Oregon speaker earmarks $1.4B of tax hike for schools

SALEM, Ore. (AP) – Oregon House Speaker Tina Kotek introduced an unexpected proposal Thursday she says fills in the holes of a corporate tax overhaul plan that other lawmakers rolled out two days prior as a $1.6 billion budget shortfall looms.

Both proposals could boost revenue by about $3 billion through a new business tax that’s similar to Measure 97, which voters rejected in November, but they’d apply to more businesses and at smaller tax rates.

Unlike the first plan, Kotek’s proposal would earmark half of that money for education. She’d also fully fund three other November ballot measures that voters approved for education, veterans and outdoor recreation programs. Her plan also includes $650 million in spending cuts.

The final proposal could end up before voters in a special election this fall.

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The plan brought a flurry of news releases Thursday, starting with the one from the House speaker’s office.

Oregon House Leaders Announce Plan to Reform Business Taxes, Invest in Education

Education Investment Initiative aims to stabilize budget, strengthen schools

SALEM – Today three senior House Democrats released the Oregon Education Investment Initiative – a plan to invest in Oregon’s education system by overhauling and modernizing the state’s outdated business tax structure.

The initiative builds upon a framework developed by a six-member, bipartisan work group that was released on Tuesday of this week. The framework outlined how to replace Oregon’s corporate income tax system with a new Commercial Activity Tax (CAT), but did not include a proposed tax rate. Today ‘s Education Investment Initiative proposes a CAT of 0.95% on a business’s sales in the state, applied only to companies with more than $5 million in Oregon sales; smaller businesses would pay just $250. The lawmakers also proposed $200 million in tax relief for low- and middle-income households.

The Education Investment Initiative would raise $2.1 billion this biennium and commit a minimum of 75% of revenue generated through business tax reform to education.

“Are we going to make another generation of students wait while the adults figure this out? That would be a real shame. It’s time to take action,” said House Speaker Tina Kotek (D – North Portland). “We have an opportunity to end the 20 years of boom-and-bust budgeting that has robbed our schools and public services of the stability needed to achieve the outcomes Oregonians want.”

Speaker Kotek introduced the initiative along with the budget and revenue leaders in the House: Rep. Nancy Nathanson (D – Eugene), co-chair of the budget-writing Ways and Means Committee and Rep. Phil Barnhart (D – Eugene), chair of the House Revenue Committee.

“I’ve spent the past two decades fighting to find a way to fund our schools in the aftermath of Ballot Measures 5 and 50,” Rep. Barnhart said. “Now is the time to act: the state economy is strong, but there are storm clouds on the horizon.”

The three legislators presented their plan to the Joint Tax Reform Committee, which met for the first time on Tuesday . Their presentation can be viewed here .

“Legislators have an important choice to make: do we find another Band-Aid to close the current shortfall and resign ourselves to mediocre outcomes, or do we take action to invest in Oregon’s future?” Rep. Nathanson said. “I believe we should make the choice to finally invest in Oregonians’ priorities at a level that gives everyone a chance to succeed.”

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House Republicans respond to massive tax increase proposed by House Democrats

Salem, Ore. – House Republican Leader Mike McLane (R-Powell Butte) released the following statement after House Democrats unveiled a multi-billion dollar tax increase this morning :

“The proposal brought forward today is a wolf in sheep’s clothing. It is a massive, multi-billion dollar tax on Oregon sales akin to Measure 97 that was rejected by voters less than six months ago. It is an admission of the fact that Democrats can’t balance the budget despite record revenues. And once again Democrats claim, ‘it’s for the kids,’ even as they continue to drag their feet on what would truly secure lower class sizes and more school days — addressing PERS, health benefits and other cost drivers. Oregonians will not be fooled.

“House Republicans continue to believe that we can achieve the future we all want for Oregon by pursuing a balanced approach that includes a commitment to economic growth, comprehensive, structural spending reform and targeted investments in education and workforce development. A $3 billion tax on Oregon sales should not be part of that equation.”

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News release from Our Oregon:

Statement in Support of the Oregon Education Investment Initiative We applaud the announcement today by Speaker Kotek and Chairs Nathanson and Barnhart to raise taxes on large corporations to give us the K-12 school budget Oregon has been waiting for. Their proposal to implement a combination of corporate revenue reform and cost reduction is leadership in action. The story of Oregon’s K-12 schools is too familiar — underfunded classrooms make class sizes too big and school years too short. Oregon has the 3rd largest class sizes in the country and one of the shortest school years. Budget cuts have slashed arts, music, and PE, and every year communities are forced to hand out pink slips to needed classroom teachers. According to Education Week, Oregon ranks 39th in the country for per-student funding. This budget begins to change all of that. By investing $1 billion into K-12 schools, we can add two weeks back to school year, reduce class sizes K-5 classrooms, invest in teacher mentoring, focus on equity, put a school nurse in every school, support for English learners, improve graduation rates and reduce chronic absenteeism and more. This is an investment in kids that we’ve needed for so long. We also applaud and support the structure of this new funding, built on thoughtful and deliberate processes inside the Legislature. This plan shifts the tax burden from low and middle-income families and calls on corporations to step up and invest in their future workforce and the future of our state. Oregon families have long invested in schools, it is time for big business to do more. Today ‘s Education Investment Initiative deserves the support of the education community and the entire state. It gets Oregon close to the Quality Education Model funding level families deserve, and it allows every community to start reversing the years of cuts our classrooms have felt. We encourage the Legislature to quickly adopt the Education Investment Initiative proposed by Speaker Kotek and Chairs Nathanson and Barnhart. On the practical side, school districts are budgeting as we speak, and they need the reassurance that the state is committed to making new investments. From the community perspective, passing this budget also shows a commitment by Oregon’s leaders to invest in our kids and Oregon’s future. This Education Investment Initiative is a sign of leadership from Oregon’s elected officials. Thank you for changing the lives of an entire generation of kids who otherwise would go without. Signed: Oregon PTA Confederation of Oregon School Administrators (COSA) Fully Fund Schools Oregon (FFS Oregon) Scott Mills, North Marion School District Board Member Carl West, Mapleton School Board Chair Siobhan Burke, Multnomah Education Service District Board Member Erick Flores, Parkrose School Board Member Andrea Valderrama, David Douglas School Board Member Paul Jorgensen, Bethel School Board Member Twinkle Morton, Fern Ridge School District Board Chair Matt Thatcher, COSA President — Faith Leader Statement in Support of the Education Investment Initiative We measure success in our communities by the depths we travel to care and tend to one another. Today , legislators in Oregon’s House of Representatives took a major step to care for Oregon’s children by announcing a plan that would make new investments in our K-12 and higher education system. The Oregon Education Investment Initiative announced by Speaker Kotek and Representatives Phil Barnhart and Nancy Nathanson demonstrates true leadership, and a deep commitment to the future of Oregon. For too long our families have been victimized by short school years and larger than imaginable class sizes. It’s incumbent on us to address those shortcomings, but all too often political expediency overcomes community duty. Not today . Today , these legislators showed Oregonians what caring community leaders look and act like, and our state will be better for it. Teaching, learning, and education are a large part of the faith community. So much of our success comes from learning about our relationship with our family, our community and our God. As faith leaders, we rely on education and teaching to reach our congregations every day. We know the power of individual attention, regular teachings, and opportunities to learn and explore. Opportunity is what makes teaching and learning possible in our faith communities, and it is required in our educational communities as well. Yet we all know that far too often, less than adequate budgets mean students do not receive the chances they need. This Oregon Education Investment Initiative means opportunity for every child. We applaud its proposal and we pray that the Legislature can come together to embrace its leadership and wisdom in the coming months. If we care about the future of our state, we must make investments in our education system now. Oregon’s communities simply can not wait any longer. As faith leaders, we support the Oregon Education Investment Initiative proposed today and hope that others will join us in urging the legislature to do adopt this inspiring plan. Signed, Rev. Steve Berube, Retiree Rabbi Debra Kolodny, Executive Director of Nehirim Pastor M. Lynne Smouse López, Ainsworth United Church of Christ Rev. Kris Voss-Rothmeier, Presbytery of the Cascades Karen Nettler, Board Chair at Oregon Center for Christian Voices Rev. Joseph McMahon, Retired Catholic Priest and Jobs with Justice Faith Labor Committee Rev. Lisa Jean Hoefner, Retired Clergy of United Methodist Church Rev. Dr. Barbara Campbell, St. Mark Presbyterian Church Rev. Caren Caldwell, Associate Minister at Medford United Church of Christ Charles Mantey, Saint Mark Lutheran Church of Salem Fr. Jack Mosbrucker, Retired Catholic Clergy Michael Rowe, President of the Board at Pacific Unitarian Universalist Fellowship of Astoria Pastor Chris Hyde, Hillsdale Community Church Rev. Dr. Chuck Currie, University Chaplain at Pacific University Marcia Olsen, Retired Unitarian Universalist Minister — Release from AFT-Oregon Today ‘s Education Investment Initiative proposal is the first step in reversing years of disinvestment. We strongly support the announcement today by Speaker Kotek and Chairs Nathanson and Barnhart to make investments in higher education by raising taxes on large corporations.

For Oregon to have a strong economy with family wage jobs and opportunities for all, we need a vibrant higher education system that is affordable and accessible for every Oregonian. The $250 million that will be invested in our higher education system through the Oregon Education Investment Initiative will translate to lower tuition and better programs for Oregon’s university and community college students. It will get us out of the cycle of chronic disinvestment in higher education and open the doors of opportunity for many more Oregonians.

In recent years, supporting Oregon’s community colleges and universities has become increasingly difficult as state cuts to higher education budgets have driven up tuition costs and eliminated important programs.

Oregon has always valued its colleges and universities, but budget cuts have threatened the ability to deliver a great education to every student. One budget cannot reverse two decades of cuts, but it can start a new trend and build towards a better future where all students can get access to the training and education they need.

Thank you Representatives for proposing real investments in Oregon’s colleges and universities.

As leaders in the higher education community, we call on the Legislature to quickly adopt this Oregon Education Investment Initiative so we can begin to provide the skills and education Oregon’s workers need.

Signed,

Jaime Arredondo, Western Oregon University Board Member
Rosie Pryor, Chair of Lane Community College Board of Education
Matt Keating, Vice Chair of Lane Community College Board
Austin Folnagy, Klamath Community College Board Member
Kenney Polson, Mt. Hood Community College Board of Education Director
Susan Anderson, Southwestern Oregon Community College Board Member
Phil Carrasco, Lane Community College Board Member
Tony McCown, Lane Community College Board Member
American Federation of Teachers — Oregon
Oregon Student Association
Oregon Education Association

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Main Street Alliance of Oregon Small Businesses Support the Investment Proposal

Main Street Alliance of Oregon applauds the announcement today by Speaker Kotek and Chairs Nathanson and Barnhart to raise taxes on large corporations

Portland, Oregon – May 4, 2017 – On behalf of 3500 plus small business members we represent, the Main Street Alliance of Oregon applauds the announcement today by Speaker Kotek and Chairs Nathanson and Barnhart to raise taxes on large corporations to make targeted and strategic investments in early childhood education, K12 schools and higher education in Oregon. Our business thrive when we have strong schools and invest in programs that families need. This is the first plan we’ve seen that makes serious investments by shifting the burden for investing in schools and services from small businesses and working families to large corporations. Thank you, Representatives, for providing the leadership Oregon needs.

For decades, small businesses across the state have been paying a higher rate in taxes than the large businesses we compete with. The Oregon Education Investment Initiative introduced today finally makes large corporations pay their fair share in taxes while protecting Oregon taxpayers. This plan is what Oregonians have been waiting for! It will allow us to finally make meaningful investments: We can invest in job skills training, hire thousands of teachers, increase college affordability and more.

Small business leaders proudly do their part and pay their taxes because we know that investing in our communities makes all of us stronger. For small businesses, when the economy is healthy and families have access to good schools and services, they can afford to shop locally at the tens of thousands of small businesses that make Oregon great. Our success relies on the success of our communities, and investments in schools and family services make us all successful.