BEND, Ore. - With the unrelenting pro and con ads at fever pitch and ballots about to hit the mailbox, a leading backer and foe of controversial Measure 97, engaged in verbal jousting Tuesday night during a spirited half-hour debate hosted by NewsChannel 21, all revolving around familiar questions: What’s fair, and who would pay in the end for Oregon’s biggest-ever tax hike?
Shamus Lynsky, executive director of the Oregon Consumer League, argued that big “C corporations” who stash billions in overseas tax havens – and now outspending the other side better than 2-to-1 on all those ads -- can easily afford the 2.5 percent increase in the corporate minimum tax on sales over $25 million, and won’t pass it on through in higher prices, as the anti-ads and critics claim.
But Ryan Deckert, president of the Oregon Business Association, claimed the $6.2 billion a biennium the measure would raise is not the “magical, found money” the backers claim -- and that as a former state representative and senator, he knows the specified uses for the revenue – health care, education and seniors – can be undone by lawmakers as they wish, making it really a “blank check.”
Dueling statistics were, of course, the order of the night. Lynsky said the state is “dead last” in corporate taxes, and that big companies like Comcast “pay nothing in corporate taxes,” unlike individuals and small businesses. He said 80 percent of the state’s revenue goes to the three major needs outlined in the measure already.
But Deckert said it’s not only the largest proposed tax hike in Oregon history, but “the largest tax hike we’ve seen anywhere, per capita, in America,” and will have an estimated $600 impact on a family’s annual costs.
NewsChannel 21’s Lee Anderson posed the questions submitted by viewers, like the first one, by Dennis: “Why should be believe either side?”
Deckert acknowledged that with $20 million already raised by the two sides, “this one might end up being the most expensive (campaign) in Oregon history.”
But he said it’s clear: Studies have shown the state will see 38,000 private-sector jobs lost after it kicks in Jan. 1, and that’s why 49 of 50 Oregon newspaper editorial boards have come out in opposition (all but the Salem Weekly).
Lynsky urged voters to “take an independent look” at the measure – and at who’s funding the fight, huge corporations he said are offering arguments based on “primarily fear and misinformation.”
The two men also dueled over a study by the Legislative Revenue Office, as Lynsky said its author admitted he didn’t model the specifics of Measure 97’s tax, but all corporations, regardless of sales.
As for the firmness of where the money would go, Lynsky said, “People can rest assured that’s where the money is needed, and that’s where the money’s spent.”
But Deckert recalled a late-in-session tradition, “the Christmas tree bill,” where pet projects are funded, some more worthy than others.
“The Legislature has the power of the purse strings,” he said. “It is a blank check to the Legislature do to whatever they want. Your business, your home – everyone would love a 30 percent revenue increase – who wouldn’t? But don’t you put plans in place before you seek such a huge revenue increase? The proponents say, ‘We came up with $6.2 billion falling from the sky. We’ll get the money, and – trust us, we’ll spend it wisely.”
Deckert said he has three youngsters in public schools and knows “there’s work to be done to boosting funding and outcomes. “We need to be better. We have to do better. But that doesn’t we have to swallow an extra tax that will cost the average family $600” a year.
But Lynsky said Deckert didn’t answer the question posed: “If not this, then what? They don’t have a plan. It’s been 26 years since Measure 5 passed. It did some good things, lowering and capping property taxes, made homeownership more affordable. But it decimated public school funding. They haven’t come up with a proposal to fix it. That’s two generations falling through the cracks. They don’t have an answer.”
Asked how many companies have scrapped plans to move or expand into Oregon due to Measure 97, Deckert brought up a familiar Portland business, Powell’s books, where owner Emily Powell has expressed fears staying in business.
“They want to talk about large multinational companies,” he said of the measure’s supporters. “Talk to Deschutes Brewery,” or every business association that has come out against the measure.
Lynsky said “zero” corporations have said they won’t move to Oregon, because it’s not about where you’re headquartered. He said 82 percent of the businesses that will pay the tax are based out of state. As for Powell’s Books, Lynsky quoted the same woman who said they are “right on the cusp” of the $25 million threshold, so their “tax liability would go up very little.” He said the tax directly affects about 1,000 companies, less than 1 percent of those doing business in Oregon.
Asked by another viewer why the tax is on gross receipts, rather than net profits, Lynsky said one big reason is that’s how the current corporate minimum tax is set up, a tiered tax on gross receipts.
“All Measure 97 does is change the rate for the largest tier, C corporations making over $25 million. It increases the tax on the amount above $25 million.” He said Oregonians were “smart” to set it up that way, “because large corporations are really good at hiding their profits.” He quoted a new report from a group called Tax Fairness Oregon that said big donors to the No on 97 campaign “have over $600 billion in offshore tax shelters right now. Corporations are really good at hiding profits.”
But Deckert said corporations do pay taxes on profits in Oregon, and that was raised from 6.6 percent to 7.6 percent. “When the Legislature capped the corporate kicker, that was done on profits.”
Returning to the $600 average cost to an Oregon family the critics stress, Deckert called it a “highly, highly regressive tax on working families, because it doesn’t exempt out like other consumption” (sales) taxes on things like gas, utilities, milk or bread, “the basic commodities of life that only two other states in America” don’t exempt from sales taxes.
And on the day a KGW/Oregonian poll showed the measure in a statistical dead heat, Deckert said that’s because “the more people are learning about this, the more the polling is really dropping on Measure 97.”
Lynsky insisted that studies have shown the big corporations have national pricing strategies, and the price of that loaf of bread is the same here as it is elsewhere, where the tax burden is higher.
“They don’t adjust their prices based on what they are paying” in taxes, he said. “They are charging as much as they can to maximize profits already.”
In closing statements, Decker urged Oregon voters to “take a hard look” at the measure itself and the cost it will have for the state’s economy.”
But Lynsky urged voters to “reject the fear and vote yes for a better Oregon.”