Measure 66, 67 redux? Dems roll out revenue plan

Measure 66, 67 redux? Dems roll out revenue plan

SALEM, Ore. (AP) — A plan by Oregon House Democrats to raise more tax revenue from corporations and wealthy individuals is evoking memories of the Legislature's last tax hikes, which eventually became Measures 66 and 67 and were approved by voters in a contentious referendum campaign.

Business groups reacted negatively to the plan as Democrats rolled it out in detail for the first time Tuesday.

"I'm very hopeful that cooler heads will prevail," said Duncan Wyse, president of the Oregon Business Council. "What worries me most is a tax hike like this would do real serious damage to the economy and jobs, and we don't want that. I hope nobody does."

House Democrats are pushing to raise $275 million in additional revenue to help balance the state budget, saying the money is necessary to increase funding for schools.

"If the goal is to kind of get the business community thinking, engaged and active, they have definitely accomplished that," said Ryan Deckert, president of the Oregon Business Association. "I haven't seen this level of email questioning from all sorts of companies — big, medium and small — in four years."

Four years ago, Democrats raised tax rates on the highest-income taxpayers and raised the corporate-minimum tax. Business groups collected signatures and referred the tax increases to the ballot, and voters signed off in January 2010.

"I think 66 and 67 were shown to be popular with the voters," said Rep. Peter Buckley, D-Ashland, the House budget chief. "Again, as we're working our way out of this crisis we're asking the wealthiest Oregonians to accept a lower level of tax exemptions. We're asking Oregon corporations to pay a bit more to help fund education."

The Democratic plan would target individuals earning at least $125,000 a year and joint-filing taxpayers earning at least $250,000. It would phase out income tax deductions for high-earning taxpayers and eliminate the personal exemption tax credit, which reduces the tax liability by $183 for every person on a tax return.

For corporations, the Democrats want to tax money held in offshore accounts using a method implemented by Montana in 2003.

They also want to extend Measure 67, making all Oregon income subject to the corporate minimum tax, not just the first $100 million that's taxed now. The corporate minimum tax is paid by corporations with high revenue but low margins, such as car dealers and grocery stores, or those that don't earn a profit in a given year.

The House Revenue Committee will hear public testimony on their proposal Wednesday, and Democratic leaders say they're open to other ideas.

Republicans questioned the need for more revenue, pointing out that the state is already projected to earn more in the next two years than it did in the two-year budget period that wraps up in June. They say the Legislature wouldn't need to raise taxes if the Democrats would cut deeper into pensions from the Public Employees Retirement System — a position echoed by many in the business community.

"As the state is climbing out the recession, that the last thing we need is taxes on businesses that are helping our economy recover," said Megan Doern, a spokeswoman for the Portland Business Alliance. "You can continue to throw money at the problem, but they need to get to PERS before you look at the revenue side."

Arthur Towers, political director for the Service Employees International Union, welcomed the Democratic proposal but said it should raise even more revenue.

"It's important to find resources to provide care for the elderly, help for abused and neglected kids," said Arthur Towers, political director for the Service Employees International Union Local 503, which represents thousands of state workers. "Asking those who are getting ahead in this economy to pay a little bit more is a very reasonable place to start."


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Copyright 2013 The Associated Press.