Measure 97 would cripple many home-grown family companies
Editorial Board video: No on Measure 97
For the first time since I founded Truitt Bros. Inc. in 1973 with my brother Peter, I am writing in opposition to a proposed law: Ballot Measure 97.
You may already be aware of the negative impact and ongoing burden that Measure 97 will place on Oregonians, including the fact that in taxing sales (not profits) it is a sales tax in disguise; the fact that according to nonpartisan economists, it would cause the loss of upwards of 38,000 private sector jobs in Oregon and the fact that the Legislature could spend this newfound treasure any way it chooses.
There are other factors that would directly impact a “C” corporation like Truitt Bros., which has paid substantial amounts of taxes over our 43 years here in Salem.
Here’s how:
We are a contract manufacturer, producing over 400 ready-to-eat meals annually for a number of branded food companies in the U.S. These meals are developed and produced in West Salem and at our plant in Kentucky.
Many of the ingredients and packaging materials for our products are produced by Oregon companies. As our suppliers increase their pricing to reflect the impact of Measure 97, this, together with other Oregon-supplied materials that they use, adds up and magnifies our total costs.
But here’s a difference: We cannot pass this cost on because our customer is typically a larger branded food company that is able to shift the business to other food processors similar to us, but located in other states, without significant minimum wage hikes and without a corporate sales tax like the proposed Measure 97.
Another potential blow is even if we were to be unprofitable and lose money in a year, this would not matter. We would still have to pay over $600,000 in extra taxes to the state.
There have been years when this new tax would be greater than our profit, which would have been a death sentence for our company.
This measure, if passed, would give our company the wrong incentive, resulting in unintended consequences. We would be motivated to reduce our Oregon sales, shifting the business to our other plant, so as to keep our sales under the $25 million bar that triggers this sales tax. This is entirely contrary to our goal of attracting new business, growing profitably and adding more employees.
So the sponsors of Measure 97 need to know that in their zeal to tax the “big bad corporations,” they would be crippling a lot of homegrown family companies like ours that have loved living and doing business here. I urge Oregon voters to consider the very real, punitive aspects of this measure.
David Truitt of Salem is president of Truitt Bros. Inc. He and his brother started their Salem company in 1973. Their 250 employees in West Salem help produce and ship meals to customers throughout the U.S. He can be reached at 503-362-3674.