3A
THE DAILY ASTORIAN • WEDNESDAY, FEBRUARY 14, 2018
State Senate works to reverse
budget impact of federal tax bill
By CLAIRE
WITHYCOMBE
Capital Bureau
SALEM — Two business
tax proposals aimed at tem-
pering the effects of federal
tax reform on Oregon’s budget
appear to be moving forward.
Both proposals would
change state tax policy in
response to the sweeping
changes to personal and busi-
ness taxes in the federal Tax
Cuts and Jobs Act signed into
law in December by President
Donald Trump.
Legislative
economists
project that the changes in the
federal law — if Oregon law
is static — could mean a $220
million hit to state revenues in
the two-year budget, a scenario
that some lawmakers are trying
to prevent during the 35-day
session.
The first of those bills eas-
ily passed the state Senate on
Tuesday, and the second is
expected to go before the Sen-
ate for a vote today.
Part of the federal law was
aimed at incentivizing multi-
national corporations to bring
back, or repatriate, income held
overseas for tax purposes.
The Senate passed a bill
Tuesday allowing the state to
collect taxes on those overseas
earnings. That means $140 mil-
lion in additional one-time tax
revenue, according to the Sen-
ate Democratic caucus. That
‘I can’t find a
scenario where we
have more winners
than losers on this.’
Anthony Smith
a lobbyist for the Oregon chapter of the National
Federation of Independent Business
sum would be put into the
state’s rainy day fund.
Some Senate Republicans
unsuccessfully proposed an
amendment that would have
sent the windfall to a proposed
fund to help pay down the
unfunded liability of the state’s
public pension system.
The second bill before sen-
ators this week concerns how
certain businesses are taxed.
The Senate is scheduled to vote
on whether to depart from fed-
eral changes on that issue today.
Owners of pass-through
businesses — such as partner-
ships, S-corporations, LLCs
and sole proprietorships — pay
taxes on business income on
their personal taxes, rather than
the business paying taxes.
The Tax Cuts and Jobs Act
allows owners of pass-through
businesses to deduct 20 percent
of that income on their federal
tax form.
While Oregon pass-through
businesses would still be able
to claim the 20 percent deduc-
tion on their federal taxes,
the bill before the Legislature
would eliminate that deduction
from state income taxes.
Anthony Smith, a lobbyist
for the Oregon chapter of the
National Federation of Inde-
pendent Business, says that the
bill will mean that the state’s
small businesses will pay $212
million more in taxes in 2018
than they would if the Legisla-
ture did nothing.
The bill also allows sole
proprietorships to qualify for
the state’s lower rates — if they
also met certain other qualifica-
tions — and increases the state
personal exemption credit,
which is money a taxpayer can
deduct for themselves and any
dependents.
But Smith maintains that
the increase in taxes due to the
loss of the deduction is greater
than the benefits for small
businesses.
“I can’t find a scenario
where we have more winners
than losers on this,” Smith said.
State Sen. Mark Hass,
D-Beaverton, said the move
will keep the state’s coffers in
balance and more fairly taxes
businesses.
“It feels like a very respon-
sible move for our state in light
of these changes,” Hass, the
chairman of the Senate Finance
and Revenue Committee, said
in a committee hearing last
week.
Jared Walczak, a senior pol-
icy analyst at the Tax Policy
Foundation, said in written tes-
timony to the Senate Finance
and Revenue Committee last
week that the case for eliminat-
ing the 20 percent pass-through
deduction was particularly
strong in Oregon, “where pass-
through businesses already
receive the advantage of a sep-
arate rate schedule.”
In 2013, the Legislature
passed a so-called “Grand Bar-
gain” that included lower tax
rates for certain pass-through
businesses. Some of those
changes would be repealed
in the bill up for a vote today
— for example, the bill would
disqualify certain industries,
including health care and pro-
fessional services.
Last week, Republicans on
the Senate Finance and Reve-
nue committee expressed con-
cern about moving on the bill
before the quarterly revenue
forecast Friday.
The Capital Bureau is a col-
laboration between EO Media
Group and Pamplin Media
Group.
SALEM — The state
House voted along party
lines Tuesday to ask voters to
amend the state constitution to
make access to cost-effective
and affordable health care the
right of all state residents.
The proposal now heads
to the Senate and, if passed,
would stand on the November
ballot.
All 35 Democrats in the
House voted for the mea-
sure, while the 25 Republicans
opposed it.
State Rep. Mitch Green-
lick, D-Portland, the bill’s
chief sponsor, said in light
of federal efforts to overturn
the Affordable Care Act, it is
important for Oregon voters to
weigh in on whether they want
health care to be accessible to
everyone.
The practical impact of cre-
ating such a right is open to
debate.
House Speaker Tina Kotek
and Majority Leader Jennifer
Williamson, both Democrats
from Portland, have said the
measure is primarily “aspira-
tional,” but some legal experts
say adding the right to the con-
stitution could spur litigation.
“There is always a possibil-
ity that the state could be sued
for failing to follow a consti-
tutional mandate, but we can-
not say whether such a suit
would be successful and, if
so, what the maximum extent
of the state’s liability would
be,” Legislative Counsel Dex-
ter Johnson wrote in a Mon-
day opinion requested by Rep.
Julie Parrish, R-West Linn.
It also is “impossible to say
whether the amendment would
create a financial liability for
the state” because the proposal
doesn’t specify how the state
must ensure every resident has
access to health care, John-
son wrote in a January opinion
requested by Greenlick.
“It is worth noting that the
proposed amendment does not
require the state to provide
health care to every resident,
but only to provide access to
health care that is effective,
medically appropriate and
affordable,” Johnson wrote.
The proposal raises the
question of how the state will
ensure that every resident has
access and how it will define
“cost effective” and “afford-
able,” said Bruce Howell, a
Portland-based health care
attorney and adjunct professor
at Salem’s Willamette Univer-
sity law school.
“The issue is going to be
Sturgeon season
possible this spring
Limited catch
considered
By LUKE WHITTAKER
Chinook Observer
A limited catch-and-keep
white sturgeon retention
season similar to last year
became possible following
a public meeting Friday in
Olympia, Washington.
The Washington Fish
and Wildlife Commis-
sion decided to encour-
age the state to begin
discussions
with
Ore-
gon fishery managers to
develop a limited retention
fishery in the Lower Colum-
bia River.
A presentation by Wash-
ington Department of Fish
and Wildlife staff showed
that the number of adult stur-
geon has increased in recent
years, while the number of
juvenile sturgeon has con-
tinued to decline, according
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Q: Why should
Jaime Valdez/Portland Tribune
I start good
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State Rep. Mitch Greenlick, D-Portland, is the chief sponsor
of a ballot referral to amend the state constitution to make
access to cost-effective and affordable health care a right.
how are we going to make that
work and what does that really
mean?” he said.
Oregonians who did not
have access to cost-effective
and affordable health care
could sue the state, he said.
In a letter to lawmakers this
month, the nonpartisan League
of Women Voters wrote that
universal health care needs to
be orchestrated at the national
level; otherwise, Oregon
would be responsible for all of
the cost.
“The state of Oregon has
insufficient income to support
its current responsibilities and
cannot provide the added cost
of health care coverage for
all its residents at this time,”
Warrenton reaches contract
agreement with employees
wrote Norman Turrill, the
league’s president.
message is clear: Practicing
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By KATIE
FRANKOWICZ
The Daily Astorian
After lengthy negotiations,
Warrenton and the union repre-
senting general city employees
have reached an agreement.
City Manager Linda Eng-
bretson is still negotiating con-
tracts with the police depart-
ment, however. Warrenton
police officer Tyler Johnston,
who is on the bargaining team,
spoke during a City Commis-
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to be able to move forward and
to continue to talk to the city
and to get closer to a position
that we believe is equitable to
all members of our bargaining
unit and for the city,” Johnston
said.
Engbretson reported sev-
eral highlights about the con-
tracts successfully negotiated,
including a 2 percent cost of
living adjustment and changes
in the Public Works Depart-
ment. Public works employ-
ees who are required to be on
call will see a slight increase
in what they are paid, and,
going forward, the department
will have the ability to provide
additional hours beyond its
usual working hours of 7 a.m.
to 3:30 p.m.
Mayor Henry Balensifer
thanked Engbretson for her
“dedicated hard work.”
“I think that we have made
to a press release from the
commission.
“We’re already ahead of
last year,” said Coho Char-
ters owner Butch Smith, cit-
ing an increasing number
of adult sturgeon measured
by fishery managers in Ore-
gon and Washington state.
“Hopefully, we’ll be getting
a new season announced.”
Fishery managers esti-
mate the population of legal-
size (38- to 54-inch) stur-
geon on the Columbia River
at around 199,000, an 18
percent increase from the
165,000 in May, according to
a joint staff report issued by
Washington state and Oregon
in January. The latest figures
support a trend of increasing
numbers since 2012, encour-
aging news for managers and
anglers. Still considered to be
an unhealthy total, the abun-
dance of adult spawner-sized
sturgeon has also increased
from 5,950 in 2016 to 10,400
in 2017.
WANTED
Ballot referral making
health care a right
passes state House
By PARIS ACHEN
Capital Bureau
Luke Whittaker/Chinook Observer
The sturgeon season last year was a boon for local
charter businesses.
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