New Oregon business taxes? Panel explores ideas

SALEM, Ore. — Leaders in the Oregon Legislature are forming a temporary, bipartisan committee that’ll spend the next several weeks hashing out a business tax-overhaul plan that may go to voters for final approval in a special election.

In a memo Wednesday — coincidentally the same day President Donald Trump unveiled a sweeping-tax cut plan — House Speaker Tina Kotek and Senate President Peter Courtney, both Democrats, orchestrated the creation of the Joint Tax Reform Committee with the 14 lawmakers who handle the state’s money-making policies in the House and Senate revenue panels.

The new Tax Reform Committee will hold public hearings to flesh out final details of a proposal to overhaul Oregon’s current system of taxing corporate income. That revenue-boosting proposal — already “a couple-hundred pages” long, Sen. Mark Hass told the Associated Press — will serve as the second major component to a broader plan to address the $1.6 billion-deficit that looms over Oregon’s 2017-19 budget.

The other big piece was disclosed Friday — a plan to rein back the state’s spending through hiring freezes, revising collective bargaining rules with labor unions and curbing public employee health and retirement costs.

Hass, a Democrat who is chairing the new Tax Reform Committee, said the final draft of the business tax plan may go to voters in a special election, potentially as early as this fall. That could leave the door open for a similar showdown between businesses and labor unions that ensued last year over Measure 97, the unions’ now-defeated business tax hike proposal.

“I’m not naive here, I know there’s many businesses that don’t want anything to with do tax reform,” Hass said.

Opposition is already stacking up among certain players in the local business community, which agreed to come to the negotiating table with unions and lawmakers after voters struck down Measure 97. The revenue proposal now underway in Salem is similar to Measure 97: It would replace the current corporate income tax with an Ohio-style “commercial activity tax” on business transactions — not to be confused with a sales tax that consumers outside of Oregon commonly pay at the cash register.