Summer is fast approaching, and while our kids are looking forward to their break, Oregon parents are nervous about September. If my legislative colleagues and I don't take bold steps to solve our perennial school funding woes, we could be looking at painful cuts to our K-12 schools, including more overcrowded classrooms, shorter school years, and cuts to programs that have been shown to help our kids graduate on time and ready to pursue their dreams.
As a mom with children in North Clackamas schools, I've seen firsthand what happens when our school budgets get slashed. Our campuses are still recovering from cuts made during the recession. During the 2011 school year, I remember my kids' constant reminders that they didn't have school the next day because of budget cuts. While it was frustrating and costly to arrange child care and adjust our schedules, by far the worst part was knowing my children were falling behind their peers in other states because Oregon wouldn't correct structural deficiencies in how we fund our schools. No one wants to return to that situation, but that is what is at stake right now.
There is a path forward. My colleagues in the House have put forward a proposal that represents a responsible balance of cost-cutting strategies and revenue reform that will strengthen support for our schools, from pre-K through college. The time to act is now, and we cannot accept a Band-Aid of a solution that forces us to revisit this problem again and again.
The cost-cutting proposals on the table are meant to provide both short-term and long-term savings. For the immediate future, the governor has implemented a hiring freeze. For savings further down the line, legislators are looking at steps that could include lower health care costs for public employees, changes to the pension system, and improved budgeting practices.
Public-safety reform is another area that I believe desperately needs to be addressed. We spend over a billion dollars on incarceration; we need to do a better job of shoring up our mental health and rehabilitation systems, so that we're locking up fewer people in the first place. By exploring smart reforms and implementing successful programs from across the country that focus on prevention and community rehabilitation, our state stands to save significantly, as well as help heal communities who have been disproportionately impacted.
Many have called for us to address labor costs that are rising faster than we can support. As we undertake that effort, we also need to be mindful of our ability to attract a competent and engaged workforce. While re-evaluating our budget and making sure our state is running as efficiently as possible will help, it won't solve the entire problem. It's time to finally address the major structural revenue problem our state has faced since the 1990s.
The recently released Oregon Education Investment Initiative is a proposal to replace our outdated corporate income-tax system with a short-form Commercial Activity Tax. While the details are in negotiations, the current proposal includes a small percentage tax (based on industry) for a business's sales in Oregon, and would only apply to businesses with Oregon sales greater than $3 million. This would generate more than $2 billion every two years, with a minimum of 75 percent dedicated to education. That would have tangible impacts, like reducing class sizes and restoring vocational and technical training programs, which have been shown to improve graduation rates and provide a return on investment for businesses.
This proposal is also good for entrepreneurs. Small businesses in Oregon with less than $3 million in sales would pay a flat tax of $250. Businesses with sales over $5 million would pay between 0.25 and 0.75 percent on their sales over that threshold. In addition, planning costs would be eliminated and annual taxes would be simple for businesses to compute. Furthermore, the state would save costs on the management of tax credits, which often go to those who have the most resources to advocate for their cause.
I support this proposal, not just as a mom who cares about her kids' future, but also as a business owner. Businesses rely on having an educated workforce to succeed, while Oregonians rely on an educational system that trains them for jobs of the future. The economic health of our state's businesses is directly tied to education investments and outcomes. Businesses and the educational community can be aligned more closely with priorities and see a direct correlation between investment and the production of a strong and capable workforce.
We can't continue to kick the can down the road only to revisit this problem again in two years. We owe more than that to our children and our communities. We owe them a brighter future where they can succeed.
Janelle Bynum is the state representative for House District 51, serving the communities of East Portland, Damascus, Gresham, Boring, N. Clackamas and Happy Valley.