Wednesday, May 10, 2017 The Nugget Newspaper, Sisters, Oregon
Red winged blackbirds...
25
The Nugget Newspaper Crossword
By Jacqueline E. Mathews, Tribune News Service
PHOTO BY JERRY BALDOCK
The birds are active in Sisters meadows.
Business tax plan faces
opposition from GOP
By Kristena Hansen
Associated Press
SALEM (AP) — Oregon
lawmakers rolled out a broad
plan to overhaul the state’s
corporate tax system Tuesday
that could net anywhere
between $288 million and $3
billion in extra funds for the
cash-strapped state over the
next two years.
The tax plan would
replace Oregon’s corporate
income tax — among the
nation’s lowest — with a tax
on businesses’ gross receipts,
or revenues from business-
to-business transactions for
things like equipment and
materials, beginning in 2018.
It’s a “mellow version,” as
one Democrat described the
proposal, of the voter-rejected
Measure 97 tax hike initia-
tive, which would have raised
$6 billion for the next two
years.
The highest estimate of
what the plan would raise,
about $3 billion, is roughly
equal to what the state says it
needs to keep operations run-
ning at current levels through
the next two years. It would
also help the state address
a $1.6 billion deficit that
could otherwise force cuts
to various public programs
and services, kick thousands
off Medicaid health plans
and scale back public-sector
employment and benefits.
But those estimates don’t
account for other propos-
als — including tax hikes on
tobacco products, moving
public-employee health plans
into coordinated care organi-
zations and statewide hiring
freezes — that are also being
eyed for the 2017-19 budget.
The potential savings from
spending cuts revealed last
month are still unclear.
Under the revenue-making
plan, low-income households
could also see their tax bur-
dens trimmed through things
like personal income tax cuts
or increases to the standard
deduction. Various exemp-
tions for certain business
dealings, such as donations
to nonprofits and transactions
with government or among
“closely related business
entities,” were also included
to help soften the impact
of higher consumer prices,
which state revenue officials
say would be inevitable.
Republicans in both cham-
bers, however, appeared ready
to double-down on their oppo-
sition. “No gross receipts tax,
period. Oregonians slammed
the doors shut on Measure
97 and they want to have a
conversation not on a hid-
den sales tax, but on reining
in out-of-control government
spending,” Senate Republican
Leader Ted Ferrioli said in a
statement.
The minority party’s
support for the proposal is
needed because without it,
the Legislature won’t have
the three-fifths, or 60 percent,
approval that any tax increase
needs. One way around that
requirement, however, is to
instead send the proposal to
voters for final approval in a
special election this fall. That
would require only a simple
majority.
Democratic Sen. Mark
Hass, who has helped lead
local tax reform efforts for
almost two years, said he
hopes this latest proposal
combined with other spend-
ing cuts could still make for a
convincing package.
The range of potential
tax rates, 0.25 percent to 1
percent, is more comparable
to other states and smaller
than the 2.5 percent outlined
in the labor union-backed
Measure 97. The lower gross
receipts tax rates would also
be applied broadly, affecting
more than 18,000 companies
with gross revenues over $1
million versus the 1,000 or
so wealthiest companies with
over $25 million in gross rev-
enues that were targeted in
the ballot measure.
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