Two of Oregon’s leading candidates for governor released portions of their last three years of tax returns this week, giving a snapshot of their personal finances that could inform their approach to governing the state and policy for all taxpayers.
Democrat Tina Kotek and her wife brought in about $100,000 a year and paid federal taxes of about 9%; Republican Christine Drazan and her husband, a law firm partner, had combined income that fluctuated from roughly $250,000 to $400,000 a year and paid federal taxes of about 20%.
Unaffiliated candidate Betsy Johnson, who refused to release her and her husband’s tax returns, is a millionaire with an extensive stock portfolio thanks to family inheritance whose income includes large but unspecified capital gains and dividends.
Kotek, the state’s former House speaker, released portions of her and wife Aimee Kotek Wilson’s state and federal tax returns from 2019 through 2021. Drazan, the former House Republican leader, released portions of her and husband Dan Drazan’s 2019 through 2021 federal tax returns. Willamette Week first reported on the gubernatorial candidates’ taxes on Wednesday.
Johnson, a former longtime Democratic state lawmaker, declined to release any portions of her tax returns. Her spokesperson Jennifer Sitton said in an email that the public has no stake in seeing how much income Johnson has earned, nor how much she paid in taxes. Sitton said the financial interest disclosures filed by all lawmakers, which list sources of income and property holdings but not dollar amounts or tax payments, is sufficient.
“That is the sum total of the public’s interest,” Sitton wrote. “Betsy believes that whether you are voting for governor or running for governor, you continue to have a constitutional right to privacy, which most people value.”
Oregon Republican and Democratic candidates for governor released some portion of their tax returns in the 2014, 2016 and 2018 elections. However, it does not appear that Democrat John Kitzhaber and Republican Chris Dudley released their most recent returns in 2010 and The Oregonian/OregonLive was unable to determine whether the top candidates did so in 2006 and 2002.
Johnson, who records show inherited more than $11 million from her mother and timber baron father starting in the 1980s, receives significant income from stock holdings and trust funds. As a result, Johnson and her husband, John Helm, could have more complicated income taxes than Drazan and Kotek, whose households mostly earn wages and business income.
With six-figure incomes, both Kotek and Drazan’s households earned more than most Oregon tax filers in recent years, according to Oregon Department of Revenue figures.
Kotek and her wife’s total annual income from their wages and small IRA distributions ranged from $100,000 in 2021 to $118,000 in 2020. During that period, Kotek and Kotek Wilson paid annual federal taxes ranging from $8,251 in 2021 to $11,661 in 2020, according to their returns. In 2020, that put them in the top 15% of Oregon tax filers, according to the Department of Revenue.
Drazan and husband Dan Drazan’s total annual income from her legislative wages and his business income as a partner at the law firm Dunn Carney ranged from $266,000 in 2020 to $383,000 in 2019. Their federal taxes ranged from $53,129 in 2020 to $82,768 in 2019. The Drazans have three children ages 15, 18 and 21, the eldest of whom is in college, and they claimed all three as dependents. In 2020, their income put them in the top 5% of Oregon filers, according to the state.
In addition to the legislative salaries that Johnson, Kotek and Drazan earned, all three also received the $151 daily per diem that all Oregon lawmakers receive to defray the cost of traveling to the Capitol during sessions and interim meetings, regardless of whether they spend it all on lodging, gas or meals. Under IRS rules, that money does not have to be reported as income and is therefore tax-free. Drazan nonetheless reported the per diems as income on her tax returns; Kotek left the per diem money off her tax returns, as allowed by the IRS.
In odd-numbered years, sessions last up to 160 days which would yield $24,160 in per diems and lawmakers meet in regular sessions up to 35 days in even-numbered years. The governor can also call lawmakers into special sessions, as Gov. Kate Brown did three times in 2020.
Johnson’s state-mandated financial interest disclosures from her most recent years in the state Senate show that she earned $1,000 or more annually from dividends and stock sales from each of 30 different blue-chip stocks she owned as of April 2021, the last time she was required to file a financial disclosure as a state lawmaker. Johnson, who has served in the Legislature for two decades, also listed “Elizabeth Johnson trusts” as a source of income. She received General Electric Co., Boeing and Weyerhaeuser stock as part of her inheritance more than three decades ago after her father died, according to public records. Her husband, Helm, owned or directed five businesses mostly focused on aviation services in 2021, including Transwestern Aviation, which Johnson founded decades ago with financial support from her father, former lawmaker Sam Johnson. His stock in the company, then called Transwestern Helicopters, passed to Betsy Johnson after he died and Transwestern Helicopters’ debt to Sam Johnson was forgiven, according to public records.
Johnson, Kotek and Drazan are now focusing full-time on their campaigns. Kotek and Drazan stepped down from the Legislature in early 2022 and Johnson resigned in late 2021.
In 2009, Johnson and Kotek voted for a law that increased Oregon’s top tax rate for individuals who earn above $125,000 and joint filers who earn above $250,000 as the state budget took a hit during the Great Recession. Drazan was not in the Legislature at the time.
During the 2013 special session, Kotek and Johnson both supported a broad “grand bargain” tax law that included a controversial tax cut for “pass through” business income from limited liability corporations, S corporations and partnerships that earners report on their personal tax returns. Drazan was not in the Legislature at the time and it’s unclear whether her husband has taken advantage of the lower tax rate, which is not applied automatically, since the Drazans did not release their state taxes. In 2013, critics of the “pass through” tax break pointed out it could yield big benefits for lawyers, doctors and other high-earning professionals and not just the manufacturers and other businesses its supporters said it would help.
Last year, Johnson and Drazan voted against a law that trimmed the pass through business tax break by cutting it off for businesses with more than $5 million in annual profits and tightening the employment requirements to qualify for it. Kotek voted to trim the tax break.
Also in 2021, Johnson and Drazan voted for a convoluted companion law that was aimed at helping large businesses — including some cut off from the pass through tax break — to reduce their federal taxes. Kotek voted against that law. Setting up the complex scheme, which entailed creating a new voluntary state tax for which payors would receive an equal value of tax credits, was expected to cost taxpayers $700,000 in personnel and other costs, The Oregonian/OregonLive reported.
Effective federal tax rates:
Drazan household:
2019: 21.6%
2020: 20%
2021: 19.3%
Kotek household:
2019: 9.1%
2020: 9.9%
2021: 8.3%
Johnson household:
2019: ?
2020: ?
2021: ?
-- Hillary Borrud; hborrud@oregonian.com; @hborrud
Subscribe to Oregonian/OregonLive newsletters and podcasts for the latest news and top stories.
Ad Choices