$2 Billion Schools Tax - OSCC Decision Analysis

April 20, 2019 2:33 PM | Connie Shipley (Administrator)

It is our analysis that a $2 billion schools tax will pass.  At this time, it is prudent for OSCC to analyze its options as we have no ability to stop this tax increase.

OSCC's current position is in opposition to HB 3427, the $2 billion gross receipts tax.  Our opposition, while appreciated and meaningful to our members and allies in the legislature, renders us unable to affect any outcomes in a very adverse legislative session.  Our opposition is also only a small impediment to ultimate passage of the tax. 

It may be prudent at this time to signal a willingness to support $2 billion in taxes if certain conditions are met.  It is acknowledged that signaling a willingness to support $2 billion in taxes is both out of character for OSCC and carries some risk.  However, there is also a risk to not adapting to our political surroundings - namely, forgoing any chance to protect small business from the proposed tax, advocating for increased funding for community colleges, and being better leveraged to defeat additional bad bills that will impose major additional costs on our members.

Below is the analysis stemming from yesterday's OSCC Government Affairs call:

Context: OSCC currently opposes HB 3427, the $2 billion gross receipts tax on business. However, it is our analysis that the $2 billion tax for Oregon schools will pass. There’s 18 votes in the Senate and at least 36 in the House. There will be a $2 billion tax that passes the legislature. The overall package is currently being negotiated, but leadership wants to “fast track” the issue. The question is whether OSCC would be willing to support $2 billion for schools if certain conditions are met. __________________________________________________________________________________ OSCC Decision Options: (1) Continue to oppose HB 3427 and $2 billion tax. (2) Indicate support for $2 billion in additional taxes if certain conditions met. __________________________________________________________________________________ ‘Opposition’ upside: Our members expect us to stand with them on issues that affect their ability to be profitable. Maintain ability to join coalition to refer measure to Oregon voters. ‘Opposition’ downside: We are steamrolled with a 0.49% gross receipts tax that hurts small businesses down to $1 million in sales. No ability to kill additional bad legislation. No seat at table. ‘Support’ upside: Seat at table. Can potentially shape the tax to protect small business. Can potentially shape how money is spent. Can potentially kill other threatening bills that would impose additional burdens on our members. ‘Support’ downside: Our ability to shape the tax, the expenditures, and kill other threatening bills may not meet expectations. Our members will have difficulty with supporting a tax increase. We lose leverage to refer the measure to voters. __________________________________________________________________________________ Possible OSCC conditions: 1. No gross receipts 2. Protect small & start up business 3. Cost containment of $1 billion 4. Community colleges must receive priority funding 5. Other damaging bills must die – HB 2020, HB 2269, HB 2408

If you want to make your opinion known, contact Mary Ann Gray, who is East Portland's representative on the OSCC Government Affairs Committee at MaryAnn@westsidesec.com. 

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