State Rep. Sal Esquivel will have a hand in shaping the Legislature's attempt at tax reform in the 2009 session, having been appointed last week to the Task Force on Comprehensive Revenue Restructuring.
"I hope that we lay out a plan that decreases taxes and gives tax cuts to working people and to those who own property because they pay about 90 percent of the taxes in the state of Oregon," the Medford Republican said in a telephone interview Sunday.
Charged with taking a deep look into the state's tax structure and developing a blueprint for a more diversified revenue stream, the 30-member panel was created through legislation that Esquivel co-sponsored along with a bipartisan coalition of lawmakers.
Esquivel said chief among the task force's challenges is to soften the volatility that plagues the state's budget process as well as relieving the tax burden lawmakers have foisted upon property owners to finance more than their fair share of state programs.
"If we go into this with our mind's set, then that's too bad," Esquivel said.
Among his suggestions: reduce the state personal income tax by 40 percent and substitute it with a statewide sales tax that could only be increased by voter approval.
Esquivel said under such a system, taxpayers in every income range could expect to pay the state less and a sales tax would tap the state's vast underground economy as well as tourists.
But before Oregonians will stand behind the plan, they will need assurances that they will not be duped by fast-talking politicians, he added.
"People in Oregon don't trust the Legislature, and they shouldn't because we haven't been good stewards of their money; so, therefore as long as the people have control of it, it could happen," Esquivel said of passing a sales tax, something voters have rejected nine times.
"If the trust isn't there, it isn't going to happen," Esquivel warned.
As for the traditionally anti-tax representatives on the task force, Esquivel said he hopes they too come to the table with an open mind.
"They are anti-tax, anti-tax, but have you heard any great ideas out of them of what to do?" Esquivel asked rhetorically. "We need to collectively figure out a better mouse trap because this mouse trap isn't working very well right now."
Also on the newly created task force is Brad Hicks, president of The Chamber of Medford/Jackson County, whom Esquivel recommended to the panel.
"He brings some great skills to the table," Esquivel said, noting Hicks' previous work as a legislative staffer and his longtime work with the local business community.
As for the Oregon Center for Public Policy's report last that the state's rainy-day fund will not provide a revenue cushion until at least June 2009, Esquivel said the state's new savings account is part of a long-range plan rather than an immediate cure-all.
"It beats the heck out of what we had, which was nothing," Esquivel said of the rainy-day fund in which lawmakers started earlier this year with $290 million that would have otherwise gone back to C-corporations in the form of tax rebates under the kicker law.
Charles Sheketoff, OCPP executive director and co-author of the rainy-day report, was also appointed to the task force as one of two taxpayer representatives.
Sheketoff said he hopes that the panel can help lawmakers identify some of the state's funding needs and help the state better prepare for recession.
"We have a structural deficit," he said. "We don't have enough money to meet the demands and wishes of Oregonians."
Retooling the state's corporate tax code so it's more "equitable" and eliminating the state's unique kicker law, in which most unanticipated revenues are returned to taxpayers, could provide the additional revenue that's needed for schools, infrastructure and health care programs, he said.
"One of the ways that we can protect ourselves for the downturn is to save the unanticipated revenues during good times," Sheketoff said.
As for a statewide sales tax: that is not the answer, he said. "It would only make our system more unfair than it already is."
covers the state Legislature for the Ashland Daily Tidings. Reach him at email@example.com.
Esquivel to shape tax reform in 2009 session