An Oregon business group will attempt to overturn the new tax approved by the Legislature this month to provide an extra $1 billion a year for schools.
Oregon Manufacturers and Commerce, a business lobby representing about 15 companies, needs to gather nearly 75,000 signatures from voters to put the issue on the November 2020 general election ballot. If the signature-gathering effort is successful, the tax created by House Bill 3427 will be held in abeyance until that election.
Gov. Kate Brown and Democratic leaders of the Legislature have long expected opponents to try to overturn the tax. One of the big questions is whether this group has the ability to mount a vigorous campaign. The state’s largest business lobby, Oregon Business and Industry, agreed to stay neutral on the tax after winning several concessions.
Oregon Manufacturers and Commerce filed the ballot referral Thursday. Shaun Jillions, a lobbyist who heads the group, said before filing the measure that he was confident he could raise the money needed to qualify for the ballot and make the case for eliminating the tax.
The plan approved by the Legislature places a 0.57% levy on sales by businesses with revenue of more than $1 million a year. Unlike many a gross receipts tax, it does allow businesses to deduct a portion of their costs. The legislation also exempts sales of food, health care and gasoline.
Economists say the tax ultimately would be borne in some fashions by business owners, their workers and consumers.
“This impacts very, very small businesses. A million dollars in gross sales is not a large business at all,” Jillions said.
He said he worries that many businesses will have difficulty passing on the tax.
Our Oregon, an advocacy organization that represents unions and other liberal groups, denounced the attempt to overturn the tax in a written statement: “We stand ready to fiercely defend this unprecedented investment in Oregon students. Strong schools that create opportunities for every student — whether black, brown, or white — are not just a smart investment, they are an Oregon value.”
If the tax is overturned by voters, legislators would face an additional budget hole because the revenue package also included a $400 million-a-year cut in personal income taxes. The idea is to offset some of the burden of the gross receipts tax, which actually raises about $1.4 billion a year.
Preston Mann, a spokesman for the Oregon Manufacturers group, said their complaint was with the gross receipts tax, and that’s the issue they want to take to voters.