Myths

(Based on latest data as of January 2005)

Oregonians pay higher taxes than people in other states.

Oregon is ranked 46^th nationally in combined state and local taxes as a percentage of personal income for state residents. (Only 5 states have lower overall taxes.) But we pay the third highest income taxes. Our low ranking overall is because we have no general sales tax. Our property taxes are average.

Property taxes are one of the largest sources of state government revenue.

All property taxes go directly to fund local government services and schools. The income tax is the largest source of state revenue.

Funding for schools comes mostly from property taxes and the lottery.

Income taxes now pay for more than half of school operating expenses. About 6% comes from the state lottery. Local revenues (mostly property tax) provide about 30% of school funding.

Oregon’s corporate taxes are high.

Oregon’s corporate tax burden ranks around the middle compared to all states. In most years it is below average. (We ranked 35^th in 2001-02.)

Oregon spends more on K-12 schools than most other states.

2003-04 National Education Association statistics rank Oregon 28^th out of 51 in per student spending. Oregon spent $7,587 per student for operating expenses compared to a national average of $8,208.

Oregon has no limit on state spending.

Oregon does have a spending limit. State law requires that state spending for general government purposes must be no greater than 8% of the total personal income of state residents.

Oregon taxes keep going up and up.

The dollar value of taxes has been going up along with inflation, population and income. As a percent of taxpayers’ personal incomes, state and local taxes have gone down, from over 12% in 1990 to under 10% today.

Most tax revenues are spent for welfare and other human services programs like the Oregon Health Plan.

58 % of state income taxes are spent for education, including K-12, community colleges and universities. 22% of state taxes are spent for human services, such as welfare and the Oregon Health Plan. 16% is used for public safety, including police and prisons.

With all the money Oregon gets from fees and charges, the gas tax, and the federal government, there should be plenty of money for schools.

The gas taxes, fees, charges and federal funds are dedicated revenues. While tuition charges and some federal funds are used for schools, dedicated revenues must be spent for specific programs. They cannot be shifted to another part of the budget.

Citizens cannot have an impact on how taxes are spent.

State and local budget information is public information. Citizens can and do have a say in how their taxes are spent. People can join organizations, contact government officials, testify at hearings and serve on citizen budget advisory committees.