Smith Secures $20 Billion Commitment for State Aid in Tax Relief Package
Oregon Likely to Receive $237 Million Over Eighteen Months
Washington, DC – Today, the Senate Finance Committee approved a $350 billion economic stimulus package providing Americans with much needed tax relief. During Committee consideration, Senator Gordon Smith (R-OR) was successful in securing a provision that will grant $20 billion in fiscal relief to the states.
"Oregon is facing a budget crisis compounded by high unemployment and a sputtering economy," Smith said. "Not only do we have to get businesses growing again, but we need to provide for those who have already been hurt by the downturn. The bill passed today will keep more money in the hands of Oregon families, create jobs, and put over $230 million in the state's coffers."
The $20 billion provision is modeled after legislation Senator Smith introduced with Senator John Rockefeller (D-WV) in January. The funds will be evenly divided between the Federal Medical Assistance Percentage (FMAP), which dictates the federal share of the Medicaid program, and direct monetary assistance to state and local governments. If this economic stimulus package is enacted, the Oregon Health Plan stands to receive more than $107 million over the next 18 months. In addition, Oregon state and local governments will receive over $130 million in direct aid.
Smith was also successful in passing an amendment that would make homes more affordable for 137,000 Oregon families by making mortgage insurance tax-deductible for the vast majority of homeowners. The amendment was identical to Smith's Mortgage Insurance Fairness Act (S. 846).
"Realizing the dream of homeownership is one of the greatest moments in a lifetime. It provides safety and stability not only to families but to entire communities," Smith said. "Over 12 million American homeowners are going to benefit from this deduction in the first year alone. Even more importantly, it's going to make it easier for families in the future to buy their first home."
Mortgage insurance is paid by most home buyers when a down payment of less than 20% is made. While mortgage interest is tax-deductible, insurance is not and often costs over $1000 annually. Smith's bill would make the insurance deductible for those whose incomes do not exceed $106,000 per year – making approximately 90% of Oregonians eligible.
The deduction will be of particular assistance to minority individuals and families as 57% of African-Americans and Hispanics who hold mortgages pay this insurance. In addition, 54% of loans made to borrowers below the median income level are covered by mortgage insurance. Estimates indicate that this deduction will help add 300,000 American families to the ranks of homeowners annually.
The mortgage insurance deduction is supported by a broad coalition including the National Urban League, National Taxpayers Union, National Education Association, Citizens Against Government Waste, National Conference of Black Mayors, and the National League of Cities.
