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Measure 97 breaks fundraising record

Measure 97 has shattered the state’s record for the most money contributed to a battle over a ballot measure.

The campaign to defeat the corporate sales tax measure has reached $22.5 million in contributions, more than double what proponents of the corporate sale tax have raised, according to campaign finance records. The Yes on 97 campaign has raised $10.9 million.

The record previously resided with the fight over GMO labeling in 2014, when opponents and proponents raised a combined $29 million.

In the past several days, three major grocery chains have contributed a combined $2.7 million in a final push against Measure 97, as voters received ballots in the mail this week. Costco, Albertsons/Safeway and Kroger/Fred Meyer each donated $900,000 to the campaign.

The Yes on 97 campaign also continued to receive donations, largely from public employee unions.

The measure would levy a 2.5 percent tax on the Oregon sales of “C” corporations exceeding $25 million, while “S” corporations — some with similar business structures and sales — would pay no additional tax.

Unlike S corporations, there are no limitations on the number of shareholders in a C corporation, and C corporations generally pay a corporate tax on the company’s income, while shareholders also have to pay taxes on any income or dividends they receive from the company.

The tax would yield about $6 billion per biennium in additional revenue for the state and provide a stable funding stream for state services such as education, health care and senior services. The budget gap for the coming biennium is estimated at just under $1.4 billion.

The tax directly targets big corporations such as Costco, Safeway, Kroger and Walmart, but some homegrown Oregon businesses also would have to pay the tax. In addition, many smaller businesses and chambers of commerce are opposing the tax because it would increase their cost of doing business due to higher prices for supplies and utilities.

The nonpartisan Legislative Revenue Office has estimated that the tax would likely cost the typical household about $600 more per year in the form of higher prices and slowed job growth.


By Paris Achen
Portland Tribune Capital Bureau Reporter
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Marijuana measures go before metro voters

Local pot tax, retail sales ban appear on many Nov. 8 ballots

Although legalizing marijuana is not on Oregon’s statewide ballot for the first time in four election cycles, many metro area voters will decide the fate of 29 marijuana-related measures in the Nov. 8 general election.

Marijuana measures go before metro voters

Local pot tax, retail sales ban appear on many Nov. 8 ballots

Although legalizing marijuana is not on Oregon’s statewide ballot for the first time in four election cycles, many metro area voters will decide the fate of 29 marijuana-related measures in the Nov. 8 general election.

Some voters, particularly in Portland and Clackamas County, will decide whether to impose a 3 percent local tax on top of the statewide tax on retail sales of marijuana for recreational use.

Some voters will decide whether to keep current city bans on retail sales and related facilities.

Voters in five cities — Canby, Gladstone, Oregon City, Sandy and Sherwood — will decide both types of measures. If voters uphold the bans on retail sales, the added local tax would not take effect even if voters approve.

All of these local measures stem from Oregon’s 2014 ballot measure that legalized marijuana for recreational use and follow-up action by the Oregon Legislature to carry out the new law.

Political observer Jim Moore says voters probably have not seen the last of marijuana on the ballot.

“The reason why all these measures are out there is that there are a lot of pockets in this state that just disagree with the (2014) statewide vote,” says Moore, who teaches politics at Pacific University.

“The measures are a reaction by their city councils and county commissioners to that approval. The people who oppose a statewide measure say they want local measures to prevent their sale.

“I think that shakeout will continue for at least one more election cycle — unless the Legislature puts its foot down and says there can be no local exceptions.”

A 25 percent state tax was imposed on medical marijuana dispensaries selling cannabis for recreational use — cannabis for medical use remains untaxed — but the state rate will drop to 17 percent on Jan. 1. Cities and counties have the option of adding 3 percent with voter approval.

Nineteen of the metro-area measures fall into this category.

Cities and counties also will share part of the proceeds from the state tax, unless they choose to bar retail sales, in which case they get nothing. Under state law, 10 percent of state proceeds will go to counties and 10 percent to cities, all for law enforcement.

The other 10 measures on metro-area ballots ask voters whether they want to uphold current bans on retail sales of marijuana and related facilities, such as growing and processing.

State law allows that option for cities and counties, but required many of them to put the question to voters in the Nov. 8 general election. Although majorities of voters in several counties opposed the 2014 legalization in the form of Measure 91, majorities in Multnomah, Washington and Clackamas counties voted for it.

According to the Oregon Liquor Control Commission, which regulates recreational-use marijuana, bans are in effect in a total of 85 of Oregon’s 240 cities and 18 of 36 counties. Forty-five cities and five counties have referred their bans to voters Nov. 8.

In Canby, the ballot question asks voters whether they want to remove the ban; in all other cities, the question is whether they want to uphold the ban. So a “yes” vote in Canby would be the opposite of a “yes” vote in the other cities.

Cities with a ban cannot share in the state tax or levy their own tax.

The city bans do not affect the provision of the 2014 law that allows each household to grow up to four plants, more for medical-marijuana cardholders and caregivers.

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Is Corporate Tax Measure a 'Blank Check'? Campaigns Slug it Out

Two sides of a proposed corporate sales tax on the November ballot are clashing over a fundamental tenet of the measure — how the revenue can be spent.

Initiative Petition 28 — which is on track to be called Measure 97 on the ballot — would levy a 2.5 percent tax on certain corporations’ Oregon sales exceeding $25 million.

Washington County Board Says no to Measure 97 in Split Decision

Washington County commissioners, by a 3-2 vote, will formally oppose Measure 97.

The Nov. 8 ballot initiative would raise a projected $3 billion annually by raising the corporate minimum tax by 2.5 percent on a business’s Oregon sales of more than $25 million.

Oregon Health Forum hosts a debate on this controversial ballot measure on Oct. 5 at the Multnomah Athletic Club. For details, click here.

Is corporate tax measure a 'blank check'? Campaigns slug it out on how revenue could be used

Two sides of a proposed corporate sales tax on the November ballot are clashing over a fundamental tenet of the measure — how the revenue can be spent.

Initiative Petition 28 — which is on track to be called Measure 97 on the ballot — would levy a 2.5 percent tax on certain corporations’ Oregon sales exceeding $25 million.

Our Oregon, the nonprofit group backing the proposal, wrote in Section 3 of the initiative that revenue from the tax “shall be used to provide additional funding for public early childhood and kindergarten through 12th grade education, health care and services for senior citizens.”

Opponents of the measure argue that passing the tax is akin to writing a “blank check” to the Legislature, because the ballot measure is not constitutionally binding. That means that lawmakers may spend the estimated $3 billion in annual state revenue from the tax for any purpose they see fit.

An opinion released Monday by the nonpartisan Office of the Legislative Counsel supports the opponents’ claim.

“Section 3 would not bind a future legislature in its spending decisions,” wrote Chief Legislative Counsel Dexter Johnson in the opinion issued to Rep. John Davis, R-Wilsonville. “If Measure 97 becomes law, the Legislative Assembly may appropriate revenues generated by the measure in any way it chooses.”

Only a constitutional amendment could restrict how the Legislature spends the money, legislative counsel concluded.

Katherine Driessen, a spokeswoman for Our Oregon, said the ballot measure “spells out very clearly where the revenue must go.”

“As with any law, the Legislature would have to change the law in order to spend the money on anything else,” Driessen said. “We believe that with the billions needed to boost our schools and critical services, any Legislature would be hard-pressed to spend the money on anything other than those areas.”

Sen. Richard Devlin, D-Tualatin, co-chairman of the Joint Legislative Committee on Ways and Means, said going against voters' wishes would stir up political backlash. “They could use it (IP 28 revenue) for anything they want at their own peril,” Devlin said. “If it passes, the voters would have spoken very clearly that they want these things improved.”

Everything you want?

The Legislature has modified ballot measures in the past to fix sections that didn’t work or to add clarity, but generally has adhered to the intent of such laws, Devlin said.

For example, lawmakers have made several tweaks to Measure 91 legalizing recreational marijuana since voters approved the law in 2014.

“Obviously you’ll run into some marijuana advocates who’ll say we didn’t follow what they’d hoped for, and you’ll probably run into some people who weren’t advocates who said we went too far, but I think the Legislature actually tried” to follow the spirit of the law, Devlin said.

Proponents of the measure and lawmakers already disagree on interpretations of the intent of Measure 97.

Lawmakers on the ways and means committee have said some of the revenue from Measure 97 could be used to help offset some $885 million in projected cost increases to the state’s public pension program, known as the Public Employees Retirement System.

“It could be used for reserves or PERS, if it’s needed to,” said Rep. Peter Buckley, D-Ashland, who co-chairs the committee with Devlin.

Driessen of Our Oregon, said using Measure 97 revenue for PERS would conflict with the intent of the initiative. But lawmakers say that view denies the reality that PERS is part of the budgets for K-12, health care and senior services.

“I could put a certain amount into K-12 and say I’m not covering the PERS funds; then the school districts don’t have that much in additional resources because they do have cover the PERS costs, so it isn’t like there is a barrier between these two,” Devlin said.

Lawmakers also want to have the flexibility to repurpose revenue in the event of an economic downturn or other financial crisis, in order to avert layoffs or cuts in basic services, Buckley said.

“You’re going to get this from both sides,” Devlin said of the battle over IP 28. “One side is going to say the Legislature can do whatever they want with this so then you shouldn’t approve the measure. The other side is going to say: 'Voter, you’re going to get everything you ever wanted if you vote for the measure.' ”

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Washington County board says no to Measure 97 in split decision

Washington County commissioners, by a 3-2 vote, will formally oppose Measure 97.

The Nov. 8 ballot initiative would raise a projected $3 billion annually by raising the corporate minimum tax by 2.5 percent on a business’s Oregon sales of more than $25 million.

Voting for an opposition resolution Tuesday (Aug. 23) were Chairman Andy Duyck and Commissioners Bob Terry and Roy Rogers. Voting against the resolution were Commissioners Dick Schouten and Greg Malinowski.

Elected officials can take stands on ballot measures. But under state law, neither they nor government staffs can use public resources to promote or oppose them.

The measure has sharply divided business groups, which have amassed millions in their campaign to defeat it, from the public employee unions sponsoring it.

Terry, who has been in the nursery business, proposed the resolution in opposition to Measure 97.

He said the tax would compound the cost to a farmer buying fertilizer, chemicals, seed and feed from businesses subject to the tax.

“It’s very regressive on the small businessman,” Terry said. “If he buys three or four items within the county, he is going to have to pass that (cost) off, so it is not really 2.5 percent. It compounds beyond that.”

The measure does exempt from the definition of “Oregon sales” purchases made within agricultural cooperatives.

But Schouten said state lawmakers can make adjustments to the measure, which raises money for education, health care and senior services through the state general fund.

“All of them are woefully underfunded, almost everyone agrees,” Schouten said.

“This is at least a good start to raise some of the money. We’ve got a tremendous shortfall at the state level.”

“I think the consequences of not finding additional funding for the considerable shortfalls, particularly on the education side, are far worse than the measure would do.”

Malinowski acknowledged that businesses will pass through any higher costs to consumers, but he is skeptical about the job losses estimated by Measure 97 opponents.

“I do not think we will have grass growing in the streets on this one,” he said.

“I do not think I have gotten enough information yet to feel comfortable with what the issues are.”

Duyck, who employs 20 people in a business that manufactures plastic and metal components, said the measure would increase the cost of power and supplies. He said half his output goes to exports in competition with businesses that do not face shipping costs.

“There are companies like mine that will be directly affected,” he said. “Make no mistake about it: It’s not even a question mark as to whether or not they will. They simply will.”

Rogers referred to voter rejection of a retail sales tax nine times between 1933 and 1993 — Oregon is one of five states without one — and said “this is definitely a hidden sales tax.”

“Our largest employers will simply shift activities out of Oregon, which is not good for our economy – and everybody is a loser,” he said.

Rogers also said the county and Clean Water Services – the latter a separate agency governed by the commissioners – also make purchases of materials from businesses subject to the higher tax.

“If we have to absorb those cost increases, property taxes and (utility) rates go up,” he said.

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Beaverton wants to tax marijuana

If voters approve in November, a 3% city tax would apply to recreational pot sales

Beaverton’s marijuana smokers may soon have to pony up a little more green for their green.

The City of Beaverton is preparing to put a 3 percent tax on recreational pot before voters this fall. The tax would not apply to medical marijuana.

If approved, the tax could generate $86,000 per year, a loose estimate based on Oregon Liquor Control Commission financial data applied to the five stores currently licensed to sell marijuana in the city, according to Finance Director Patrick O’Claire.

The tax income would go into the city’s general fund, where it would be available for general operations rather than earmarked for specific purposes, O’Claire said.

However, the new revenue would help offset additional city costs related to marijuana enforcement, such as additional training for the city’s police officers in recognizing signs of drug-impaired drivers.

During a presentation on the proposal Tuesday, Beaverton City Council members all echoed support for the tax, which they equated to taxes on alcohol and tobacco sales.

“I think we need to get this on the ballot,” Council member Mark Fagin said.

The proposed ballot language will come back to the Council for formal approval to get it on the November ballot.

Like many cities around Oregon, Beaverton’s Council passed a 10 percent tax on recreational marijuana before voters approved its legalization last year.

Subsequent efforts by the state to set rules call into question the city’s ability to impose the larger tax.

At the same time, the state allowed local governments to seek voter approval for a 3 percent tax on top of collecting a share of state taxes built into the measure voters passed, said Maja Haium, an assistant city attorney who brought a draft of the ballot title and summary to the Council.

The vote must occur at a general election.

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