Business Tax For Schools May See Vote in January ‘20

This spring, Democrats proposed a $2 billion education bill funded by a new tax on business. After Republicans staged a walkout over the spending in April, closed-door negotiations to bring them back resulted in the bill’s funding being cut in half. Since then, industry lobbying groups and large companies have worked to add exemptions to the tax and force the bill to be voted on as a statewide ballot measure.  

The tax proposed in House Bill 3427, the education funding package, is a 0.57 percent tax on business with annual sales over $1 million, generating about $1 billion for schools annually.   

Despite claims of wanting to keep the tax simple, there are already exemptions for food, gas, and healthcare. Amendments to exempt agricultural business and additional “necessity” items like house cleaning products not included as “groceries” have been proposed, but House Speaker Tina Kotek told reporters she intends to “stay the course” on the bill as it is now. 

Another challenge came from those who think any large-scale tax should be brought before voters as a ballot measure. Robert Freres Jr., president of Lyons-based Freres Timber Inc., recently donated $1 million to a political action committee (PAC) that is building a petition to refer the tax to voters.  

The Senate Rules Committee passed an amendment on Wednesday, June 12, which sets the date for the potential ballot measure in January 2020 instead of November 2020. Sen. Ginny Burdick (D-Portland), the committee’s chair, said this was meant to give the legislature a better turnaround time should the bill fail at the ballot in January. The legislature comes back in February and could make further progress on the tax aspect.   

Republicans strongly objected to this move. Sen. Brian Boquist (R-Dallas) accused Democrats of “usurping the bill of the people.”  

Scheduling the ballot measure at the same time as the 2020 presidential election, sharing the ballot with a Republican incumbent president, may have been a stronger position for Republicans and opponents of the new tax. Democrats are likely attempting to separate the politics of education funding from the politics of November 2020.   

By Ian MacRonald