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.
Although gridlock is written
See REVENUE 8A
PRICES VALID THURSDAY, NOVEMBER 1ST THRU
SATURDAY, NOVEMBER 3RD, 2018
25% to 45% OFF
Select Appliances
Cottage Grove
200 Gateway Blvd.
Cottage Grove, OR 97424
(541) 942-5400
Mon. - Sat. 8am - 9pm
Sun. 9am - 8pm
Ed & Kori Sowa
Independent Owner-Operators
facebook.com/CottageGroveGroceryOutlet
up to 20% OFF
Power Lawn & Garden
up to 45% OFF Select Tools
SAVE 40-70%
ON GROCERIES.
BEAUTIFUL, HUH?
Hours: Mon-Fri 8:30am-6:00pm | Sat 9am-6pm | Sun 11am-4pm
118 Gateway Blvd., Cottage Grove (Next to Bi-Mart) • 541-942-7377
SOUTH LANE COUNTY
FIRE & RESCUE
The Only Emergency
Medical Transport
Service
in South Lane County
HOME PRIDE
Painting and Repair LLC
Over 30 years of experience
Schedule Now
For Fall Interior Painting
LOW COST
Local & Metro Weekday Trips
Professional Caring Staff
Get ahead of the crowd!
Now is a good time to schedule for
Spring and Summer 2019 exterior repaints
Call us for a Free Quote!
Call 541-942-4493 for info.
FOR EMERGENCY DIAL 911
Your Regional Public Transportation Service
Serving South Lane County.
541-942-0456
www.southlanefi re.org
No elgibility requirements.
southlanetransit.com
“We do small remodels,
home repairs and decks!
Serving Lane & North Douglas Counties
541-735-0089
ccb# 217560