Oregon Voters Reject Measure To Ban Grocery Taxes

By Dirk VanderHart (OPB)
Portland, Ore. Nov. 7, 2018 4 a.m.

Millions in corporate funding wasn't enough to convince Oregon voters to wall off grocers from potential new taxes in the state constitution.

Early returns Tuesday showed Measure 103, the most expensive ballot measure in this year's election, failing 57 percent to 43 percent. The proposal would have amended the state constitution to prohibit taxes on the "sales or distribution" of food and nonalcoholic beverages.


The result, on its own, won’t change anything for grocers or their customers. There are no current proposals to slap new taxes on groceries statewide.

But the decision means grocers and other businesses can be included in proposals to raise state revenue for education and other responsibilities — such as gross receipts taxes that have been floated in recent years. And, if the measure does end up failing, it leaves open the possibility that localities like Multnomah County will see proposals to tax sugary beverages, which would have been illegal under Measure 103.

As frequently happens in measures that touch on business taxes in Oregon, big money formed up on either side of Measure 103. Large grocery chains and the American Beverage Association poured millions into pushing the proposal on TV screens, internet ads and even in grocery stores. The yes campaign raised more than $5.5 million to spread that message — and spent millions more just to land the measure on the ballot.


Opponents of Measure 103 consisted of labor unions, community and advocacy organizations, and a list of businesses that included Nike.

By far the biggest benefactor of the “no” side, though, was billionaire Michael Bloomberg. The former New York City mayor contributed $1.5 million to a campaign committee formed to oppose the measure, the largest single donation to any cause since Oregon began keeping finance records electronically. The donation amounted to more than half the money the No on 103 committee had raised by Oct. 31.

Despite its simple, “hands-off-our-groceries” messaging, Measure 103 was among the most confusing Oregonians considered this year. That’s because of the wording of the proposal, which opponents argue extended tax protections to far more businesses than the measure’s supporters intended.

A central example of this: restaurants.

Drafters of Measure 103 argued tirelessly that most restaurants don’t fall under the proposal. But the Oregon Department of Justice, state supreme court and an industry group representing restaurants all believe eateries do qualify for protection, because of how the measure defined the “sales and distribution” it targets for tax protection.

Our Oregon, a union-backed group that played a central role in opposing Measure 103, argues that the measure could also apply to trucking companies and movie theaters, and could even impact state gas taxes. At very least, the organization predicted lawsuits to arise from the measure while its true meaning was sorted out.

Polling suggested Measure 103 backers were having a hard time convincing voters of its necessity. In a poll of likely voters commissioned by OPB in early October, 33 percent of respondents supported Measure 103, while 47 percent opposed it.

With roughly a week left until election day, supporters of the proposal used an interesting tactic to help win voters to their cause. The campaign sent out mailers attempting to link Measure 103 with Measure 102, a less controversial proposal having to do with housing bonds in the state.

“Food and shelter are our two most basic needs,” the mailer said. “Voting Yes on 102 and 103 will help ensure more Oregonians have a place to live and can afford to put food on their family’s table.”