Corporate tax: Dueling PACs raise millions
Two groups campaigning on opposite sides of a ballot measure that would increase corporate taxes have raised millions of dollars ahead of the Nov. 8 election.
The proposed tax, called Measure 97, would create a 2.5 percent tax on sales exceeding $25 million for some corporations.
Our Oregon, the group supporting the tax, has raised $1.5 million so far. The money is from just two donations of $750,000 each by the Oregon Education Association and SEIU Local 503, the state's largest public sector unions.
The business-backed Defeat the Tax on Oregon Sales is campaigning against Measure 97, and has raised more than $5 million from nearly 800 donations. Most contributions are from corporations or their executives.
The campaigns are likely to spend heavily on television, radio and digital advertising.
Supporters of the measure say it would re-ignite investment in public schools, health care and senior services, all while allowing the state to tackle its other financial problems. Opponents say it would hurt businesses and curb private sector growth.
Gov. Kate Brown, a Democrat with longstanding ties to public sector labor groups, endorsed the measure last week.
Other officials have said Measure 97 could help avert a looming $1.4 billion budget deficit. The potential deficit is being driven by the cost of implementing the Affordable Care Act — also known as Obamacare — public pension costs and a higher demand for state services, among other reasons, officials said.
Corporate tax measure doesn't specify spending
Competing research reports have driven the debate on Measure 97's likely effects.
A report from the nonpartisan Legislative Revenue Office found the measure would raise $3 billion a year, but act as a regressive tax by increasing prices. The higher prices amount to an average per capita tax increase of $600 a year, mostly affecting low- and middle-income Oregonians, the report showed. The report also found that Measure 97 would slow private sector job growth while boosting public hiring.
Our Oregon refutes that research, and has published its own studies showing the tax would make large companies pay their fair share without increasing prices. Some large corporations have nationwide pricing, according to that research.
The Oregonian reported that Our Oregon staff pushed Portland State University economists hired to research Measure 97 to cast the tax in a favorable light. The PSU economists pushed back, records show, and the published report largely aligned with the Legislative Revenue Office research in saying Mesaure 97 would be regressive.
Attorneys for the Legislature also said a provision within Measure 97 allocating its revenue to schools, health care and seniors can be ignored by lawmakers. What's more, records show that tax revenue generated from the sale of gas and other auto-related commerce is dedicated to the state Highway Fund by the Oregon Constitution — a problem that would likely require lawmakers to amend Measure 97, should it pass.
The Our Oregon campaign said those issues may have to be decided in court, and that lawmakers who would spend against the will of the voters do so at their own risk.
Send questions, comments or news tips togfriedman2@statesmanjournal.com or 503-399-6653. Follow on Twitter@GordonRFriedman.