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About Cottage Grove sentinel. (Cottage Grove, Or.) 1909-current | View Entire Issue (Oct. 31, 2018)
COTTAGE GROVE SENTINEL • OCTOBER 31, 2018 • GROCERIES from A6 measure, proponents of the bill petitioned unsuccessfully to re- move the “corporate minimum tax” reference from the “no” vote summary, positing that it was beyond the scope of the measure. Th e attorney general’s offi ce disagreed and retained the reference in the summary. Th e offi ce explained that, “inclusion of a reference to the corporate minimum tax ad- vances voters (sic) knowledge about the measure,” and that “we believe that a signifi cant eff ect of the measure is that the corporate minimum tax could not be amended as it applies to sellers and distributors of gro- ceries.” Th e attempt to extract a ref- erence to the corporate min- imum tax points to an issue seldom brought to attention by the bill’s proponents — namely, that corporations which sell or distribute groceries would ben- efi t from having a certain por- tion of their revenue immune to changes in state tax policy. Th is eff ective freeze on cor- porate minimum taxes has drawn attention from oppo- nents of the bill, who argue that it would place grocery sellers, such as supermarkets, in a pro- tected category apart from oth- er businesses. In an op-ed for the Statesman Journal, Salem Mayor Chuck Stoc k up befo r they e ’re gone ! Clean Burn Wood Pellets WE DELIVER ! LANDSCAPE AND BUILDING MATERIALS Open 7 days a week! 7919 N. River Road 541-942-4664 MEDICARE OPEN ENROLLMENT BEGINS OCTOBER 15TH Do you need to Review next years choice? Call Paul to help simplify the complicated. 541-517-7362 Paul Henrichs ~ Independent Agent coverage4oregon@gmail.com Bennett wrote, “Th is danger- ous constitutional amendment would take away local control from communities, all so spe- cial interests can claim a huge tax carveout. “What is right for one com- munity can be dead wrong for another, and it should be up to those communities — not spe- cial interests — to make those decisions.” Decisions by the citizens of Ashland and Yachats stand as examples of how local control can extinguish specifi c chal- lenges to communities. In Yachats, construction of an updated sewage system was mandated by the state at the time of the local measure and the $8 million project left the small town with few options in terms of revenue. Th e fi ve-per- cent tax was met with mild re- sistance, Stanley said, but has become an accepted feature of the town. “It’s helped us meet a tremen- dous challenge,” he said. In all, arguments for the measure are largely based on its proactive eff ects — protecting struggling families, small busi- nesses and farmers from a gro- cery tax which would put such communities and sectors in fi - nancial peril. Th ese concerns, however, are mainly referenced by attempts to impose gener- al sales taxes which, local and state, have found contention only within the broader public negotiation of where and when taxes should apply. Statewide, no taxes specifi c to groceries have been brought to the Oregon Legislature. Local- ly, taxes on prepared food and beverage have been limited in scale and respectively approved or voted against in cities such as Ashland, Yachats, Grants Pass and Jacksonville. Th e threat of a statewide gro- cery tax looms somewhat as an apparition in light of this, leav- ing voters to consider whether their local governments should retain control of such decisions or change the constitution to enact a tax prohibition across the state. Measure 104 Amends Constitution: Expands (beyond taxes) application of requirement that three-fi ft hs legislative majority approve bills raising revenue. By Damien Sherwood For The Sentinel Oregon voters will decide this November if the state’s su- permajority rule for raising rev- enue needs to be more broadly defi ned. If passed, Measure 104 will amend Section 25 of Article IV of the Oregon Constitu- tion to expand the defi nition of “bills for raising revenue” to include tax or fee increases and any changes to tax exemptions, credits or deductions which re- sult in increased revenue. As it stands, this provision in the state’s constitution already requires a three-fi ft hs vote from both legislative chambers to raise revenue, but it has been interpreted by Oregon courts to be restricted to new levies and tax increases that bring money into the state treasury. Propo- nents of the measure believe this interpretation has opened the door to a range of so-called “loopholes” which allow legis- lators to skirt the Constitution with a simple majority vote. Oregon has required a three- fi ft hs supermajority to raise revenue since 1996 when Mea- sure 25 passed with 54.69 per- cent approval. In 2015, the Oregon Supreme Court ruled in the case of City of Seattle v. Department of Rev- enue that reforming or repeal- ing tax expenditures — deduc- tions, credits, subtractions and exemptions — requires only a simple majority vote, chang- ing the playing fi eld for where sources of revenue come from. One of those sources has been cutting tax breaks. Ore- gon has around 350 state tax breaks for items like business expenses and interest on mort- gages. Eliminating these brings in more money for the govern- ment without technically rais- ing taxes. Because Democrats are currently one seat shy of a supermajority in each house, these revenue sources have been an appealing target. mong legislation was Senate Bill 1528, which passed earlier this year. Th e bill disconnect- ed Oregon from the federal tax code, disallowing federal tax breaks to a subset of business- es, and thus ensured a steady revenue source of an estimated $244 million over the next two years and a total of $1.05 billion through 2023. Immediately following her signing of the bill, Oregon Gov. Kate Brown returned rough- ly $15 million to a segment of very small businesses known as sole proprietorships in the form of lower tax rates — but critics argued it was too little, too late. “Bottom line, government through tricks and schemes has $230 million in revenue from small businesses,” said Paul Rainey, manager of the Yes on 104 campaign. “Th at’s not fair.” Rainey believes Measure 104 is needed to keep such legisla- tion from becoming the norm. “It stops one party from pushing through controver- sial tax increases on party line votes,” he said. Proponents also feel the su- permajority rule would encour- age bipartisanship from a legis- lature that has already evinced a degree of cooperation. “Look at the transportation package. You had Republicans and Democrats come together and fi nd a solution,” said Rain- ey. Th e 2017 package was the largest transportation fund- ing bill in Oregon history and was heralded as a watershed moment for the Oregon Legis- lature, not just for its compre- hensiveness, but its bipartisan teamwork. “Th e Legislature showed that they’re willing to work togeth- er,” Rainey said. Measure 104 has found sig- nifi cant backing from the real estate industry, which is eager to protect tax deductions on mortgage interest rates, and other sectors such as agricul- ture and small business com- munities which have watched with suspicion as legislators have attempted to impose fees and eliminate personal proper- ty tax exemptions. Critics of these attempts wor- ry a volatile tax landscape could be disruptive and even destruc- tive for businesses already struggling with thin margins. “If they can change the rules and raise taxes on a simple majority vote, it’s a risk I don’t think we can aff ord,” said Rain- ey. “Th ere should be account- ability. And a 60 percent vote is a higher level of accountability.” Although supporters of the bill claim legislators have found loopholes to circumvent the system, opponents argue that loopholes, such as special inter- est tax breaks, already exist and that a simple majority vote is an eff ective way to close them. Tax breaks for golf course owners, 7A heated pools and politicians’ meals and gas are commonly pointed to as being protected by supermajority rules. “It just makes their job eas- ier,” said State Sen. Mark Hass of District 14. “Now they only have to fi nd 12 votes to kill a bill that would remove or mod- ify tax breaks.” Additionally, Oregon is on a two-year course to collect around $1.5 billion from its thousands of fees on items such as wastewater permits and overnight camping in state parks. Routine updates to these fees are a feature of collecting that revenue, a process which critics of the bill say could be stultifi ed by a minority should Measure 104 pass. “Th ese are the kind of day- to-day, practical decisions the Legislature does all the time,” Hass said. “And I don’t think you can govern on a day-to-day basis by language in the consti- tution. Th at’s not what the con- stitution should be used for.” Th e ability to react to these issues is a feature of fl exible government and many worry that expanding the role of the supermajority vote would risk politicizing basic government maintenance such as fee up- dates and targeting waste. “We’ve seen in the Legisla- ture in the last 10 years legisla- tors come in and they don’t vote for a fee increase at any point, no matter what,” said Hass. “So that’s a problem.” Th e degree of a state’s fl ex- ibility is also a measure of its reliability for investors. Super- majority states can be unat- tractive to capital investors and be seen as less trustworthy by bond rating agencies because of the state’s lack of fl exibility to raise revenue. Lower bond ratings means higher interest payments to investors and thus higher costs for new schools, roads, hospitals and other bond-related projects. For a state experiencing a housing crisis, more expensive bonds that impose heavier property taxes would be another log on the fi re. With Democrats needing to gain just one seat in each house to achieve a three-fi ft hs majori- ty, the measure may in any case be unable to achieve its goals aft er Election Day even if it passes. Promises it will encourage bipartisanship may also be fun- damentally inconsequential. 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