Tax Debate Gearing Up In Salem

Feb 13, 2017

The debate over whether to increase taxes on Oregon businesses is heating up this week at the state Capitol.

Paul Warner of the Legislative Revenue Office recently explained Oregon's ranking in a national business tax study members of the House Revenue Committee. He said state and local taxes paid directly by businesses are comparatively low to other states.

The panel will hear a variety of ideas about how to potentially adjust Oregon's corporate tax structure as lawmakers grapple with a $1.8 billion budget hole. One proposal introduced this week would even refer a corporate tax hike to voters in a special election this May.

A May vote is considered a long shot, since lawmakers would have to finalize the terms of the tax package within the next few weeks in order to get it on the ballot. It would also come just six months after voters defeated a different corporate tax proposal.

Outside the public eye, talks continue between business and union groups, as well as separately between Democrats and Republicans, on how the legislature should proceed. Those conversations come as lawmakers work to fill the gap between expected state revenues and the amount of money it would take to continue services at their current levels.

While program cuts are expected, advocacy groups want lawmakers to make up part of that shortfall with a corporate tax hike.

Not on the table are two tax hike proposals that were introduced and quickly shot down last week. One would have taxed coffee; the other would have imposed a fee on drivers of cars more than 20 years old. Neither would have raised a significant amount of money, and legislative leaders quickly pronounced the bills dead on arrival.

Both measures were rolled out under a legislative provision that allows lawmakers to introduce bills anonymously if they wish. Democratic House Speaker Tina Kotek said she doesn't know who requested the bills, but she's happy to see them consigned to the legislative trash bin.

"I don't want to get distracted by tax proposals like that," she said. "Those aren't bills we need to be spending time on, regardless of where they came from, because they're not solving the bigger problems here in the state."