Education Tax Faces New Republican Challenge, Delay

Last week, Senate Democrats traded Republicans  vaccine and gun control bills to get a vote on a tax bill, Now, having passed House Bill 3427, Democrats still may not get the tax revenue.

Confused? Here’s what happened: Democrats hold a supermajority in Oregon’s State Senate, and they were set to pass a new business tax aimed at increasing school funding by $1 billion yearly. The tax is a budget salve for the state’s schools, because they need to make up for an unanticipated shortfall in pensions promised to past employees. Democrats were also set to pass legislation ending religious and philosophic exemptions to childhood vaccinations, and a gun a control bill

This all led to Republicans fleeing the State Capitol early this month, which meant there would not be a sufficient number of senators on the floor, per senate rules, to move any legislation at all, even though the Democrats have a supermajority. Hence, the wheeling and dealing to get Republican senators back to Salem, they did not need Republican votes, they just needed enough Senators on the floor.

Senate Democrats traded vaccine exemption and gun control bills to lure their GOP colleagues back, then passed House Bill 3427, the Student Success Act,  a gross receipts tax on Oregon businesses expected to raise $1 billion in education funding. The tax would affect sales over $1 million, and take effect in January. It is also seen as budget salve, given the state’s public schools will be spending to make up unanticipated public employee retirement system shortfalls.

Now this week, in a move that surprises nobody, Republican lawmakers are already organizing, to defeat the just passed funding in a general election that would probably take place early next year. All they need is 75,000 signatures within 90 days after the end of the legislative session to put the tax to voters.

Republican analysts point out voters defeated a business tax by a landslide  a couple years ago.

But, other political analysts note that Measure 97 was a far broader tax, and that House Bill 3427 does account for many of the objections voters had to Measure 97. Also, the prior measure sent money into the state’s general fund, and the current legislation could hook voters because it ties the tax directly to education funding.

Analysts on both sides agree the legislation that was set to take effect early next year, will probably go to voters first, before becoming law.