Gov. Brown to sign tax bill, call special session
PORTLAND, Ore. (AP) – Oregon Gov. Kate Brown said Friday she’ll sign a controversial tax measure but also will call a special legislative session by this summer to extend certain small businesses’ tax breaks.
Brown made the announcement, saying she will sign a controversial measure passed by her fellow Democrats in the Legislature that is designed keep Oregon from losing more than $200 million as a result of the federal tax overhaul.
Unlike most other states, Oregon’s coffers were due to take a hit because of President Donald Trump’s tax plan because of a quirk in the way the state figures federal deductions for state tax purposes.
Republicans opposed Senate Bill 1528, saying it amounted to a tax hike on mostly small businesses.
In announcing her endorsement of the measure, Brown said she will call lawmakers back to Salem to extend lower tax rates for a group of small businesses known as sole proprietors.
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News release from Rep. Knute Buehler, R-Bend:
BUEHLER SLAMS BROWN FOR SIGNING “MOM & POP” TAX HIKE
Governor’s signature on SB 1528 will increase taxes $1 billion over the next 10 years
“The state budget has never been bigger, but Governor Brown still wants more. This is an unnecessary, unfair tax hike that will hurt tens of thousands of Oregon small businesses. Gov. Brown had the chance to throw Oregon small businesses a lifeline, instead she threw them an anchor. As Governor, I will repeal this tax”, said Buehler.
Buehler voted against SB 1528 during the February session and called on Brown to veto the legislation shortly after adjournment.
Today, Buehler released an ad pledging his commitment to fight against taxes like SB 1528, and the other $13 billion in taxes Gov. Brown has supported since taking office.
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News release from Rep. Mike McLane:
Statement from House GOP Leader Mike McLane on Governor Brown’s intent to sign the small business tax hike
Salem, Ore. – House Republican Leader Mike McLane (R-Powell Butte) issued the following statement after Governor Kate Brown announced her intent to sign SB 1528:
“Today Governor Brown in one breath claimed the need of the state government to take hundreds of millions of dollars away from small businesses. Then, in next breath, announced a special session to champion small businesses. I guess this is the kind of political theater we can expect in an election year.”
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News release from state Rep. Julie Parrish:
REP. JULIE PARRISH STATEMENT ON GOVERNOR BROWN SIGNING SENATE BILL 1528
Parrish says disconnecting 400,000 businesses from tax code, increasing $258 million in taxes, passing a crony tax credit giveaway is dereliction of duty
WEST LINN, OR – Representative Julie Parrish (R-Tualatin/West Linn) today said Governor Brown’s decision to sign into law a measure that will disconnect over 400,000 Oregon small and family businesses from the federal tax code, resulting in a $258 million-dollar tax grab from working families, was tone-deaf and wrongheaded.
“It’s clear today that when Governor Brown talks about supporting working families, what she really means is that she’ll do whatever public unions and C-suite corporations who contribute to her campaign tell her to do,” stated Representative Parrish, who is also a small business owner. “This is what Oregonians get when we have an elected leader who has never signed the front of a check and has no real-world experience of understanding the risk and capital investment needed to start or grow a business, or who have been materially responsible for the livelihoods of their employees.”
Parrish further added that once again, by delaying the decision to sign another controversial bill until the last possible moment, Brown, the former chief elections officer, has denied Oregonians the full right of redress through the referendum process. “Governor Brown, as the former Secretary of State, knows full well how difficult it would be for citizens to gather the nearly 60,000 signatures needed, plus a 20% or greater cushion, to challenge this decision. She has once again circumvented the tools of the public to challenge a controversial policy.” Parrish cited polling by the Oregon Small Business Association (OSBA) as an indicator of how broadly unpopular signing SB 1528 into law is amongst likely voters, with over 30% of Democratic voters polled in opposition.
“Business owners and business issues cross the political spectrum – this decision hurts us all,” Parrish said. Parrish noted that newspapers such as the Bend Bulletin and Albany Democrat-Herald had called on the Governor to veto SB 1528. “Governor Brown is completely tone-deaf to her constituents. She approved $100 million in new non-healthcare spending after Measure 101, increased our state’s bonded debt service, failed to address cost reforms of PERS and healthcare, and prioritized raises for the unions who have contributed hundreds of thousands to her election campaign. The decision to sign SB 1528 into law, creating a tax nightmare for hundreds of thousands of Oregonians, is a clear dereliction of duty.”
SB 1528 also includes a niche, tax credit auction created under the guise of funding education opportunity grants. “If the legislature wanted to fund higher education, we should have funded opportunity grants directly from the general fund. Creating yet another opportunity for tax credit scammers to defraud Oregon’s general fund as a way for the highest-income earners in our state to shield themselves from fully paying their tax liability is cronyism at its worst.”
Parrish said that while she would have likely pursued a referendum of this measure to the voters, the Governor’s failure to make a timely decision makes it nearly impossible to achieve. Parrish said instead she’ll direct her focus to more lasting efforts by supporting the Three-Fifths initiative for 2018, and OSBA’s Small, Local, and Family Tax Equity petition for 2020.
“Oregon small businesses can’t take much more. Once business owners understand the negative impacts of what disconnecting from the federal tax code truly means, and the bureaucratic nightmare it will create, they will see how ridiculous and damaging it is that Oregon is the only state in the nation not connecting to this provision of the federal tax code.”
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News release from Sen. Jackie Winters:
Senator Winters statement on signing of
the small business tax increase
SALEM, Ore. – Senator Jackie Winters (R-Salem) has released the following statement regarding Governor Kate Brown’s announcement that she will sign Senate Bill 1528 into law, which will increase taxes on small businesses.
“The right thing to do would be to veto this partisan tax increase on small business,” said Senator Winters. “Start-ups, mom and pop shops, and young entrepreneurs are doing great things for Oregon, but the majority party insists on passing an unfair tax increase that will stifle their growth, and harm the very Oregonians we should be helping. There is no budgetary need to raise taxes on small business.”
SB 1528 had no Republican support in the House or the Senate, and was quickly passed through the 2018 legislative session despite heavy opposition. Th bill was started in the Senate instead of the House, like most traditional tax increases, setting up a future legal challenge.
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News release from the Oregon Center for Public Policy:
Governor Brown protects over $1 billion for schools and public services
Statement of OCPP policy analyst Daniel Hauser
Today, Governor Brown protected over $1 billion in funding for schools and essential services over the next few budget periods by declaring her intent to sign into law Senate Bill 1528. Instead of following President Trump’s lead and cutting taxes for rich business owners, Governor Brown stood up for Oregon’s working families and schools by disconnecting from the newly created pass-through business tax deduction.
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Statement from the National Federation of Independent Business:
Governor To Sign $1 Billion Tax Bill, Calls for Special Session
Small Businesses to lose their 20 percent deduction, Legislature to take up tax reform for sole proprietors
SALEM, Ore., April 6, 2018–Anthony Smith, Oregon state director for the National Federation of Independent Business, issued the following statement on today’s announcement by Gov. Kate Brown that she intends to sign Senate Bill 1528 and call a special session of the Oregon Legislature to make changes to Oregon’s Pass-Through Entity tax rate policy, also known as the “Small Business Tax Cut” of 2013.
“When Congress passed the Tax Cuts and Jobs Act late last year, America’s small businesses achieved a hard-fought victory that was decades in the making. Lower taxes mean more opportunities for entrepreneurs to make investments in their businesses, their communities, and their employees.
“Today’s announcement from the governor is disappointing. By choosing to disconnect from the new 20 percent deduction for pass-through business income, a key piece of federal tax reform, small businesses in Oregon will have to pay more than $1 billion in state income taxes over the next several years – tax dollars that wouldn’t have been owed, but for this tax bill.
“The governor also announced today her intention to work with legislative leaders in convening a special session of the Legislature to propose changes to the Oregon Small Business Tax Cut, specifically to address sole proprietors who were left out of the original 2013 legislation. NFIB has supported improvement in the law since then, including the addition of sole proprietors.
“We’re encouraged that the governor is interested in fixing this inequity in Oregon’s tax laws, but the exact details of the proposal will be incredibly important going forward. This could go right, but it could also go very wrong.“
