to reach. If this bill is not used, it will dissolve in four years; if it works, supporters will be back to request a renewal.

 

TAPE 74, SIDE A

045

Vice Chair C. Starr

Comments, the cost is for two years, not one year.

 

051

Cassidy

Admits it will be difficult to project the cost. For this reason, a sunset clause is necessary.

 

PUBLIC HEARING, SB 394 

058

Martin-Mahar

Gives overview of SB 394 (EXHIBIT 10) Establishes a new personal income tax credit for taxpayers who pay for community college or public or private college tuition.

 

086

Sen. Ben Westlund

Commends college students from his district who sponsored this bill.

 

093

Kaelyn Smith

Testifies in favor of SB 394. See written testimony (EXHIBIT 11) verbatim. Gives reason behind supporting this bill. It is designed for students who support themselves while going to school.

 

135

Tammy Chappell

Testifies in favor of bill. See written testimony (EXHIBIT 12) verbatim. Former methamphetamine addict who has gotten her life together. Bill would relieve pressure for her family and others in recovery.

 

161

Chair Deckert

Thanks Smith and Chappell for their inspirational stories.

 

169

Sen. Westlund

Believes these students have made the strongest case for this bill. It applies directly to the students who earn the money.

 

186

Chair Deckert

Was not aware other states provide this credit.

 

199

Rachel Nolin

Asks committee for support of SB 394. See written testimony (EXHIBIT 13) verbatim. State will reap greater benefits in the long-term. Ten years ago she attended community college for $500 per term for tuition and fees. This year it is over $1,000.

 

255

Chair Deckert

Asks if she receives the Oregon Opportunity Grant. A lot of full-time working students would qualify for it. Lawmakers are looking to expand it.

 

269

Ryan Swearingen

Testifies in favor of bill. See written testimony (EXHIBIT 14) verbatim. This bill encourages individuals in the workforce to further their education. Students must pay state taxes to receive this benefit.

 

329

Shane Van Matre

Testifies in favor of SB 394. See written testimony (EXHIBIT 15) verbatim. Works three jobs to pay his way through college. His parents can’t help him and he doesn’t want to rely on loans. Financial impact on the state is minimal. His education will result in a higher paying job.

 

397

Linda Swearingen

Gives background on how this bill was created in her political science class. This is truly a student-driven bill.

 

432

Vice Chair C. Starr

Commends the students for their work with this bill. It is a small contribution by the state and would be appropriate.

 

456

Sen. Prozanski

Concurs with Vice Chair Starr. Oregon’s lack of help to working students is a travesty. This will provide long-term payback.

 

TAPE 73, SIDE B

033

Sen. Metsger

Comments on bill, lines 6-7. The tax credit should be targeted toward occupational growth or a degree. Expresses concern the credit could be misused.

 

041

Sen. Westlund

Agrees. This is a self-selecting group of students who are dedicated enough to advance themselves professionally.

 

062

L. Swearingen

Suggests putting a reporting mechanism in the bill to review it next legislative session, and perhaps consider a sunset to see if abuses occur.

 

069

Sen. Westlund

Fiscal impact on the state is small.

 

076

Chair Deckert

Comments, he has to “be the bad guy” on tax credit bills. This bill impresses him, although the committee has to be careful in providing any tax cuts this session. However, the students have made a very compelling case that deserves consideration.

 

091

Chair Deckert

Closes public hearing on SB 394. Adjourns meeting at 9:35 a.m.

 

 

 

Tape Log Submitted by,

 

 

 

Barbara Guardino, Committee Assistant                                                      

 

Exhibit Summary:

1.      SB 25, Revenue Impact of Proposed Legislation, Martin-Mahar, 1 pp.

2.      SB 25, Staff Measure Summary, Martin-Mahar, 1 pp.

3.      SB 34, Revenue Impact of Proposed Legislation, Martin-Mahar, 1 pp.

4.      SB 34, Staff Measure Summary, Martin-Mahar, 1 pp.

5.      SB 25, College Savings Network, Testimony in Support of Senate Bill 25 Submitted to Senate Revenue Committee March 22, 2005 by Michael Parker, Executive Director, 2 pp.

6.      SB 34, State of Oregon Office of the State Treasurer, RE: Senate Bill 34, Richardson, 1 pp.

7.      SB 325, Staff Measure Summary, Martin-Mahar, 1 pp.

8.      SB 325, Revenue Impact of Proposed Legislation, Martin-Mahar, 1 pp.

9.      SB 325, Highlights of the Work to Learn Bill: S.B. 325, Cassidy, 1 pp.

10.  SB 394, Staff Measure Summary, Martin-Mahar, 1 pp.

11.  SB 394, Testimony Before the Senate Revenue in Support of SB 394, Submitted by Kaelyn M. Smith, March 22, 2005, 2 pp.

12.  SB 394, Testimony Before the Senate Revenue in Support of SB 394, Submitted by Tammy Chappell, March 22, 2005, 1 pp.

13.  SB 394, written testimony of Rachel Nolin, 1 pp.

14.  SB 394, Testimony Before the Senate Education and Workforce Committee in Support of SB 394, Submitted by Ryan Swearingen, March 9, 2005, 1 pp.

15.  SB 394, Testimony Before the Senate Revenue Committee in Support of SB 394, Submitted by Shane Van Matre, March 22, 2005, 2 pp.

16.  SB 394, submitted written testimony by Debie Griffith, Bend, March 22, 2005, 1 pp.