Oregon taxpayers may claim a credit against their state income tax obligations for each personal exemption on their state return. In 2005, the credit was $154 per person; the number is adjusted each year for inflation.
Measure 41 would remove the tax credit and replace it with a personal exemption similar to that for our federal income taxes: each Oregon taxpayer could deduct from Oregon income an amount equal to the taxpayer's federal exemptions. In 2005, this was $3,200 per personal and dependent exemption. The effect is to reduce the income tax of most taxpaying households by about $140 per person per year. The official estimate of fiscal impact on the state is to reduce state income tax revenue by about 6%, or about $386 million in fiscal year 2007-08.
The state can't print money to cover deficits. Anyone who proposes cutting state revenues by $386 million should propose $386 million of spending cuts to go with the tax reduction. Schools? Prisons? Parks? Unidentifiable "government waste"? Without knowing what spending cuts are tied to the tax cuts, we have only half the story. I am voting no on Measure 41.