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Our Opinion: Corporate tax increase threatens family budgets

M97 will put stress on family budgets -

PMG FILE PHOTO - The Pamplin Media Group logo is shown here.School leaders throughout the state should display the same rational thinking that the Bend-LaPine School Board demonstrated last week in opposing a 2.5 percent gross receipts tax in Oregon.

A majority of board members in the Bend-area school district — the fifth largest in Oregon — recognized that a proposed tax known as Initiative Petition 28 (now Ballot Measure 97) might do very little for students and teachers, while imposing a major burden on taxpayers.

As reported by the Bend Bulletin, School Board member Cheri Helt worried that voters would think a “yes” vote would mean significant improvements for schools, but that the initiative in reality would just be giving the Legislature “a blank check.”

“I don’t think these funds will ever hit the classroom,” said the restaurant owner.

Helt’s point is a valid one that ought to be considered by Portland-area school leaders as well. Measure 97, which is backed by public-employee unions, includes aspirational language directing the $3 billion it would raise each year to “education, health care and senior services.”

However, the initiative cannot in fact ensure the money will go toward those purposes. The Legislature can spend the available money in any way it sees fit — on pensions, prisons or pet projects.

Neither will the blank check handed to lawmakers be funded primarily by out-of-state corporations, as the Measure 97 proponents claim.

Powell’s Books, for example, says its tax bill would rise 50-fold if the measure becomes law. That’s the same iconic business that has donated (literally) tons of books and held fundraisers to help a local nonprofit that gives every public school teacher in Portland access to free classroom supplies.

It’s a safe bet that every school district in Oregon gets sponsorships, donations and other support from its local businesses and chambers of commerce – organizations that are overwhelmingly opposed to this tax.

What’s more, a report from the nonpartisan Legislative Revenue Office has shown that families will pay much of this regressive tax. That’s because the businesses directly affected by it are selling the very products that ordinary people use each day: groceries, clothing, gasoline, medicine and electricity.

The cost of Measure 97 to a median-income family would be at least $600 a year, which should be cause for concern for other government officials asking voters to fund local initiatives – from Metro’s renewal of a tax for protection and restoration of regional natural areas to the City of Portland’s push for a tax to build low-income housing.

And school districts themselves are looking to property owners to pony up for their own projects:

• The Portland Public School District is considering a $750 million November bond measure to rebuild schools and complete other capital projects.

• The Gresham-Barlow School District is seeking a $299 million bond measure.

• Tigard-Tualatin schools are asking for $291 million in bonds.

• The Lake Oswego School Board is looking at a $250 million bond request.

As financially stressed families learn the true potential cost of Measure 97’s “corporate” sales tax, they will have to think long and hard about whether they also can afford to pay more for school construction, affordable-housing programs and open-space protection.

And as Oregon businesses see their costs rise — either directly from the gross receipts tax or indirectly through higher costs passed on by their suppliers — they may wonder if they can continue their support of local schools.

For those reason, we urge school boards in the Portland area to join their counterparts from Bend-LaPine and help show voters the pitfalls of Measure 97.