Tax Breaks Soar While School Funding Falls

In this time of deep budget cuts across the state that are leading to larger class sizes and shorter school years (examples here and here and here), it seems fair to take a look at what priorities the Oregon Legislature spent money on during the last legislative session. It turns out that at the same time the Legislature was choosing to underfund Oregon’s schools, they were also increasing tax breaks to big corporations and the richest Oregonians.

Last year, the Legislature gave away a new tax break to big corporations to the tune of $93 million.  They additionally allowed Measure 66 to expire on January 1, 2012, leading to a tax cut for high-income households that will cost the state $118 million in just this first year alone.  Together, this amounted to $200 million more dollars in tax breaks across just one year.

It’s not a new trend. In recent years, tax breaks to corporations and the rich have soared while spending on schools has stalled.

In the chart below, over a decade of state spending on tax breaks and K12 schools are plotted. Leave aside for now the glaring gap in how much more the state gives away in tax breaks versus what it spends on schools and just take a look at the spending rate trend.

 
Total Tax Break source: State of Oregon Tax Expenditure Reports. Total State Spending source: Oregon Legislative Fiscal Office. Dotted lines indicate projected or approved spending when summative data is not yet available.

When we zoom in on the most recent five year spending period (2007-present), we find that total tax breaks grew at a +12% increase while school funding dropped by -5%.

 
Total Tax Break source: State of Oregon Tax Expenditure Reports. Total State Spending source: Oregon Legislative Fiscal Office. Dotted lines indicate projected or approved spending when summative data is not yet available.

5 Responses to “Tax Breaks Soar While School Funding Falls”

  1. Anonymous

    See my website, decisionmetrics.org, for much more detail about the growth of income tax expenditures in Oregon and its effect on General Fund spending.

    Reply
  2. Anonymous

    Your charts do not make sense. The first indicates 5 billion in total state education spending and 30 billion in tax breaks.

    Reply
  3. Anonymous

    Well if the people of OR don’t like this, why do they keep electing these people?

    Reply
  4. Anonymous

    Tax breaks are Exempted/Uncollected sources of revenues & which “the lion’s share” benefits corporations & the wealthy. If total state education spending is $5B…while a potential REVENUE income of $30B is being “given away”…you don’t need an economics degree to understand uncollected revenue (tax breaks) IF IT WERE COLLECTED…could VASTLY improve the state’s ability(ies) to fund education.

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