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Governor vetoes tax credit bill

Mitch Lies
Oregon Staff Writer

SALEM – Gov. Ted Kulongoski on Sept. 2 vetoed a bill that would have provided farmers a reprieve from Oregon’s high minimum wage. In the process, the governor upset Oregon farm representatives by refusing to meet with them to discuss the bill.

The bill – one of nine bills Kulongoski has vetoed from this legislative session – previously had been on a list of bills the governor said he intended to quash.

The bill passed both the House and Senate comfortably, although when it passed the Senate, lawmakers were not aware of the bill’s full revenue impact.

The Legislative Fiscal Office changed the revenue impact from less than $20 million for the four-year life of the bill to more than $220 million in the days between when it left the Senate and arrived in the House.

It passed the House 33-27 after passing the Senate 25-4.

Don Schellenberg, a government affairs assistant director for the Oregon Farm Bureau, said the bureau sent a letter to the governor offering to renegotiate the last two years of the four-year tax credit if it became clear after 2006 that its revenue impact was a burden to the state.

The governor did not respond to the letter, Schellenberg said, nor did he respond to repeated requests to meet with him.

Barry Bushue, president of the Oregon Farm Bureau, said Kulongoski even refused to meet with two Democratic lawmakers to discuss the bill.

“It was an important, high-profile bill with bipartisan support,” Bushue said. “I would have thought we should at least have had the opportunity to meet with him.

“We’re frustrated,” he said. “There doesn’t appear to be enough interest in the industry to even meet with us.”

Senate Bill 1083 would have provided farmers with a tax credit on the indexed portion of Oregon’s minimum wage, the amount between the $6.90 an hour minimum wage voters approved in 2002 and the current year’s minimum.

The minimum wage in Oregon is adjusted annually based on the consumer price index, an index of inflation that tracks the prices of a marketbasket of goods and services in urban areas.

Oregon’s minimum has increased under the index from $6.90 an hour in 2003 to $7.25 this year. It is the second highest minimum wage in the country after Washington’s $7.35 an hour minimum.

Washington’s minimum wage also is adjusted annually. No other state automatically adjusts its minimum wage.

Discrepancies over SB1083’s revenue impact arose when the Legislative Fiscal Office interpreted the tax credit to apply only to workers making minimum wage and only to the difference between the previous year’s minimum and the current year’s minimum. The fiscal office has since concluded the tax credit would have applied to all farmworkers and extend back to the difference between the current year’s minimum and $6.90.

The bill’s revenue impact was projected to rise dramatically as the indexed portion rose – topping off at $106 million for the six months the wage would have been in effect in the 2009-2010 fiscal year, when the wage is expected to climb to $7.85 an hour. The bill called for the tax credit to sunset Dec. 31, 2009.

Bushue said tax relief available in the bill was critical to farmers trying to compete against farmers in states paying more than $2 below what Oregon farmers must pay.

Mitch Lies is based in Salem. His e-mail address is mlies@capitalpress.com.



Page Updated: Thursday May 07, 2009 09:14 AM  Pacific

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