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Gross receipts tax alternative lacks critical support

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Brown, Kotek nix special session to supplant initiative


PAMPLIN MEDIA GROUP
EO MEDIA GROUPSALEM — A proposal to tax the Oregon sales of certain corporations appears to have a clearer path to the November ballot, after Gov. Kate Brown and House Speaker Tina Kotek, D-Portland, this week all but ruled out the idea of a special legislative session to consider alternative tax legislation.

The governor and speaker said during press conferences immediately after the Legislature adjourned Thursday that they do not plan to call a special session to consider an alternative to the gross receipts tax measure. Kotek said she supports the measure and plans to vote for it.

“I think Oregonians deserve a conversation at the ballot,” Kotek said. “And I think this is the conversation we need to have.”

Their statements capped a 32-day legislative session in which lawmakers passed sweeping legislation to increase the state’s minimum wage, force utilities to stop buying electricity from out-of-state coal plants and increase renewable energy, all in an attempt to keep initiatives on those topics off the November ballot.

Despite the governor and speaker’s comments, a lawmaker trying to negotiate an alternative tax plan, Sen. Mark Hass, D-Beaverton, said Friday that at least one union and some businesses are interested in a compromise. Hass unveiled his own proposal in early February.

The corporate tax initiative, written by the union-backed group Our Oregon, would impose an additional 2.5 percent tax on the Oregon sales of certain corporations in excess of $25 million. Legislative economists have estimated the gross receipts tax proposal might generate $2.65 billion annually for the state, but they are still working on an analysis of the economic impacts of the tax, for example on employment and consumer prices.

Hass said he expects the economists might complete their analysis in a few weeks. “I think that will be eye opening for people,” Hass said.

Our Oregon commissioned an analysis of the economic impacts, but the group has declined to release the findings.

Interest in a compromise?

One Democratic leader who remained supportive of holding a special session on the issue was Senate President Peter Courtney, D-Salem. “I am more than willing to get in and roll my sleeves up and make a run at that thing any way I can to avoid it being on the ballot,” Courtney said in a meeting with reporters Thursday. “But I need a lot of help. I need a lot of help.”

More specifically, Courtney said Brown and Kotek would also need to throw their support behind a special session. “I feel pretty alone right now,” Courtney said. “I’m feeling real alone.”

Courtney reiterated concerns that he raised in a speech back in December, when he said the political fight between businesses and unions leading up to the November election could be the political version of the bloody Civil War Battle of Antietum.

“That could be another very bad battle,” Courtney said Thursday. “A brutal, brutal battle that will divide us, and whoever wins doesn’t win for long because the wounds will take us years and years to get over.”

Hass said there is “growing interest” in a compromise.

“All I’ve been trying to do is facilitate a truce so we don’t have a ballot measure that splits this state in two, and I still believe that’s within the realm of possibility,” Hass said. “Initiatives are not the place to set thoughtful tax policy, especially negative, toxic, expensive campaigns like this one is likely to be. I think there’s a better way.”

When reporters asked the governor whether she would call for a special session to tackle the issue, Brown first responded with a list of reasons the state needs more tax revenue.

“I have been very clear that I believe the state needs additional revenue to support our K through 12 programs, early childhood education, making sure we make college affordable and accessible for Oregon students, and continuing on the path of the Oregon Promise to make sure that Oregon students can attend community colleges,” Brown said. “So I’m certainly open to the revenue conversations that the Legislature wants to have.”

When a reporter asked Brown again whether she would call a special session, her reply was short. “At this point in time, no,” Brown said.

House Minority Leader Rep. Mike McLane, R-Powell Butte, said Brown and Kotek ignored concerns about the possible impact of the corporate tax proposal.

“That omission was not by mistake because let’s be clear: Kate Brown and Tina Kotek want (the measure) to pass,” McLane said. “Their denial has become more and more painfully awkward as they evade the question but the fact is they want our community’s employers taxed and they want to see this sales tax implemented in Oregon, which will raise the price of our consumer goods some say as high as 10 percent.”

Hillary Borrud is a reporter with the Pamplin Media Group/EO Media Group Capital Bureau in Salem. Reporter Paris Achen contributed to this report.