PORTLAND — A new analysis of Initiative Petition 28 — Oregon’s biggest-ever corporate tax hike proposal that’s headed for the November ballot — shows the boost in business tax revenue and government jobs could be even greater than the state’s widely publicized estimates from a month ago.
The study, released Wednesday by the Northwest Economic Research Center at Portland State University, projects the measure would trigger a nearly $3.38 billion jump in tax revenue from Oregon’s wealthiest 1,000 businesses next year and then gradually escalate over the next decade to $4.3 billion in 2027. Our Oregon, the union-backed group behind IP 28, paid the research center $45,000 to do the study.
The state’s Legislative Revenue Office projects a slightly smaller $3 billion jump in tax revenue next year and then stabilize in that range over five years, which is as far as that forecast goes.
As for employment, the NERC study projects more than 30,000 government jobs would be created within a decade, almost double the state’s estimate. The private sector, on the other hand, would lose roughly 20,000 jobs over 10 years, versus the state’s estimate of 38,200 in half the time.
Aside from those disparities, mostly due to different methodologies, both studies were neutral on IP 28 and reached similar conclusions about its broader economic impact and the unknowns. Both analyses say, for instance, the tax is regressive yet a more stable source of tax revenue, while an unknown number of businesses could still get around it through various loopholes.
“We appreciate that PSU and NERC were frank about what their models could predict and what they couldn’t find,” said Katherine Driessen, spokeswoman for the campaign. “IP 28 is a unique tax on large corporations, this report reinforces that.”
Under IP 28, businesses registered as C-corporations with $25 million-plus in annual sales would pay a minimum $30,000 tax, plus a so-called gross receipts tax of 2.5 percent on anything above that sales threshold. The revenue it would generate is broadly earmarked for education, health care and senior services, although the Legislature could spend it however it wants.
Rebecca Tweed, spokeswoman for the business-backed opposition campaign, Defeat the Tax on Oregon Sales, said the “most reliable analysis of IP 28 was released last month by the nonpartisan Legislative Revenue Office.”