A couple of months back, we wrote about Initiative Petition 28, a state proposal headed to the November ballot.
Corporations with more than $25 million in revenues would be subject to a gross receipts tax, with a new levy of 2.5 percent of their gross Oregon sales.
The $5.3 billion it could raise over two years would go into the state’s general fund.
Former Cannon Beach Mayor Mike Morgan likes the proposal. He thinks it’s fair to raise state funds for education and public safety through a tax on the state’s largest companies. And he doesn’t want to see local business groups derail a fund that could provide money for Oregon’s schools, which, he said, are desperately short-changed.
Safety, school needs
Oregon is 49th out of 50 states in business tax rankings, behind only Louisiana, Morgan said. Washington state is 24th, he added, citing statistics from the nonprofit group A Better Oregon, an advocate for the corporate earnings tax.
“That’s the thing that struck me,” Morgan said over coffee at Sleepy Monk. “Look at some of the states that have higher taxes but a much stronger economy. You can’t possibly make the argument it’s going to hurt the economy.”
Morgan and proponents initiative say it would fund schools and services, to the tune of more than $2 billion a year, bumping up the general fund by “10 percent or so.”
“Thirty-four-hundred teachers laid off in last decade, third-largest class size in the nation, 200,000 people who don’t have health insurance,” Morgan said. “Oregon, supposedly such a progressive state, has such a terrible higher education system. The amount of money the state provides to the higher education system is pathetic compared to other states.”
A portion of the $2.5 billion per year potentially raised by the tax could be used for emergency preparedness: building and retrofitting the state’s at-risk hospitals, schools, city halls, and police and fire stations.
Morgan said he is outraged the Cannon Beach Chamber of Commerce is considering a change in bylaws to allow lobbying in opposition to the tax.
“It’s not going to affect mom-and-pop operations,” Morgan said. “It will affect the Intels, Walmarts and the Georgia-Pacifics. I think it’s amazing that the chambers of commerce brought this issue up. Probably the only corporation in Clatsop County that has more than $25 million in sales is the Koch Brothers’ Wauna Mill on the Columbia River.”
Wauna Mill’s parent Georgia-Pacific has revenue in the billions, Morgan said, a substantial slice of that from Oregon operations.
Koch brothers in mix
Our attention really perked when Morgan mentioned the Koch brothers. Bringing them into a political debate is like throwing red meat to the lions. The brothers — Charles and David — are summoned as demons by the progressive left and heralded as not-so-quiet doers for the right.
Koch Industries Inc. purchased Georgia-Pacific for $21 billion in 2005. Georgia-Pacific, according to their own business overview, employs 2,000 people in nine Oregon locations from Clatskanie to Coos Bay. The company provides a total of $517 million in total combined wages and benefits to Oregon workers and $662 million in capital investment for growth.
In Clatsop County, one doesn’t need to do much research to find a direct connection.
“Georgia-Pacific’s Wauna paper mill, which turns 50 this year, remains the largest single employer in Clatsop County, with more than 800 employees,” wrote Edward Stratton in The Daily Astorian last October.
Are the Koch brothers fighting this corporate tax?
We contacted Georgia-Pacific at their Atlanta, Georgia, office and Koch Industries in Wichita, Kansas.
“Thanks for reaching out to us on this and apologies for the delayed reply,” David Dziok, director of communications for Koch Companies Public Sector said in an email Tuesday. “This measure is not yet on the ballot and we’re continuing to assess it. It’s fair to say, however, that like hundreds of other employers in our state, we have some initial concerns. A $5 billion tax increase on the sale of products and services that Oregon consumers buy every day will increase costs for Oregon families, small businesses and large employers alike.”
A meeting of the Cannon Beach Chamber of Commerce — an independent chamber not affiliated with the U.S. Chamber of Commerce — on the topic locally was delayed, according to Executive Director Court Carrier.
“We were shy a few board of directors due to vacations, medical issues and holiday conflicts from the weekend,” Carrier said after the chamber’s February meeting. “I have emailed our president requesting that he call a meeting of the bylaws committee to discuss it.”
Morgan said the chamber should stay out of political lobbying.
“I’m glad Cannon Beach uses the bulk of its hotel and lodging revenues to run the city,” Morgan said. “You’ve got expenses caused by tourism, like police, parking lots, public restrooms, all of those things are directly caused by the influx of tourists.
“As far as political lobbying — the chamber would be wise to stay away from that,” he added.
R.J. Marx is The Daily Astorian’s South County reporter and editor of the Seaside Signal and Cannon Beach Gazette.