in other words
may18
2017
Salem Report
By Brad Witt
Recently budget and rev-
enue leaders in the Oregon
House released a bold pro-
posal to invest in Oregon’s
education system, called the Education
Investment Initiative, and it is based on
the tax reform framework presented to
the Joint Tax Reform Committee. Ore-
gon is facing a $1.6 billion deficit for the
2017-19 biennium, which has forced this
discussion. It’s important to understand
why there is a need for tax reform and
why it focuses on the role of corporate
taxation in Oregon.
Underlying the current deficit is
a long-term, structural imbalance caused
by choices both legislators and voters
have made over many years, including
property tax reduction, pension obliga-
tions, mandatory prison sentences, and
declining corporate tax revenue. A ma-
jor turning point was approval of Ballot
Measure 5 in 1990, which shifted the
responsibility for funding K-12 schools
from local property taxes to the state
general fund. As a result, the income tax
became the primary funding source for
education, human services and public
safety.
In keeping with the Joint Tax
Reform Committee framework, the re-
structure would scrap Oregon’s corpo-
rate income tax system and replace it
with a new Commercial Activity Tax
of 0.95% on business sales in the state.
This rate would only apply to companies
with more than $5 million in Oregon
sales; those with less than that would
pay a flat $250. So why do we need to
focus attention on the corporate side of
the equation? Here are a few reasons
why the restructure must move in this
direction:
• 87% of the state general fund comes
from personal income taxes, while cor-
porations only pay about 5%, down from
18% in the mid-70s.
• Each year, fewer Oregon businesses
pay taxes. For instance, we have seen a
decline in C Corps from 35,500 in 1990
to about 30,000 today.
• A comprehensive analysis shows busi-
nesses pay the lowest state and local
taxes in the nation.
Another work group has been
meeting for more than two months to
also address the cost containment side
of the equation. There will be $400-600
million in targeted cuts in state expendi-
tures. There will also be $200 million
in tax relief for low and middle income
households. Taken together, this reform
package will raise more than $2 billion,
and a minimum of 75% of those new
funds would be dedicated to education.
Without bold action, Oregon is
facing years of painful cuts. The Edu-
cation Investment Initiative will allow
us to make strategic new investments in
our schools and support a strong equita-
ble economy for everyone. It will dedi-
cate billions to our schools, fulfilling the
promises we’ve made to the next genera-
tion. By investing in schools, we will
finally provide young Oregonians with
the education they and their future em-
ployers need to be successful. The Ini-
tiative will add weeks to the school year,
reduce class sizes, and allow districts to
restore vocational and technical training
that is so important to keeping students
in school. I feel that this package begins
the discussion that will put our state on a
path to fiscal stability for the first time in
decades.
Most of you know about the in-
crease in redemption fees on certain cans
and bottles purchased in Oregon, an in-
crease from 5 cents to 10 cents per item.
For those of us who regularly attempt to
return our cans and bottles to the local
grocery, we all know how frustrating this
can be, with long wait times, less than
clean facilities and angry yellow jackets
during warm weather. BottleDrop Cen-
ters, while much cleaner and easier to
use, have so far been just too far away
to make sense for most people in my dis-
trict. The move from 5 to 10 cents has
only exacerbated these problems. Well,
I am excited to tell you that things will
soon be looking up in Columbia County!
The Oregon BottleDrop Re-
demption Center (OBRC), a member-
owned cooperative that acts on behalf of
beverage distributors, plans to open 45
BottleDrop Centers statewide, and they
have identified four sites in Columbia
County as some of their very first loca-
tions. They are Clatskanie, St. Helens
and Scappoose. Called BottleDrop Ex-
press, the first one will be located at the
St. Helens Safeway store, and they hope
to have it up and running by the end
of June. There will also be one at the
IGA in St. Helens, the Clatskanie Safe-
way and the Scappoose Fred Meyer and
these should be operating by the end of
August.
Even more impressive is the fact
that you can bundle up your containers
and someone else will count them and
then credit you with the refund. Custom-
ers will sign up for BottleDrop accounts
at an in-store kiosk, buy green Bottle-
Drop bags inside the store (15 cents),
and drop bags full of containers into a
drop box where staff will count them
and credit your account with a refund
within 5 business days. OBRC will also
clean up and remodel the return areas
as needed so that the entire experience
will be much more user friendly. Here
is the OBRC website, https://www.bot-
tledropcenters.com/.
Housing has certainly become
a focal point for Oregonians in the last
couple of years, and it hasn’t just been
in the urban areas. The small towns in
my district have also seen vacancy rates
plunge. Most cities, both large and
small, have started to adjust their ordi-
nances to allow for “accessory dwelling
units,” or ADUs. Although this increas-
es density, it also allows some creativity
so that family members can share space,
or people can rent out a “tiny home” in
their back yard.
Recently we passed HB 3012A
that will also allow counties to permit
an ADU to be sited outside of the urban
growth boundary, if there is the pres-
ence of an historic home, defined as one
built between 1850 and 1945. In this
event, the process works backwards:
The historic home becomes the ADU
and the owner may build a new home.
The measure prohibits the subdivision
of the lot or parcel, which must be at
least two acres in size, and it limits mod-
ifications to the ADU. The bill is not in-
tended to circumvent land use laws, but
rather it is a creative way to provide ad-
ditional housing in rural areas.
Another bill of interest is HB
2162A, which requires a contractor,
who is awarded a state public improve-
ment contract worth at least $5 million,
to employ apprentices to perform 10%
of the work hours that those occupations
perform. Apprenticeship programs are
typically 2-5 years long, and they are a
natural segue for high school graduates
interested in technical and/or mechani-
cal careers who need to earn a living as
they learn a trade. In the face of an aging
workforce, this bill should help fill the
growing need for well trained, educated
workers.
HB 3158A authorizes the Or-
egon Fish and Wildlife Commission to
implement a program to encourage per-
sons to report violations of wildlife laws
by offering preference points toward
future hunting tags or cash rewards for
3
Publisher and Managing Editor
Scott Laird
503-367-0098
scott@vernoniasvoice.com
Contributors
Chip Bubl
Tobie Finzel
Karen Kain
Aaron Miller
Karen Miller
Shannon Romtvedt
Representative Brad Witt
Photography
Karen Kain
Scott Laird
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information leading to citations or arrest
for unlawful take, possession or waste
of wildlife species. Since 2012, there
have been an average of 764 incidents
of poaching, mostly for deer and elk,
but also big horn sheep and antelope.
In many instances, these animals were
killed and left for waste. The bill passed
unanimously and is now over in the Sen-
ate.
Finally, the Senate passed a bill
that gives Oregonians a means to protect
their personal privacy when it comes to
vehicle registration and insurance docu-
ments that they commonly carry in their
vehicles. SB 930 allows the registered
owner to black out or obscure the resi-
dence address, business address or mail-
ing address shown on these documents.
Thieves breaking into cars, stealing the
information and even the garage door
opener, then breaking into the driver’s
home, led the DMV to permit this altera-
tion. The bill is now in the Transporta-
tion Committee on which I sit, where I
expect it will be well received.
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