By Pat Caldwell
Malheur Enterprise
ONTARIO – Oregon Rep. Cliff Bentz said he wasn’t surprised when Gov. Kate Brown announced her support for a controversial new corporate tax plan last week.
However, Bentz said the governor’s endorsement of IP28 – which will appear as Measure 97 on the November ballot – was regrettable.
“It is really unfortunate our governor chose to support this,” Bentz said.
The measure would create a 2.5 percent tax on Oregon corporations with sales in excess of $25 million annually.
Proponents of the plan say the measure will force large corporations to pay their fair share for operating in Oregon. They say the revenue generated from the tax would used for schools, senior care and other high-profile needs. Critics believe the tax will eventually be passed onto consumers who will have to pay higher prices, and they say the spending on schools and seniors is not certain.
While Bentz conceded the state’s tax system needs to be reviewed, he said a gross-receipts tax isn’t the best solution for state revenue issues.
“It is sad because there is no doubt that Oregon needs some really hard work done on its tax structure. It (IP28) is unfortunate for many businesses,” he said.
Bentz said he has little doubt that if IP28 gains approval, big firms – such as Idaho Power – will have to raise prices and recoup its losses through higher rates. The tax will also restrict investment in Oregon by outside firms.
In addition, he said, “It is less friendly for companies that produce good jobs, they won’t come here.
“If you are looking at addressing income inequality, then it is not this.”
Bentz said IP28 is simply a sales tax.
“It is an extremely poorly crafted, populist device built on the assertion companies are bad and need to be punished. That is not how you bring good-paying jobs to the state,” he said.
Bentz said IP28 tries to simplify a very complex set of issues revolving around tax policy.
“This whole thing will come down to two phrases: Sales tax or companies are bad. Is that they way to create tax policy?” he asked.
Bentz also said IP28 sends a message about the state’s initiative process.
“The initiative process is subverted by huge piles of money. The reasons we have a representative government is the founders understood that government is hard work,” he said.
Bentz said that IP28’s impact will be felt locally.
“It will raise electricity rates. It will damage dramatically Ash Grove (in Baker County). Wal-Mart will pay. You will see higher prices across the board,” he said.
Bentz said that if IP28 is approved it will also ignite a growth in government.
“Adding 27 percent more government,” he said.
The governor endorsed the measure last week, saying the state needs more money for education and citing unfairness in the corporate tax structure.
Brown’s support was not unexpected. Her bid for the governor’s spot in November is supported by the public employees unions that have promoted the tax measure.
Her opponent in the gubernatorial race, Republican Bud Pierce, has opposed the measure, calling it a $6 billion blank check” for state government.