A4
OPINION
Blue Mountain Eagle
Wednesday, February 5, 2020
Exempt ag
from corporate
activity tax
S
ince it was passed
by the Oregon Leg-
islature last year as
part of its education reform
package, we’ve been hear-
ing producers and vendors
express concerns over the
state’s corporate activity
tax.
The tax requires busi-
nesses that generate more
than $1 million annually to
pay in addition to their reg-
ular income tax a 0.57% tax
on that “excess” revenue.
It is expected to raise $2.8
billion over the 2021-2023
biennium for schools.
It is a gross receipts tax.
The plan is similar to the
ill-fated Measure 97, an ini-
tiative petition voted down
in 2016 that would have
imposed on “C” corporations
an additional 2.5% tax on
gross receipts from sales in
Oregon exceeding $25 mil-
lion. It would have raised $3
billion per two-year budget
cycle.
While the corporate activ-
ity tax is only slightly less
ambitious than Measure 97
in terms of the revenue it
seeks to raise, it sweeps far
more businesses into its net.
C and S corporations, part-
nerships, sole proprietorships
and other entities are subject
to the tax.
And any business that
generates $750,000 in rev-
enue must register with
the Oregon Department of
Revenue.
Advocates like the gross
receipts tax because they
claim businesses use recog-
nized deductions to avoid
corporate income taxes.
The biggest problem
with a gross receipts tax is
that it must be paid regard-
less of whether the business
in question makes a profit.
High-volume, low-mar-
gin businesses such as farm-
ing can be on the hook for a
big tax bill without making
a dime.
The impact of the tax is
cumulative, with each ven-
dor in a supply chain adding
to its price to help cover the
cost. The end user of a prod-
uct — a farmer with a piece
of farm machinery — pays
the full load without neces-
sarily being able to pass that
expense along to whoever
buys the crop.
The legislature exempted
out-of-state sales. In theory
that should work in favor of
Oregon agriculture, which
sends as much as 80% of
its product out of the state.
But in reality, agricultural
exports are often commin-
gled — such as grain or ber-
ries that are sold to the same
processor or wholesaler. That
makes it difficult to certify
what is actually exempt from
the tax at the farm level.
The Oregon Farm Bureau
is lobbying to get the legis-
lature to exempt agriculture
from the tax. That would
clear up the confusion and
would also create an even
playing field between pro-
ducers who often don’t have
a say on where their prod-
ucts are sold.
We wish it luck, for once
the state latches onto a tax
dollar it is loath to let it go.
GUEST COMMENT
A pig is a pig
I
t’s no secret that my Democratic
colleagues in the State Senate
want to pass a cap-and-trade bill
this year (SB 1530). They tried last
year with HB 2020, but were unsuc-
cessful. They’ve been working since
then to try and come up with a better
version of the proposal.
We got the first real look at their
new version this past week, and
while there are some improvements,
I’m sorry to say it’s closer to putting
lipstick on a pig — no disrespect to
pigs — than anything that deserves
the legislature’s support.
One of the biggest issues with
last year’s cap-and-trade proposal
was the significant increase in gas
prices that would come as a result
of the program. Estimates provided
by the nonpartisan Legislative Rev-
enue Office showed the program
would raise prices by 22 cents per
gallon in the first year of the pro-
gram alone. For rural communities
like ours, such a significant increase
would have had a negative impact.
Rural residents travel significantly
more miles per year than urban res-
idents, and our farmers and ranch-
ers need fuel to run their opera-
tions. There’s no question these cost
increases would have been devastat-
ing for many in our area.
Supporters of cap and trade,
to their credit, have attempted to
address this concern in the lat-
est draft of the bill, but I’m afraid
they’ve come up short. Their solu-
tion amounts to an empty exemp-
tion for rural Oregon. It’s more
likely to create a bureaucratic head-
ache for fuel companies, and it’s not
clear the fuels scheme in the cap-
and-trade bill would even work in
the first place. We can’t afford to roll
the dice with this. The stakes are just
too high.
I’m also worried about the
impact cap and
trade would have
on propane prices.
Many families in
our community rely
on propane to heat
their homes and run
Sen. Bill
their farms. The
Hansell
latest version of
cap-and-trade bill
would have increased propane rates
by a minimum of $0.16 per gallon
in year one. While the bill includes
some protections for natural gas and
electricity customers, it includes no
protections for propane customers.
And there’s no question fam-
ilies in our community will see
their utility bills increase steadily
over time. Can you imagine forc-
ing our friends and neighbors, par-
ticularly those who are struggling to
make ends meet, to pay higher heat-
ing bills in the middle of winter? It’s
unconscionable.
The latest bill also made some
changes to some key governance
administration provisions of the pro-
gram. More specifically, the new
proposal would transfer author-
ity over the program to unelected
bureaucrats at the Department
of Environmental Quality. These
unelected representatives would be
given tremendous regulatory author-
ity over huge sectors of our econ-
omy with almost no accountability
for their decisions. What’s worse,
the cap-and-trade program would
raise hundreds of millions of dol-
lars on the backs of businesses and
workers with no detailed plan for
how those dollars would be man-
aged. As a member of the Legisla-
ture’s Ways & Means budget com-
mittee, this is troubling to me. I
believe we have a responsibility to
Oregonians to manage taxpayer dol-
lars with extreme discretion. This
latest proposal clearly fails in that
regard.
Finally, short sessions like the
one beginning in February were
explicitly created so lawmakers
could make minor budget fixes and
policy tweaks to laws passed in pre-
vious years. That’s it. There is not
enough time in a short session for
lawmakers to adequately review
complex legislation or ensure there
are no critical mistakes. There is
also no way someone from Pendle-
ton can make it all the way to Salem
on one hour’s notice to testify on the
bill. That’s just plain wrong.
While growing up, my fam-
ily owned one of the largest hog
ranches in the country. I raised and
showed pigs in 4-H and FFA. I like
pigs, and I am uncomfortable using
a pig to illustrate the cap-and-trade
bill, because it insults the pig. You
can train, scrub and spruce up a pig
for the show ring. You can shave
the tail, trim the ears and clean the
hooves. But that beautifully clean
pig is still a pig and by nature it
will wallow every chance it gets.
You can’t change the nature of the
pig.
And you can’t change the nature
of this piece of legislation. SB 1530
is flawed, and it is incredibly expen-
sive for Oregonians. The changes
from HB 2020 now in SB 1530
really is putting lipstick on a pig. SB
1530 is the same animal. This bill
does not have my support and I will
defend Oregonians from it through
any means necessary.
Sen. Bill Hansell grew up on a
farm north of Athena. He and his
wife, Margaret, chose to return to
Eastern Oregon to raise their six
children in rural Umatilla County.
His Senate district is the leading
agricultural producing Senate dis-
trict in Oregon.
LETTERS TO THE EDITOR
Let’s talk about
climate change
WHERE TO WRITE
GRANT COUNTY
• Grant County Courthouse — 201
S. Humbolt St., Suite 280, Canyon City
97820. Phone: 541-575-0059. Fax:
541-575-2248.
• Canyon City — P.O. Box 276, Canyon
City 97820. Phone: 541-575-0509.
Fax: 541-575-0515. Email: tocc1862@
centurylink.net.
• Dayville — P.O. Box 321, Dayville
97825. Phone: 541-987-2188. Fax: 541-
987-2187. Email:dville@ortelco.net
• John Day — 450 E. Main St, John
Day, 97845. Phone: 541-575-0028.
Fax: 541-575-1721. Email: cityjd@
centurytel.net.
• Long Creek — P.O. Box 489, Long
Creek 97856. Phone: 541-421-3601.
Fax: 541-421-3075. Email: info@
cityoflongcreek.com.
• Monument — P.O. Box 426,
Monument 97864. Phone
and fax: 541-934-2025. Email:
cityofmonument@centurytel.net.
• Mt. Vernon — P.O. Box 647, Mt.
Vernon 97865. Phone: 541-932-4688.
Fax: 541-932-4222. Email: cmtv@
ortelco.net.
• Prairie City — P.O. Box 370, Prairie
City 97869. Phone: 541-820-3605. Fax:
820-3566. Email: pchall@ortelco.net.
• Seneca — P.O. Box 208, Seneca
97873. Phone and fax: 541-542-2161.
Email: senecaoregon@gmail.com.
SALEM
• Gov. Kate Brown, D — 254 State
Capitol, Salem 97310. Phone: 503-378-
3111. Fax: 503-378-6827. Website:
governor.state.or.us/governor.html.
• Oregon Legislature — State
Capitol, Salem, 97310. Phone: (503)
986-1180. Website: leg.state.or.us
(includes Oregon Constitution and
Oregon Revised Statutes).
• Oregon Legislative Information —
(For updates on bills, services, capitol
or messages for legislators) — 800-
332-2313.
Blue Mountain
EAGLE
Published every
Wednesday by
To the Editor:
Our changing climate is not a
partisan issue. The effects impact
all of us, whatever our label. Let’s
talk about this.
Another cap and trade bill
comes before the Oregon Legisla-
ture in February. Groups like Cit-
izens Climate Lobby and Oregon
League of Conversation Voters,
both nonpartisan organizations,
want stronger provisions in what
is now Senate Bill 1530. Those
in opposition, like some ranchers,
farmers and Timber Unity, want
fewer restrictions or no cap on car-
bon emissions.
I personally favor a stronger
bill more like HB2020. We must
put a price on carbon starting now,
not sometime in the vague future.
Some say that Oregon by itself
can’t put a dent in reducing carbon
emissions. But consider that a lot
of Oregons putting a price on car-
bon will.
I talked to a Harney County
rancher a few weeks ago, who
denies we have a carbon emissions
problem and says there is no such
thing as climate change. He said he
has 40 scientist friends who say cli-
Grant County’s Weekly Newspaper
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MEMBER OREGON NEWSPAPER PUBLISHERS ASSOCIATION
Online: MyEagleNews.com
mate change isn’t happening. I said
what about the 11,000 scientists
who want a climate emergency
declared now? The rancher scoffed
and waved his hand dismissively.
To me, 11,000 vs. 40 seems pretty
overwhelming. I guess we had dif-
ferent math teachers.
I believe in science, scientists
and data. The 11,000 scientists
were actually 11,258 scientists in
153 countries from a broad range
of disciplines. They warn that the
planet clearly and unequivocally
faces a climate emergency (Journal
of Bioscience). Ecologists Bill Rip-
ple and Christopher Wolf of Ore-
gon State University spearheaded
the study. It’s important to operate
on facts.
Consider writing your state leg-
islator and senator in support of
stronger provisions for SB1530.
Your children and grandchildren
may thank you.
Marjorie Thelen
Burns
A revolution
has started
To the Editor:
At the Jan. 28 John Day City
Council meeting, I was aston-
ished to find that the city was
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going after more money through
yet more taxing districts. There is
no end to it. The taxpayers in the
city will pay directly or indirectly
in four of these districts. The rest
of us will get hit by at least three
of the current taxing districts. In
addition to a taxing district for a
pool, another possible project is to
add basketball courts on the end
of the proposed swimming pool
project. It could add more finan-
cial burdens for Grant School Dis-
trict and the John Day Canyon
City Parks and Rec District. This
was done to complete their orig-
inal design to a multimillion dol-
lar project that was pretty much a
no-go solution. This is yet another
project planned to increase the
number of unfinished projects and
very little has been accomplished.
Not adult responsible planning.
And the city’s greenhouse could
continue to lose money. Kudos
to Steve Schutte for bringing up
the concern of the many unfin-
ished projects before starting oth-
ers. The first comment against a
plan of their current manager that
I have heard. There is no end of
their overreach, and no respect for
any of the county’s taxpayers. A
revolution started.
Bob Pereira
John Day
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