What is the REAL reason why Oregon's State Income and Corporate Tax rates are so high?

[leastprime]

Talked to my tax consultant.
We are going to get a Oregon Refund for 2019. I left Oregon in March 15 2019 and wife left in June 2018. Retired.
The income tax kickback is STUPID. The current fiscal year will be a disaster for the State of Oregon. And the next fiscal year could be even worse. PERS-T1 for 2020, is going to again hurt schools, municipalities, and services. Go to your local governments and see how much of the budget is devoted to Retirement funding of T1 past and present.
The excess funds state income, should entirely be held in reserve-bigger, rainy day fund.
Stupid Republicans think the People know better. LOL.

I'm going to spend my Oregon Refund in Washington by building up my reserve fund, buying groceries and buying equity.
Which was the same thing that we did in each of the previous Oregon kickbacks. Very little was spent within Oregon.
GL

[Larry Caldwell]

Tier 1 was established in the '70s, when everyone expected the post-war increase in incomes to continue. That was mistake 1. Mistake 2 was not funding the pensions when they were earned, on the expectation that everyone would be so rich that the pensions would be pocket change for the state. Twenty years later there was obviously a problem, so they canceled the 8% guaranteed return in 1996. That was still too expensive, so they shut down the whole PERS system in 2003, just paying pensions that had already been contracted for. That was still too expensive, so in 2013 they canceled COLAs except for a 2% cap on the smallest pensions. That's pretty much how things sit. There aren't too many ways they can screw the workers any harder.

They were popping champagne corks on PERS fund earnings until the stock market took a dump this year. Hopefully the feds will realize states are going broke and do some disaster relief, but I'm not holding my breath.

[ExNooYawk2]

As a former east coast resident, what I've seen in the 20 years spent out here is that the advantages both WA and OR have is they are not California. If you wish to live near the coast it is more feasible in OR or WA than it is in CA.

I haven't done much research on the state pension system but did notice something. We moved to CA in 2001 then to OR in 2006. We have very lovely neighbors. They were retired when we moved here; both retired teachers. They are still going strong, have a pretty nice house, a rig and travel a lot. They are both pretty healthy. While I don't begrudge them, I do wonder how the state can sustain such a lifestyle for retirees. They worked for 25 years and retired in their late 40s/early 50s.

Can the state really afford to fund maybe thirty to forty years of retirement for ex-public employees, I wonder?

[ccjarider]

Originally Posted by ExNooYawk2

Can the state really afford to fund maybe thirty to forty years of retirement for ex-public employees, I wonder?

Answer: NO

[Larry Caldwell]

Originally Posted by ExNooYawk2

As a former east coast resident, what I've seen in the 20 years spent out here is that the advantages both WA and OR have is they are not California. If you wish to live near the coast it is more feasible in OR or WA than it is in CA.

I haven't done much research on the state pension system but did notice something. We moved to CA in 2001 then to OR in 2006. We have very lovely neighbors. They were retired when we moved here; both retired teachers. They are still going strong, have a pretty nice house, a rig and travel a lot. They are both pretty healthy. While I don't begrudge them, I do wonder how the state can sustain such a lifestyle for retirees. They worked for 25 years and retired in their late 40s/early 50s.

Can the state really afford to fund maybe thirty to forty years of retirement for ex-public employees, I wonder?

The pension is nice. Tier 1 employees had 12% of their gross income placed in the pension plan until 2003. Half of that (6%) came from their paychecks, and half (6%) came from the state. The state didn't actually contribute anything. The whole budget kerfuffule is because they are having to pony up the bucks now that they welshed on in the past.

After 2003 there were no more pension contributions, and the state quit contributing anything. Essentially it's a mandated 6% employee contribution to a closed 401k. The money in the system belongs to the employees. They can take it in cash when they leave service, or convert to an annuity when they retire.

Your neighbor's situation might reflect a number of factors. First, half of their pensions come from their money that they contributed while working. The state pays nothing for that. Their money was invested in a dedicated fund by the state treasurer. The state has been borrowing heavily from that fund to balance their budget, but it is not the state's money and never was.

The state tried to pass a bond measure that would allow them to get some of the interest-free money the fed has been passing around, but the voters turned it down. Too bad. They have to pay Tier 1 retirees 8% for the money, but the anti-pension crowd campaigned against it and managed to block it. A bond issue would have substantially eased the state log jam, particularly since interest rates have been below the inflation rate for years.

With only 25 years of service, your neighbor's pension is probably around 50% of an average of their maximum 3 years pay. They're not getting rich on it, but with SS and savings they are probably doing fine. That's the traditional 3-legged stool of retirement. Pension and SS handle the monthly cash flow, but if the house needs a roof it has to come out of savings.

Remember that if you look at where the money came from, the state is only funding 25% of their working paycheck. The rest of it is their money and always was.

[redguard57]

Originally Posted by ExNooYawk2

As a former east coast resident, what I've seen in the 20 years spent out here is that the advantages both WA and OR have is they are not California. If you wish to live near the coast it is more feasible in OR or WA than it is in CA.

I haven't done much research on the state pension system but did notice something. We moved to CA in 2001 then to OR in 2006. We have very lovely neighbors. They were retired when we moved here; both retired teachers. They are still going strong, have a pretty nice house, a rig and travel a lot. They are both pretty healthy. While I don't begrudge them, I do wonder how the state can sustain such a lifestyle for retirees. They worked for 25 years and retired in their late 40s/early 50s.

Can the state really afford to fund maybe thirty to forty years of retirement for ex-public employees, I wonder?

The thinking back in the 70s, 80s, and early 90s was that you pay the teachers poorly, but make it up to them through the pension.



Which do you want, pay teachers better salaries, which means we'd need to pay maybe 10k a year more to all of them & cost hundreds of millions statewide? Or cut the pensions?