Lawmakers pondering Oregon sales tax again

Lawmakers pondering Oregon sales tax again
This is a file photo of the opening of the 2007 Oregon legislative session in Salem.

SALEM, Ore. (AP) - A bill to impose a 5 percent Oregon sales tax surfaced at the state Capitol on Wednesday, reigniting an old debate with a few new sparks.

For one, this year's version of tax reform comes with five House Republican sponsors, though the party has had a reputation as being generally anti-tax. Any revenue-related bill needs 36 votes to pass out of the House, and there are just 31 Democrats in the 60-member chamber.

On the Senate side, some of the chamber's heaviest hitters are on board, including Sen. Kurt Schrader, D-Canby, co-chair of the budget-writing committee.

The bill, HB 2530, also folds in some pet Republican causes, including a reduction in the capital gains tax, and a reduction in the number of people subject to the state estate taxes.

But its most prominent feature is to reduce the personal income tax rate from 9 percent to 6 percent on most taxpayers, and start a sales tax, long a pet idea of those who argue that Oregon's tax system is unstable, relying too heavily on the income tax and leaving core state services vulnerable to economic downturns.

Oregon voters, however, have voted against a sales tax nine times.

Rep. Bob Jenson, R-Pendleton, one of the most senior members of the House, has signed on as a sponsor of the bill, along with Republican Reps. Sal Esquivel of Medford, Scott Bruun of West Linn, Chuck Burley of Bend and Vicki Berger of Salem.

Jenson said the idea could have momentum in this legislative session.

Last fall, he noted, Oregonians voted against ballot measures to limit state spending and to put new tax cuts in place, suggesting that perhaps there's been a change in voter attitudes. And legislators aren't preoccupied this session with trying to patch holes in a budget suffering from an income tax collection decline, he said, giving them more space for a careful review of the current system.

"We need a unified effort as far as the Legislature is concerned," Jenson said. "Do we have that now? I'm not sure, but we can get pretty close."

Jenson said a sales tax would allow the state to collect money from out-of-state tourists, and from members of what he called "the underground economy," who are paid under the table in cash.

But at least one anti-tax group warned that any effort to pass a sales tax would likely be referred to voters as a ballot measure, possibly meeting the same fate as the nine previous attempts.

"They should try to work with the existing revenue that they have, and not keep on coming out with different tax ideas, which wind up costing taxpayers more, even though they promise it won't," said Jason Williams, executive director of the Oregon Taxpayers Association. 

(Copyright 2007 by The Associated Press. All Rights Reserved.)