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For several years, Oregon has faced an economic crunch. Schools, social services and public safety have all taken cuts. In a recent newsletter, Our Oregon, a nonprofit backed by public employee unions, highlights those cuts and points to an alternative: Tax breaks. Here’s what the newsletter says: The reason for this crisis is simple: As a state, we're not funding our schools at even an adequate level. And it's not that we don't have the resources, it's that we're choosing to give away the money through an ever-increasing list of tax breaks and loopholes. Even while state leaders have cut funding for our schools and other basic priorities, the amount of money the state is projected to give away through tax breaks increased by a whopping $3.4 billion. PolitiFact Oregon has looked a lot at budgets. We say this again and again, but technically the state budget as a whole is not shrinking. It’s actually up about $400 million this biennium over last. But that growth isn’t enough to keep up with inflation and other factors. That means, even with budget increases, the state still has to make service cuts. The state’s schools are seeing something similar happen. The State School Fund is up about $160 million this biennium over last and yet teachers are being laid off and class sizes are increasing. We’re also no stranger to the issue of tax breaks. Previously we looked into whether the state spends more on giveaways than it does on education, public safety and health care combined. The answer: Mostly True . Still, we wondered if lawmakers were really growing giveaways by the billions while cutting other programs. We pulled out our copy of the state’s 2011-13 Tax Expenditure Report and on Page 5 we found the numbers we needed. We figured Our Oregon was talking about this biennium compared to last -- by that measure, they were right. In the 2009-11 biennium, the state granted nearly $28 billion in tax breaks. This biennium, the total is expected to hit $31.4 billion. That’s the $3.4 billion -- or 12 percent -- increase Our Oregon mentioned. We confirmed with Our Oregon spokesman Scott Moore that those were the same numbers they looked at. Fact checks, though, are never that easy. We wondered why this increase was happening, especially, as Our Oregon pointed out, during a time when other things are being cut. We called the state’s economist Mark McMullen and asked him if he could explain some of the growth to us. A lot of these are just going to grow organically or just along with the economy, he said. Some of these are particularly big breaks, too. Say mortgage interest deductions or state income tax deductions. A good chunk also comes from the fact that Oregon is linked to the federal tax code. That is all to say that lawmakers can’t cut these areas as easily as they can other spending. That doesn’t mean they don’t try. During the 2011 session, about 20 tax credits were set to expire and lawmakers opted to renew half of them -- or about $10 million worth. This is part of a recently instituted, six-year cycle in which all credits will get reviewed before being renewed. We asked Moore whether he thought the group’s newsletter might have pointed that out. The sunsetting of the tax breaks that they embarked on in the last session is a good start, he said. It's wonderful that they're doing that ... but right now that only applies to tax credits. What’s more, he said, whether the growth happens with or without an explicit vote, the problem remains. We are automatically giving away money because we're connected to the federal tax code, he said. Rather than just throwing up their hands and just allowing us to be connected to the federal tax code (they should ask) ‘Does this make sense for the state of Oregon?’ Our Oregon said in a newsletter that the state is projected to give away $3.4 billion more in tax breaks this biennium than the last, even as lawmakers make cuts in education and other programs. Education budgets have definitely seen service cuts -- though the actual state education budget has grown. Our Oregon’s math is right, but we think it’s important context that the increase isn’t all a result of legislators passing new giveaways and that other budgets haven’t shrunk so much as failed to keep up with growth. We rate this claim Mostly True.
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