tax

Border Effect, Weed Edition

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The border effect, or the border tax effect, is a very real. Our office has previously written about it regarding sin/vice taxes, retail sales in the Gorge, and a broader look at Oregon-Washington taxes, including an academic paper I, along with my co-author Portland State Prof. Wooster, wrote on retail sales in Washington.

So it comes as no surprise that the different timing of legalized marijuana sales in Washington first and now Oregon also shows a clear border effect. Our friends and counterparts in Washington — the Washington State Economic and Revenue Forecast Council — is currently finalizing their latest forecast and included the following graph in their meeting materials. It highlights the drop in cannabis sales in Clark County (Vancouver) relative to the overall statewide trends. The steep drop in Clark County occurred in October 2015, right as recreational sales in Oregon went into effect. As the fine print on the slide says, prior to Oregon sales, Clark County accounted for 12% of Washington sales, but in January Clark County was just 7% of statewide sales.

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The graph brought to mind some very rough, preliminary work I did back in September regarding the border effect on Washington cannabis sales.  With the help of our counterparts, I threw county level sales data into a classic border tax effect model. The overall results were intuitive and make sense [1]. Washington border counties near Portland had a much higher level of sales than their demographic and economic fundamentals along would suggest. If you do the math, this quick and dirty estimate indicates that sales per adult in these border counties were 40-50% higher than otherwise expected.

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In reality, it turns out those were pretty decent estimates. In the months since Oregon recreational sales began, tax collections in the Washington border counties in and around Portland have fallen 35% (data here). These declines are seen in counties from the mouth of the Columbia River (Pacific County across from Astoria) through the Portland MSA and into into the Columbia River Gorge (Klickitat and Skamania Counties across from Cascade Locks, Hood River and The Dalles). At the same time, sales in the Seattle MSA are up 25%, with the rest of Washington increasing 12%. The border counties near Portland are the clear outlier and clearly impacted by the arrival of recreational marijuana sales in Oregon.

WaMJSalesChange

Overall these results are no surprise. The border effect is real and ongoing across the country. Oregon and Washington in particular provide such a natural experiment regarding tax policy and the fact that Oregon’s major population center is on the state border.

So far the border effect has been about where legal recreational sales have occurred. Now that both states allow for legalized sales, the research focus will shift to the actual impact of different tax rates on consumer behavior. Clearly, sales in Southwest Washington are lower post-Oregon sales, but depending upon product availability and consumer prices, how the balance of sales shakes out is still unknown. Oregon tax collections only began in January, so it will still be some time before we have enough data to draw solid conclusions.

[1] There are some issues with this simplified model. For one, it uses full FY2015 data. Given that sales were/are ramping up over time in a newly legalized world, it is not ideal to use a full year of data, or at least not until the phase in period is over. Also, it does not include any spatial impacts (spatial error correction or spatial autocorrelation) which is important when looking at county level sales, particularly given there are some “dry” counties where there are no retailers in Washington. Even so, the results of this basic model are both intuitive and provided pretty solid ballpark estimates.

For more click to continue on to https://oregoneconomicanalysis.com

Free Tax Help For Veterans

Still0216_00005SPRINGFIELD, Ore. — Local veterans are getting some help with their taxes this week at Liberty Tax.

The tax office is holding Military Appreciation Week. Any veteran, who’s a new customer at the tax office can get their taxes done this week for free.

Stephen Snyder is a Navy veteran and says he’s very grateful for this free help.

“It was truly a blessing and I encourage as a veteran, I encourage any veterans in the neighborhood or in the area to by all means stop by here and receive this service,” said Snyder.

Vets can get their tax returns done for free at any of the Liberty Tax locations in Eugene or Springfield. Military appreciation week ends on the 23rd of February.

Lane County To Propose Pot Tax

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EUGENE, Ore.– The vote to legalize marijuana in Oregon is just around the corner, and local governments are considering imposing a tax should Measure 91 pass in November. For the first time, Lane County commissioners will present their proposed ordinance.

They are calling for a county tax equal to 50% of the state tax rate under Measure 91.

Measure 91: $35 per ounce of flower buds, $10 per ounce of leaves, and $5 per ounce of immature plants.

Lane County Tax Proposal: $17.50 per ounce of flower buds, $5 per ounce of leaves, and $2.50 per ounce of immature plants.

Many voters are in favor of the potential revenue it will bring to Lane County.

“We are always looking for more money and it seems like an obvious place to get it. It’s a voluntary tax. You don’t have to smoke marijuana if you don’t want to, therefore, you’re voluntarily paying the tax. Tax it. Tax it heavy,” says Eugene resident Earl Dorman.

“I feel as long as the money goes to schools and safety, that’s fine. But not for administration,” adds Eugene resident Barbara Rodgers.

However, there is controversy surrounding what will be taxed. Measure 91 would only tax recreational marijuana, however, Lane County’s proposed tax would apply to both recreational and medical marijuana.

“Maybe the ones that are on medical can’t afford it anymore. If you’re doing it just for recreation then you can afford to pay,” said Rodgers.

Dorman adds, “For someone who truly needs it for medical, I’d be in favor of not taxing it, however I think there’s way too many medical marijuana cards out there for people who really don’t need it. So tax it all some and tax it heavier on the personal use.”

If Lane County’s tax is implemented, the tax would be in addition to state and city taxes, but there is a chance local taxes could go up in smoke. There’s a section in measure 91 banning counties and cities from imposing any fee or tax in connection with marijuana items. Local governments however are hopeful their taxes will be grandfathered in if they enact before election day.

The public is invited to Tuesday’s hearing at 9am at Harris Hall in Eugene.

Activists to Hold Tax Rally

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EUGENE, Ore. — Local activists will rally in front of the downtown post office on Tuesday, with the message that taxes should pay for human needs, not war.

Every year, local activists rally in front of the post office on tax day. They’re asking taxpayers where they think their tax dollars should be spent, and they set up something called a penny poll.

Organizers give each person ten pennies to drop into jars representing different budget categories. Those include human resources, physical resources, general government, military and paying down the debt.

Activists say each year, the results are consistent. About 50 percent of participants would like to see their tax dollars go toward human resources, compared to about 3 percent for the military. But the reality is the biggest chunk of your money, about 42 cents of every income tax dollar, goes to fund the military.

Activists believe that money should be redirected to local organizations like Sponsors, ShelterCare and Occupy Medical.

The rally is expected to be peaceful, with a group of about 50 activists. The penny poll begins at 11 a.m., followed by the rally at 12 p.m., where there will be music and speakers.

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May 13 – Evening Update

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The local headline update for Friday, May 13:

Tim Chuey: Mostly cloudy tonight with a slight (20%) chance of showers late, mostly cloudy Saturday AM, partly cloudy in the afternoon with a (40%) chance of showers (under 0.10 in. of rain possible), mostly cloudy with showers likely (60%) Saturday night (0.25 in. of rain possible).

Army Corp offering 1K reward for man seen taking pictures at Lookout Point Dam
Have you seen, or do you know this man? He was seen taking photos at night up at Lookout Point Dam.

Stats show spike in UO crime
Crime is spiking on the University of Oregon campus — that’s according to a three month report issued by the Department of Public Safety. But officials say those numbers shouldn’t be taken out of context.

Thief steals lung cancer survivor’s bike
A Springfield lung cancer survivor falls victim to brazen thieves and it’s all caught on video. Finding the bike may help others survive cancer.

Oregon House passes property tax deferral bill
The Oregon House has unanimously passed a bill that could make it tougher to live in a million-dollar house and still get the state to cover your property taxes.

Meth-related deaths up 22 percent in Oregon
The Oregon medical examiner’s office reports methamphetamine-related deaths rose 22 percent last year to claim 106 lives.

Deaths from meth in Oregon up 22%

April 18 – Evening Update

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Sunshine and blue skies to take us into the evening headlines:

Oregon medical marijuana reform bill hits snag
Three former Oregon state troopers are scrambling to keep alive a bill that would give police access to confidential lists of medical marijuana users and growers and make it harder for teenagers to use pot as medicine.

Bill to help Oregon foster kids in college struggles
People in both parties are sympathetic, but The Oregonian newspaper reports the bill is struggling because its price tag is $1 million.

County: Don’t illegally post signs
Lane County Public Works expects to see an increase of illegally placed signs for garage, estate and yard sales; home for sale signs, home occupations and everything else one can imagine.

Backup Duck QB pleads not guilty
The backup Duck quarterback accused of resisting arrest pleaded not guilty in court Monday afternoon.

Pro City Tax Rally Draws Attention to School Budget Cuts Impact
Advocates of the controversial City Income Tax measure kicked their campaign into high gear on Monday, less than a month away from the May 17th special election.

Junction City High School Celebrates 100 Years of Graduates
A hundred years ago, the first graduating class at Junction City High School had five students. To celebrate that history, the community unveiled a monument Monday morning.

Legalize, criminalize, idolize or hit it with round-up...medical marijuana is a divisive issue.

April 18 – Morning Headlines

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Monday morning local headlines:
Tim Chuey: Morning fog, then some drying for today and tomorrow.

Oregon bill would let illegal immigrants get driver’s licenses
Oregon lawmakers will hear from the public Monday about giving driver’s licenses to illegal immigrants, a proposal from Senator Chip Shields that’s certain to spark powerful emotions but unlikely to become law.

Outcry continues over new 4J Superintendent pay
Last Friday during a 4J public meeting new District Superintendent Sheldon Berman spoke about his new contract stating that he recognizes financial difficulties in 4J, but says the job will be a huge challenge. Meanwhile, 4J’s board of directors has said for some time that the position has been underpaid and that Berman was taking a substantial pay cut over his previous position ($276k) in Louisville, KY.  In addition to the reported $180k salary, the district will also pay $15,000 for his moving expenses, and an auto allowance of $550 a month. Some opponents of Bermans selection suggest it is a substantial increase as Berman was let go from his position in Louisville.

Theater company expanding
The Lord Leebrick Theatre Company has submitted renovation drawings to Eugene’s planning office for creating two stages in a building that the nonprofit troupe owns on Broadway downtown. But the show won’t go on until the performance group is able to meet its fundraising goals.

Debates planned over tax proposal
With the campaign over Eugene’s income tax for schools intensifying, supporters and opponents will square off in two debates before the end of the month. The first will take place Tuesday at the Eugene Rotary Club, followed by an April 29 debate at the City Club of Eugene.

Eugene man promotes “food security” & Northwest backyard friendly crops
With rising gas prices comes an impact on nearly every product we buy at the store, including food, and in an effort to help people save money.

Run for Autism raises thousands for Bridgeway House in Eugene
The charitable run held at Alton Baker Park raised thousands of dollars for the cause; a 13 year old girl who won a hundred dollars donated it all back.

Attempted kidnapping in Lowell, suspect search continues
A suspect search continues in Lowell after an attempted abduction of a 9-year-old boy on Saturday, April 16th, 2011.

March 16 – Morning Headlines

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Here are the local Wednesday morning headlines:

Tim Chuey Weather
The rainy weather will stick around, but without the high winds.
County to raze Extension building
The Lane County commissioners voted narrowly Tuesday to raze the building that formerly housed the Lane County Extension services this summer, opting to make more room for the county fairgrounds to expand its offerings.
Judge upholds city tax ballot title
The ballot measure for Eugene’s income tax for schools can be presented to voters in May without a word being changed, Lane County Circuit Judge Lauren Holland ruled Tuesday.
Barista describes robbery that turned into shooting
A Dutch Bros. barista testified Tuesday in Brandon Lee Plunk’s robbery and attempted murder trial, publicly describing for the first time what led the coffee worker to fatally shoot Plunk’s alleged accomplice during an armed robbery last Thanksgiving Eve.
Board gets first vote on Eugene bond issue
The board will vote on whether to refer a $70 million bond measure to the May 17 ballot. Thursday is the deadline for filing to place measures on the ballot.
Pair questions police encounter
Police say multiple issues led Agent Tom Schulke to question the men’s intentions on the afternoon of March 3. “The fact that Salmon and his roommate, Josh Kennedy, are black is not one of those reasons”.
Fred Meyer to adjust vets’ pay, pension benefits
The Oregon attorney general’s office and the state’s veterans affairs agency say Fred Meyer Stores has agreed to change some of its employment practices following complaints from veterans.

Eugene City Council Passes 4J’s Income Tax Hike to Voters Amid Questions

EUGENE- City Council members have voted to place income tax increases on this May’s ballot in order to make up for a huge budget shortfall in the Eugene 4J/Bethel school districts this year. Council members had asked an education subcommittee to gather consensus on whether raising local income taxes gradually over 6 years to help fix the gap.

Similar initiatives with a “make it temporary, a reasonable cost, and make sure money can only be used for intended purposes” formula have passed in recent years such as the progressive income tax and street repair bonds. Supporters of the 4J tax increase are hopeful that this will do the same.

The council voted 7-1, the dissenting vote raising the question of whether a local tax hike is like putting a Band-Aid on a severed limb, and whether trying to maneuver the bill into the legislature for state funding would be a better idea.

Eugene City Council Will Vote to Raise Income Tax

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photo by Tomash Devenishek

In the midst of a 28 million dollar budget shortfall, school closures, and furlough days, the Eugene City Council’s Subcommittee on Education has handed down recommendations for a six year income tax increase for Eugene residents.

The proposed measure, headed for this May’s ballot, will help bridge the gap left by this year’s budget shortfall. Ensuing revenue will be used to reduce, and possibly eliminate furlough days, while also trimming class size as much as possible.

Taxes raised would be split between 4J and Bethel districts according to how many students in the district live within city limits. Those districts will then be required to provide an annual report back to the City Council, justifying the revenue spent.

A review panel will be established by the districts to provide for oversight of the money. In turn, the City Council is asking each district how much revenue it will need to get the job done.

The tax would only reduce or suspend if Oregon State funding increases are able to meet the same goals for furlough days and class sizes, or if the increased local tax revenue affects the amount of State funding flowing into the districts.

The recently appointed Subcommittee on Education consists of representatives from the City Council, each school district, school advocates, and the business community, and was selected by Eugene Mayor Kitty Piercy at the request of the Eugene City Council.

Members of the subcommittee are:

1. Andrea Ortiz, City Council
2. George Brown, City Council
3. Craig Smith, 4J School Board
4. George Russell, 4J Superintendent
5. Alan Laisure, Bethel School Board
6. Colt Gill, Bethel Superintendent
7. Joy Marshall, Stand for Children
8. Hillary Johnson, School Advocate
9. Dave Hauser, Chamber of Commerce
10. John Barofsky, Business Representative

The city council will vote February 14 on whether to put the tax increase on the ballot for May 17.