NORTHWEST
East Oregonian
Page 2A
Tuesday, March 22, 2016
Economist: Gross receipts plan ‘sales tax on steroids’
Economists refer to this
phenomenon as pyramiding and it
is one of the reasons some business
people at Potiowsky’s talk on
Thursday are worried about the
corporate tax initiative.
“It’s very easy to get a 10, 12,
even higher percentage added onto
the cost of building something
because of the way this thing is set
up,” said Neil O’Connor, director
of labor relations and a senior
project manager at Western Parti-
tions, Inc. in Tigard. O’Connor said
the company, a drywall and interior
¿nishes contractor, employees
roughly 500 people in Oregon and
“virtually all our ¿eld employees
are union members.”
Potiowsky has unique insight
into how Our Oregon’s proposed
tax initiative could affect the state’s
economy, because he worked on an
analysis of the potential economic
impact of the measure. Our Oregon
contracted with Portland State
University’s Northwest Economic
Research Center, of which Potio-
wsky is the director, to conduct the
analysis, The Portland Business
Journal reported last year.
Ben Unger, the executive
By HILLARY BORRUD
Capital Bureau
SALEM — The type of corpo-
rate tax proposed for a November
ballot initiative by the union-backed
group Our Oregon would be “like a
sales tax on steroids,” former state
economist Tom Potiowsky said
during a presentation this week.
Potiowsky made the comment in
response to an audience member’s
question about the tax initiative,
during an economic presentation
at a construction industry nonpro¿t
in Tigard Thursday. The type
of tax in question, known as a
gross receipts tax, is levied on the
company selling goods or services.
Our Oregon’s initiative would tax
certain corporations 2.5 percent on
their annual Oregon sales above
$25 million.
“In my attempt to be colorful
in explaining a gross receipts tax,
I said that it was like a sales tax
on steroids,” Potiowsky wrote in
an email on Friday. “That is, all
transactions (through the supply
chain) are assessed the tax, not just
the ¿nal transaction (sale) to the
customer.”
director of Our Oregon and the
initiative’s chief petitioner, has so
far declined to provide the ¿ndings
of the economic analysis. “I’m
not going to tell you what our
economic analysis found,” Unger
said in January. “I don’t think that
is all that relevant.”
Unger did not respond to
a request for comment Friday
regarding whether Our Oregon
would release the ¿ndings of the
analysis, and a spokeswoman
for the ballot measure campaign
declined to comment.
State Sen. Mark Hass, D-Bea-
verton, has been trying for months
to get labor unions, business inter-
ests and elected of¿cials to nego-
tiate an alternative to Our Oregon’s
initiative. Hass said he would like
to see Potiowsky’s ¿ndings on how
Our Oregon’s proposal could affect
the state’s economy. “He’s very
good,” Hass said of Potiowsky. “I’d
love to see his work on this.”
State economists in the Legisla-
tive Revenue Of¿ce are conducting
a similar economic impact analysis
for the corporate tax measure, but
the Legislature kept them busy
during the 35-day session that
ended earlier this month and they
have yet to complete the work.
The state economists might not
be ready to present their ¿ndings
until interim legislative meetings in
May, but Hass and other lawmakers
are lobbying for them to ¿nish the
work sooner.
“I’m trying to be respectful of
their time,” Hass said. “But they
know there’s some pressure to get
this out sooner rather than later.”
O’Connor, at Western Partitions,
Inc., said it could be dif¿cult for
construction companies to pass
the cost of the corporate tax on to
customers.
“We’re already struggling,
dealing with, dealing with
non-union competition,” O’Connor
said, and many Western Partitions,
Inc.’s competitors could avoid
the tax simply because they have
different corporate structures. “So
they all of a sudden gain a 2.5
percent advantage on us again,”
O’Connor said.
Since the company often bids on
projects a couple years in advance,
those prices are already set and the
company could not pass on the
cost of the tax to those customers
BRIEFLY
Federal regulators divvying up Oregon’s stored water
protected under the Endangered
Species Act, said Mary Anne Nash,
public policy counsel for the Oregon
Farm Bureau.
“It halted the process while they
did that work,” she said.
Under a biological opinion
completed in 2008, the amount of
water slated for irrigation is capped
at 95,000 acre feet, but the Oregon
Farm Bureau and other irrigator
groups hope to increase agriculture’s
share under the Army Corps’ alloca-
tion process.
Currently, irrigators in the Willa-
mette Valley have contracted with
the federal government to use 74,000
acre-feet of the water available.
It’s too early to tell how much
water will realistically be devoted to
irrigation under the allocation plan,
which is expected to be submitted
for approval by Congress in 2018,
said Nash.
Apart from the water supply,
growers must have the facilities to
convey it to their crops, she said.
“That’s been a missing piece for
quite a while.”
Due to the expense involved,
such infrastructure has largely been
built near the river systems on which
the dams are located, Nash said. The
longer-term goal is to irrigate farm-
land that’s further away from those
sources.
By MATEUSZ PERKOWSKI
EO Media Group
SALEM — Federal regulators
are again delving into the process
of dividing up roughly 1.6 million
acre-feet of water stored behind 13
dams in Oregon’s Willamette Valley.
Those dams, from Detroit to
Cottage Grove, perform Àood control
during the rainy winter months but
also hold water during the spring and
summer that’s designated for joint
use by irrigators, municipalities,
industries, recreationists and ¿sh.
Exactly how much water is
allocated for each use is currently
unde¿ned, but the U.S. Army Corps
of Engineers — which operates the
dams — is under an internal deadline
to ration it out by mid-2017.
The agency recently restarted
the earliest “scoping” phase of the
allocation process, which involves
collecting information from the
public on water needs.
Future irrigation demands calcu-
lated by the Oregon Water Resources
Department and Oregon Department
of Agriculture will be considered by
the Corps.
The process of allocating the
water was previously undertaken in
the 1990s but was postponed by a
“biological opinion” that analyzed
the impact of dams on several ¿sh
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Mostly cloudy and
breezy
Partly sunny
53° 38°
57° 43°
FRIDAY
Mostly cloudy and
breezy
A bit of morning
snow
Partly sunny
PENDLETON TEMPERATURE FORECAST
54° 33°
53° 39°
59° 38°
HERMISTON TEMPERATURE FORECAST
60° 39°
61° 45°
PENDLETON
through 3 p.m. yesterday
TEMPERATURE
HIGH
Yesterday
Normals
Records
LOW
60°
56°
78° (1915)
35°
36°
19° (1913)
PRECIPITATION
24 hours ending 3 p.m.
Month to date
Normal month to date
Year to date
Last year to date
Normal year to date
0.25"
1.15"
0.92"
3.52"
2.02"
3.47"
HERMISTON
through 3 p.m. yesterday
TEMPERATURE
HIGH
Yesterday
Normals
Records
LOW
59°
59°
78° (1934)
35°
35°
20° (1944)
PRECIPITATION
24 hours ending 3 p.m.
Month to date
Normal month to date
Year to date
Last year to date
Normal year to date
0.35"
0.98"
0.64"
2.47"
1.25"
2.91"
SUN AND MOON
Sunrise today
Sunset tonight
Moonrise today
Moonset today
Full
Last
Mar 23
Mar 31
New
Apr 7
61° 31°
59° 42°
62° 36°
Seattle
55/44
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6:54 a.m.
7:11 p.m.
6:41 p.m.
6:37 a.m.
First
Apr 13
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Today
Spokane
Wenatchee
49/35
58/38
Tacoma
Moses
56/41
Lake
Pullman
Aberdeen Olympia
Yakima 60/33
46/35
53/44
55/42
61/34
Longview
Kennewick Walla Walla
55/44
52/40 Lewiston
61/38
Astoria
53/37
53/44
Portland
Enterprise
Hermiston
57/43
Pendleton 43/30
The Dalles 60/39
53/38
58/39
La Grande
Salem
49/34
56/42
Albany
Corvallis 55/43
55/42
John Day
48/37
Ontario
Eugene
Bend
55/34
54/41
45/25
Caldwell
Burns
54/32
45/26
Astoria
Baker City
Bend
Brookings
Burns
Enterprise
Eugene
Heppner
Hermiston
John Day
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Medford
Newport
North Bend
Ontario
Pasco
Pendleton
Portland
Redmond
Salem
Spokane
Ukiah
Vancouver
Walla Walla
Yakima
Hi
53
47
45
53
45
43
54
52
60
48
45
49
45
55
52
55
55
59
53
57
50
56
49
46
55
52
61
Lo
44
28
25
41
26
30
41
34
39
37
24
34
32
36
44
44
34
38
38
43
26
42
35
32
43
40
34
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W
sh
sh
sf
sh
sf
sf
sh
sh
c
sh
sf
sh
c
c
sh
sh
c
c
c
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c
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c
sh
sh
c
c
NATIONAL WEATHER TODAY
Wed.
Hi
54
52
52
56
50
48
59
55
61
54
53
54
50
61
54
58
57
61
57
58
55
59
49
51
56
57
62
Lo
44
31
38
45
33
33
45
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45
42
32
39
36
42
46
47
37
44
43
46
36
46
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37
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pc
pc
pc
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pc
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pc
pc
pc
pc
pc
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c
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c
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c
pc
pc
WORLD CITIES
Today
Beijing
Hong Kong
Jerusalem
London
Mexico City
Moscow
Paris
Rome
Seoul
Sydney
Tokyo
Hi
60
72
60
54
74
29
52
72
55
71
58
Lo
40
66
47
42
51
17
39
51
36
62
46
W
c
sh
s
pc
pc
sn
pc
t
pc
sh
pc
Wed.
Hi
58
74
69
54
78
28
52
61
54
77
59
Lo
29
62
57
41
54
16
40
45
32
64
42
W
pc
sh
s
pc
pc
sf
pc
c
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s
pc
WINDS
Medford
55/36
(in mph)
Klamath Falls
45/24
Boardman
Pendleton
REGIONAL FORECAST
Coastal Oregon: Mostly cloudy today with
a few showers. Partly cloudy tonight with a
few showers.
Eastern and Central Oregon: A shower in
places today; however, a snow shower near
the Cascades.
Western Washington: Mostly cloudy today
with brief showers. A couple of showers
across the south tonight.
Eastern Washington: Mostly cloudy today
with a shower; snow, accumulating 1-3
inches in the mountains.
Cascades: Mostly cloudy today. A shower;
snow, accumulating 1-3 inches in the south.
Northern California: Mostly cloudy today;
a shower; however, a bit of snow in the
interior mountains.
Today
Wednesday
WSW 10-20
W 10-20
WSW 8-16
WSW 8-16
UV INDEX TODAY
Shown is today’s weather. Temperatures are today’s highs and tonight’s lows.
0
2
3
PORTLAND (AP) — A
623-foot bulk carrier ran
aground in a narrow part of the
Columbia River near Cathlamet,
Washington.
The U.S. Coast Guard says
the vessel loaded with grain was
heading west with a river pilot
still onboard when it ran into
trouble early Monday. Two tug
boats are on the scene to keep it
stabilized.
The vessel named Sparna
contains more than 200,000
gallons of high sulfur fuel and
about 40,000 gallons of diesel.
Capt. Dan Travers of the Port
for the Columbia River says
responders have not seen any oil
in the water.
The cause of the incident
remains under investigation.
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REGIONAL CITIES
SATURDAY
Grounded vessel in
Columbia River; no
sign of oil in water
Corrections
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THURSDAY
Retirement Savings Plan, unless
they opt out, as soon as July
2017.
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regrets any errors. If you notice a mistake in the paper, please
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Forecast
WEDNESDAY
BEND (AP) — The Oregon
State Treasury says about 1
million Oregon residents have
no way to save for retirement
through their employers.
The Bulletin reports that
¿gure is more than 40 percent
higher than the previous
estimates of Oregon workers
who lack access to work-based
retirement plans.
The total combines workers
whose employers do not offer
retirement plans, workers
who are not eligible for their
employers’ plans and self-
employed Oregon residents
who do not have retirement
plans.
Members of the Oregon
Retirement Savings Board, who
are designing the state retirement
plan, heard the estimates during
a meeting Tuesday.
Workers not covered by
employer’s retirement plans
would be automatically enrolled
and contribute to the Oregon
&ODVVLÀHG$GYHUWLVLQJ
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Copyright © 2016, EO Media Group
TODAY
Many don’t have
workplace retirement
Drought conditions like those
in 2015 may increase irrigation
demands in future years. More
farmers in the region are also
growing higher-value crops, such
as blueberries, that require summer
irrigation.
Greg Bennett, an onion farmer
near Salem, said the Willamette
Valley may have an opportunity to
increase vegetable production as
California farmers continue to face
water scarcity.
“I’m really hoping we can realize
the value of what we have,” he said.
While the 13 dams have the
capacity to store 1.6 million acre-
feet, that represents ideal water
conditions, said Kathryn Warner, an
environmental scientist at the Corps.
Realistically, the dams hold about
1.4 million acre feet of water during
an adequate year, and 500,000 acre-
feet are dedicated to in-stream uses
for ¿sh under the current biological
opinion.
The amount designated to irri-
gation could rise above 95,000 acre
feet, but the entire allocation plan
must be reviewed under the National
Environmental Policy Act, Warner
said.
This process will include inter-
agency consultation on species
impacts and may require another
biological opinion, Warner said.
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for a couple years, O’Connor said.
“We’re a company that keeps a
lot of people working,” O’Connor
said. “We pay our taxes, we pay our
wages, pay benies. But we are one
of the companies that will probably
get signi¿cantly impacted by this
thing if it passes.”
Potiowsky wrote in an email
that he did not intend to provide
commentary on Our Oregon’s
initiative, known as IP 28.
“So my comment was not a
value judgment on gross receipts
taxes or IP 28, that is, not making
a statement as to whether IP 28
is either good or bad policy,”
Potiowsky wrote. “Very brieÀy,
I said that much more research is
needed on the likely net impacts to
the economy from IP 28, and that
the issue is quite complicated. I am
sure that in the next months, we will
see IP 28 getting a lot of medical
attention from spin doctors.”
———
The Capital Bureau is a
collaboration between EO Media
Group and Pamplin Media Group.
Hillary Borrud can be reached
at 503-364-4431 or hborrud@
eomediagroup.com.
3
2
0
8 a.m. 10 a.m. Noon 2 p.m. 4 p.m. 6 p.m.
0-2, Low
3-5, Moderate 6-7, High;
8-10, Very High;
11+, Extreme
The higher the AccuWeather.com UV Index™ num-
ber, the greater the need for eye and skin protection.
Forecasts and graphics provided by
AccuWeather, Inc. ©2016
Shown are noon positions of weather systems and precipitation. Temperature bands are highs for the day.
-10s
-0s
showers t-storms
0s
10s
rain
20s
flurries
30s
40s
snow
ice
50s
60s
cold front
70s
80s
90s
100s
warm front stationary front
high
110s
low
National Summary: Most areas from the Four Corners to the Atlantic coast can expect sun-
shine today. Warmth will expand in the South Central states. Rain and snow will affect the
Upper Midwest and the Northwest.
Yesterday’s National Extremes: (for the 48 contiguous states)
High 94° in Imperial, Calif.
Low 5° in Grand Marais, Minn.
NATIONAL CITIES
Today
Albuquerque
Atlanta
Atlantic City
Baltimore
Billings
Birmingham
Boise
Boston
Charleston, SC
Charleston, WV
Chicago
Cleveland
Dallas
Denver
Detroit
El Paso
Fairbanks
Fargo
Honolulu
Houston
Indianapolis
Jacksonville
Kansas City
Las Vegas
Little Rock
Los Angeles
Hi
75
68
52
59
52
68
50
47
69
65
61
58
75
68
58
84
33
44
81
73
62
70
74
70
70
69
Lo
37
45
47
47
29
50
33
39
50
46
46
46
62
32
47
56
11
26
69
62
49
48
59
49
55
52
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pc
Wed.
Hi
58
73
64
69
51
73
55
55
79
73
50
52
83
41
51
71
36
39
81
77
63
78
77
69
72
75
Lo
30
55
49
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33
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10
22
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54
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32
50
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Today
Louisville
Memphis
Miami
Milwaukee
Minneapolis
Nashville
New Orleans
New York City
Oklahoma City
Omaha
Philadelphia
Phoenix
Portland, ME
Providence
Raleigh
Rapid City
Reno
Sacramento
St. Louis
Salt Lake City
San Diego
San Francisco
Seattle
Tucson
Washington, DC
Wichita
Hi
65
66
75
53
53
67
71
53
78
75
57
80
44
46
65
54
50
63
71
48
67
62
55
84
62
81
Lo
50
55
66
36
32
50
60
46
58
47
47
54
34
39
44
27
29
43
55
35
54
49
44
49
48
54
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s
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Wed.
Hi Lo W
68 59 pc
70 56 pc
81 73 pc
40 32 r
39 25 sn
71 60 pc
78 66 pc
67 49 pc
77 37 s
54 28 r
69 49 pc
77 52 pc
46 30 r
61 41 c
75 52 s
See 39 ECON
22 sn
58 33 s
68 44 s
69 47 c
49 35 sn
73 54 s
65 51 s
54 44 c
73 43 pc
72 54 pc
73 33 s
Weather (W): s-sunny, pc-partly cloudy, c-cloudy, sh-showers, t-thunderstorms, r-rain,
sf-snow flurries, sn-snow, i-ice.
