EXTRA”””Main Street Incentive Plan”
Taking the Capitol by Storm
The proposed “Oregon Stimulus Package” with its 15-20 year debt commitment, continues toward passage. Last week’s newsletter questioned the concept of borrowing $177 Million for short term jobs””including moss removal and rain gutters and light fixture installations””when Oregon faces a monstrous $739,000,000 revenue hole in the current budget’s remaining five months. Yesterday the Oregon Senate approved this well-intended long-term debt “Stimulus Package” (S.B. 338 and S. B. 5562 ) It is still possible to derail this untimely deepening of Oregon’s “pit of debt” if members of the Oregon House, by their vote will tell the leaders of the House, Senate and the Governor, “You cannot dig yourself out of this financial hole with debt as the shovel.”
Yet, it is not enough to merely vote NO to additional debt. We are in Session and the Legislature must address Oregon’s failing economy and the skyrocketing unemployment rate. There must be a better alternative than the pending debt-laden “Stimulus Package.” There is. As I write this article, the “Main Street Incentive Plan” is sweeping the chilly Capitol hallways like a warm beam of summer sunshine.
Today, 24 members of the House of Representatives joined in releasing the “Main Street Incentive Plan.” Main Street, if embraced by the Legislature and signed by the Governor, will promote immediate jobs in every Oregon community, without incurring government debt, without encumbering Oregon’s limited credit resources, and without committing future Oregon Legislatures to making debt payments for the next 15-20 years. [For a 2-minute video-overview of the Main Street Incentive Plan, Click Here.]
Main Street will encourage local businesses and homeowners to hire contractors and make improvements to their properties immediately by using their savings or other resources. Oregonians who make such investments in their properties will benefit by receiving a tax credit that will be spread out over five years. The Plan will limit the amount of the credit to 50% of property improvements costing $10,000 – $50,000 for homeowners and $25,000 – $500,000 for business owners.
The tax credits will be evenly distributed over a five-year period of time beginning after the construction projects are completed. To promote Oregon’s commitment to “green construction” and “green energy,” such projects (like solar or wind renewable energy alternatives), will enable property owners to claim 100% of the project’s cost””again, over a five-year period. Since the goal of the Main Street Incentive Plan is to create immediate jobs to jump start Oregon’s lagging construction industry, to qualify for the tax credit projects must begin before September 1, 2009.
MAIN STREET INCENTIVE PLAN HIGHLIGHTS:
“¢ These projects will create immediate local jobs in communities throughout Oregon, with no government money, and without “priority” for projects located in the districts represented by powerful legislators. Oregon property owners will determine where jobs are created, not politicians.
“¢ These projects will increase the value of residential and commercial property throughout the state, consequently increasing property tax revenue for local governments. (To the contrary, the proposed $177 Million debt-funded Stimulus Package makes improvements to buildings that are off the tax rolls.)
“¢ ALL of the money spent on Main Street will go directly toward labor and materials for property improvement projects. Since the state is not borrowing any money, no taxpayer dollars will be wasted on interest or be an encumbrance on future budgets. Additionally, taxpayer dollars will not be spent on the bureaucracy required to oversee the cumbersome bidding process, vendor preferences, and project completion targets outlined in S.B. 338 & 5562’s Oregon Stimulus Package.
“¢ Many local businesses will benefit and be able to grow upon completion of these projects. For example, a retail shopping center with a new parking lot would attract more customers; a hotel with remodeled rooms would attract more visitors. Even in these slow times businesses have improvements that, if undertaken, will create jobs and stimulate the economy.
“¢ In addition to benefits provided to property owners and local governments, the struggling financial sector would benefit as well. Property owners would be borrowing money — not the state — through banks (and oftentimes local banks) to finance their projects, providing even greater economic stimulus and more commerce.
COSTS vs. BENEFITS:
Senate Bills 338 & 5562, if enacted, will provide short-term jobs, with long-term debt obligations costing at least $17-20 Million per year””a large portion of the debt payments will go to paying interest, not economic stimulus. On the other hand, the Main Street Incentive Plan provides immediate benefits to Oregon homeowners, business owners, and jobs for Oregon workers, while the costs of the tax credits are spread out over five years. This “five year smoothing” means the eventual costs of Main Street are far outweighed by the following summary of benefits:
1) ALL of the money goes toward stimulus and job creation, increasing the economic value of dollars spent. NONE of the money is wasted on interest payments.
2) Jobs created through Main Street mean people will be earning income and, therefore, paying income taxes instead of drawing unemployment benefits. The amount of credits being claimed is directly related to the number of projects being done, and more projects means more jobs, more money flowing through all parts of Oregon’s economy, more money to pay for products, rent and mortgage payments””and fewer foreclosures for non-payment of loans.
3) The money goes toward long-term capital projects, not light bulb replacement or moss removal. Such projects will increase property values and, in turn, real property tax receipts, permits and SDC’s to help fund struggling cities and counties across the state.
In conclusion, I support the Main Street Incentive Plan. Although suggested by some Oregon House Republicans, but from the outset, it has been made clear to everyone”¦this is not a Republican bill. If it is good for Oregon””and I believe it is””it should be a bipartisan bill. Here is a chance for Oregon’s Legislators and House and Senate leaders to all take credit for a good bill. By jointly embracing, refining, promoting and passing the Main Street Incentive Plan, as Oregon Legislators (without caring about party affiliation), we can quickly do something to help Oregon’s economy and Oregon workers. This alternative stimulus plan accomplishes the good intentions of Senate Bills 338 and 5562, and does it without incurring the “poison pill” of additional long-term debt. The question remaining is whether or not sufficient humility exists here in the Capitol to allow what appears to be a good idea to get serious consideration by Oregon’s leaders.
If you would like to have your opinion heard on either or both of the proposed stimulus plans, click here for a list of Governor & Legislator Contact Information.
Sincerely,
Dennis Richardson
State Representative