Alert: Tax limit under attack

Watch out, Oregon homeowners. When the legislature meets starting in February, cities and some school districts will try to persuade lawmakers to refer a change in the property tax system to the voters, and this could cost you.

Local governments want to weaken the property tax limits that voters approved in 1990 as Measure 5. The change would be this: If voters approve so-called local-option tax levy, that tax would not count against the limit established by Measure 5. This would pretty much wipe out the protection against soaring taxes that Measure 5 was intended to provide.

As you may recall, that measure said property taxes for operations of local government, not counting bond issues, cannot total more than $15 per thousand dollars of real market value -- $5 per thousand for education and $10 per thousand for other local government. Voters can approve higher taxes in the form of local option levies or by creating new taxing districts, but the limits still apply on each individual property. So if additional levies are approved, tax rates have to be reduced to stay under the Measure 5 limits. The upshot is that many local option levies don't collect the amounts that the sponsoring agencies hoped.

In 2011, the League of Oregon Cities failed to get the legislature to refer an exemption for local option levies to the voters, and the league will try again in 2013. It will be joined by some Portland area school districts that also want more property tax money, the Portland Oregonian reports. With the new makeup of the legislature, the chances of success for this change have improved. Unless they want to go back to the bad old days of soaring property taxes driving people out of their homes, voters had better tell their legislators to fight this change. (hh)

Pick up those plastic bags!

This bag was dangling on a roadside bush on Albany's Bryant Way before it was recovered and disposed of in a trash can.

Hey, if you don't want the next Oregon legislature to ban the use of plastic grocery bags, quit throwing them around the countryside. Far too often we see plastic bags dangling in the bushes or being blown into ditches. This provides a handy argument for those who want the bags banned.

The last legislature narrowly rejected a statewide bag ban. But the next one likely will not show as much restraint. Dominated by Portland legislators and Democrats from other urban centers, you can expect the 2013 Salem session to renew the push for a statewide ban.

Portland and a few other cities including Corvallis have already acted on that front. The ban deprives grocery shoppers of a choice that many of them now make. Some of us prefer the plastic bags -- not all the time, but now and then -- because they come in handy at home. They serve all kinds of uses for storage and disposal.

Beyond that, the ban is accompanied by a government requirement that grocers charge a nickel per paper bag. This is an annoyance more than a big expense, but why should this be the subject of a law? If grocers want to charge us for bags, let them do so on their own. We will see what happens then.

In the meantime, we have reason to resent all those plastic bags fluttering in the wind and rain. If we see one and can do so, let's pick it up and throw it in the nearest trash. Each one left outdoors serves as a silent argument to go ahead with a statewide ban. (hh)

Stop taxing savings

The fiscal cliff might be less steep if Americans were not quite so dependent on the government in their old age. Of course, if we didn't need the government quite so much when we're old, the cliff might have not have arisen in the first place. Social Security and Medicare might be in far better shape, and the need for reforming these so-called entitlements would not be as urgent as it has become.

It's too late to fix this now and have an effect on the present. But what about the future? Congress could help the next generation of senior citizens by adding better logic to how the government treats savings, including savings for old age.

Now, if you are a diligent saver, the government collects income tax on interest earnings above a certain amount even if you do not take the money out. That's a good way to discourage people with good incomes from saving much at all. As for retirement savings, Congress allows you to put money aside before taxes are deducted. But then, once you pass 70 and a half, you have to take it out of that sheltered account and start paying taxes on the amount you take out. So the government forgoes tax revenue when people have income enough to save, but then taxes them when they're old and need their money much more. There ought to be a better way.

How about this: Exempt all savings. including earnings on money saved, from federal taxation. This also would let retirement savers keep all of their nest eggs. And it would make Americans less dependent on Social Security, which might make reasonable reforms in that program both less necessary and easier to reach. (hh)

From Ray Kopczynski: "But then, once you pass 70 and a half, you have to take it out of that sheltered account and start paying taxes on the amount you take out. So the government forgoes tax revenue when people have income enough to save, but then taxes them when they're old and need their money much more."
True enough, but I believe that is because, everything else being equal, your gross wages will be considerably less in retirement -- than before. Hence, you will be taxed at a lower rate. Personally, I do not think that is any kind of dis-incentive to "save."
"How about this: Exempt all savings. including earnings on money saved, from federal taxation. This also would let retirement savers keep all of their nest eggs. And it would make Americans less dependent on Social Security..."
The devil is in the details.  When you say "all savings," are you meaning your classic savings-accounts at lending institutions?  Or does that include any/all investment income?  Inheritance monies?  I honestly believe that if folks use a modicum of common sense, they would not (and should not) rely on (or be "dependent on") social security as sole means for their retirement years.

Weekend quick point: Love the library

(The noise in the background is a leaf blower in action on this Saturday afternoon. Brooms and rakes would make hardly any noise. Just pointing that out.)

Energy plan: What about price?

This is not what the Oregon energy plan has in mind, but it's a thought processor that uses no electricity at all. Super efficient!

Energy planning in the public sector is a great field to work in. You get to meet and discuss things and write reports and plans, drawing a paycheck every month, but you never actually have to produce any results. If you made a 10- or 20-year plan and it didn't pan out when the 10 or 20 years are up, nobody is going to come after you and want his money back.

Oregon Gov. John Kitzhaber has just appointed a new director of the state Department of Energy. That department and  the new director are being tasked with carrying out the 10-year Energy Action Plan the governor announced last summer. That plan calls for Oregon to reduce its use of fossil fuels, develop Oregon-based renewable energy sources, reduce emissions of so-called greenhouse gases, improve energy efficiency, create jobs and strengthen the economy.

To that end there is -- you guessed it! -- a task force. The task force has a leadership group and several so-called "design teams" to work on things like efficiency and demand management. One team is charged with "identifying achievable energy mix scenarios relative to existing state law," according to one account. So, lots of opportunities for consultants to be hired and studies to be written and eventually, maybe, law changes to be proposed.

Amazingly, nothing in the governor's energy plan so far says anything about keeping the cost and the price of electricity and fuel down. People in Oregon would be very interested in what they have to pay to heat their houses, keep their work place going and operate their cars. Wouldn't they? So they'd want the state to promote low-cost energy in all its forms. But according to the state plan, that is not what the state-paid energy planners actually do. (hh)

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