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In Our View: Pursuing Revenue

Catching license cheaters yields big bucks, but don't chase away Oregon shoppers

The Columbian
Published: December 15, 2009, 12:00am

Jim Moeller will try to lasso an escaped cash cow and Deb Wallace will chase a pipe dream when the Legislature convenes in Olympia next month. Such metaphorical mixture is necessary to describe a laudable effort by Moeller to reclaim a revenue source for the state, but a wasted effort by Wallace to gather sales tax revenue from Oregonians.

The two Vancouver Democratic legislators are operating under the best of intentions, and both have wide public support, but only one of these two cases offers any kind of real hope for progress.

Moeller has verifiable statistics to support his quest. Last year, the one-of-a-kind Vehicle License Task Force brought in $647,027 from residents who purchased state license plates. They had been targeted by the task force’s one state trooper and 10 volunteers for violating the law that requires state residents to purchase state plates. The task force cost $250,000 to operate, for a net gain of $400,000.

Lawmakers seemingly would lap up that kind of easy revenue as they wrestle with deficits, including the $9 billion shortfall in the previous legislative session. But, inexplicably, the task force was axed during the budget process. The only not-so-logical explanation might have been that the one trooper was needed on patrol to maximize law enforcement during tough budget times. But that argument was offset by the fact that budget cutters actually cut off a significant revenue source.

Moeller wisely wants to restore that task force. He estimates up to $1 million could be gathered annually once the effort gains full traction for more than just a year. “These folks are using our state’s services, but they’re not helping pay for them,” Moeller said in a written statement about the license plate cheaters. “We’re talking about our schools, our roads, and our public safety services that are paid for by the taxes the rest of us pay.”

If Moeller’s colleagues are smart, or if they’re just looking for some good campaign fodder, they’ll support his effort. Ultimately, we can envision task forces raking in new revenue in other areas close to sales-tax-free Oregon, such as the Tri-Cities.

Wallace, though, cannot support with verifiable statistics her quest to extract sales tax revenue from Oregon residents. Oh, she’ll get ample applause from constituents who grumble about being asked “Washington state resident?” by local cashiers. And the astute Wallace likely will serve up an estimate as to how much revenue could be gained: $500 million over 10 years, according to the Office of Financial Management. But that’s all it is, an estimate. And we wonder how reliable that estimate is when there’s no way of knowing how many Oregon residents will stop shopping here if they are forced to pay sales tax.

And that’s what has local merchants worried — the prospect of losing one Oregon customer by imposing a sales tax on Oregonians. The exemption was instituted in 1965 largely to help Washington retailers near Oregon compete with that state’s business climate. Denying businesses that competitive factor is not a wise move in recessionary times.

In most issues, Wallace serves her constituents well. But she’s been trying to remove the sales-tax exemption for Oregonians since 2005. Her efforts have fallen short because other lawmakers know that the revenue source and the loss of Oregon customers is pure speculation. Moeller’s plan, though, has demonstrable revenue working in its favor.

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