3A
THE DAILY ASTORIAN • WEDNESDAY, DECEMBER 5, 2018
Tax hikes likely needed to fund Brown’s budget
A gap of
$2.6 billion
By CLAIRE
WITHYCOMBE
Capital Bureau
SALEM — Thousands of
Oregonians could see more
money taken out of their pay-
checks and companies would
be writing bigger checks to
fund Gov. Kate Brown’s pro-
posed budget and revamp the
state’s education system.
Brown needs to find $2.6
billion more than is already
being paid in state taxes to
cover her proposals for the
state’s next two-year budget.
It’s likely much of that sum
would come from corporate or
personal income tax increases.
Currently, individual tax-
payers are projected to pay
$19 billion in state income
taxes the next two years. And
corporations are projected to
pay another $1.1 billion.
The governor for the most
part has been quiet about
where she’s going to get the
new money. She has proposed
increasing a variety of taxes
other than income taxes, but
that gives her about one-third
of what she needs to cover her
proposed spending.
The details on who would
pay are yet to come.
“The governor will be
Anna Reed/Statesman Journal
Gov. Kate Brown needs more revenue to balance her pro-
posed state budget.
engaged in working with those
who will be proposing ideas,
which includes the business
community, Legislature and
other stakeholders across the
state,” said Chris Pair, Brown’s
communications director.
“It’s going to be a chal-
lenge,” the governor said last
week when she announced her
budget plan. “I don’t think it’s
going to be easy, but I do think
it’s work worth doing and
attempting to do.”
State House Speaker Tina
Kotek, D-Portland, said she
wants to raise “sustainable”
revenue for the education plan
through corporate or personal
income taxes.
“If we’re going to have
the resources we need, you
have to look at the big things,”
Kotek said.
Pushing tax increases
through the Legislature could
technically be easier for Dem-
ocrats, who now have a super-
majority of votes in the House
and Senate.
Kotek said that’s no guar-
antee that tax changes would
pass easily.
Critics already are pushing
back on the idea that Orego-
nians need to be taxed more.
State House Republi-
can Leader Carl Wilson, of
Grants Pass, called the gover-
nor’s budget a “call to drasti-
cally increase taxes on every-
day Oregonians.”
He noted the state already
is forecast to take in an extra
$1 billion in the next biennium
without changing tax rates.
The governor’s move to take
another $2 billion is a chal-
lenge, he said.
“It is a challenge to the wal-
lets and pocketbooks of hard-
working Oregonians,” Wilson
said.
Jason Williams, the exec-
utive director of the Taxpayer
Association of Oregon, also
was critical.
“No amount of tax reve-
nues” could fix what he called
a “leaky” budget.
While he said that the gov-
ernor’s plan to hire more inter-
nal auditors could help iden-
tify government waste, that
would only be effective if the
state cut wasteful programs.
The state has made minor
changes to income taxes in
recent years.
In 2017, these included a
new payroll tax to help pay
for transportation projects, and
changes to how certain corpo-
rations apportion income —
simply put, how they figure
out what they owe to Oregon
when they pay their taxes.
Brown’s budget already
includes $769 million in
increased taxes, largely the
result of a work group fig-
uring out how to cover the
state’s $623 million bill the
next biennium to cover Med-
icaid, the government health
care program for the poor
By DIRK VANDERHART
Oregon Public Broadcasting
Some of the largest compa-
nies operating in Oregon could
see a tax increase under a pro-
posal being quietly put forward
by Gov. Kate Brown.
Included in the two-year bal-
anced budget Brown unveiled
last week is a set of changes to
the state’s corporate minimum
tax, which sets a floor on taxes
paid by companies with sales in
Oregon.
Under the tax’s current
structure, businesses pay a
minimum of between $150 and
$100,000, depending on their
Oregon sales. (If they owe
more under Oregon’s separate
corporate income tax structure,
they pay that higher amount
instead.)
Brown’s proposal adds five
new steps to the minimum tax,
raising taxes for companies with
more than $200 million in Ore-
gon sales. For instance, com-
panies with between $400 mil-
lion and $600 million in sales
would pay $400,000 under
the minimum tax, instead of
$100,000 they’d pay under the
current structure. At the upper-
most tier, companies with sales
of $1 billion or more would
be required to pay $1 million
instead of $100,000.
The idea would need buy
in from the Legislature to
move forward, but it’s another
glimpse at strategies Brown —
newly re-elected and enjoying
Democratic supermajorities in
both legislative chambers — is
embracing as she pushes for bil-
lions in new money for schools
and health care in coming years.
And, like a proposed
increase in taxes on liquor, it’s
an idea Brown didn’t highlight
when she presented her budget
last week. The change is noted
only in passing in her nearly
500-page budget document.
Still, Brown’s not the only
one pushing a change in what
businesses pay.
“Raising the corporate min-
imum is on everyone’s radar
screen,” said state Sen. Mark
Hass, D-Beaverton, who chairs
the Senate Finance and Reve-
nue Committee. “There’s three
or four different ways to look at
reforming the way businesses
are taxed here, and at the same
time lowering some of the load
of the personal income tax.”
Hass also serves on the
Joint Committee for Student
Success, a bipartisan group of
lawmakers who’ve been vis-
iting school districts around
the state, and will float ideas
to sharply increase education
funding next year. Hass says
the committee will consider
changes to the minimum tax as
part of that process. He hadn’t
seen Brown’s proposal when
reached last week.
Minimum taxes are used a
lot in Oregon — nearly 70 per-
cent of Oregon C corporations
paid the minimum tax in 2015
— but according to Brown’s
budget, the proposed change
would result in a relatively
modest $31.3 million increase
next biennium. That’s about 3
percent of corporate taxes.
Ideas for altering the min-
imum tax structure are noth-
ing new. Two years ago, Bal-
lot Measure 97 would have
changed the tax to raise $3 bil-
lion in new revenue a year —
a far cry from what Brown has
suggested.
Measure 97 failed, but the
underlying notion remains
popular among progressive
groups. Juan Carlos Ordonez,
a spokesman for the Oregon
Center for Public Policy, said
changes to the corporate tax
structure “need to be at the
center of the conversation in
terms of revenue reform.”
It’s “great to see the gover-
nor propose raising the corpo-
rate minimum,” Ordonez said.
“But we need a much bigger
increase in order to reinvigo-
rate the corporate income tax.”
Under the $23.6 billion
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10TH STREET
Move needs
approval by
Legislature
nity together to find an alterna-
tive way to pay for health care
costs, instead of that cost shift-
ing to the general fund,” said
George Naughton, the state’s
chief financial officer.
Other minor tax increases
included in the budget includ-
ing a higher tax on hard liquor
and higher tax rates for small
business owners.
The Capital Bureau is a
collaboration of EO Media
Group, Pamplin Media Group
and Salem Reporter.
Consult a
ASTORIA
TRANSIT CENTER
Brown wants to boost state business tax
and disabled.
Health care is costing the
state more money — not
because the care itself is get-
ting more expensive, but
because the federal govern-
ment is covering less of the bill
than it used to.
A mix of tobacco and busi-
ness taxes would cover the
Medicaid cost, state officials
said.
“The governor has balanced
the budget by, in essence, get-
ting the health care commu-
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May bring back the tradition of
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this was a time honored
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