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Editorial: Sales tax is a reach too far

Published on July 7, 2016 9:52AM

‘Public employees unions run the statehouse,” said state Rep. Dennis Richardson, during a 2014 visit to Astoria. The unions assert broad influence on the Democratic side of the state Legislature through candidate interviews and campaign funding.

Now the public employees unions are asserting themselves grandly with Initiative Petition 28, the initiative to establish a corporate sales tax on corporations with gross receipts of more than $25 million annually. Paris Achen of our Capital Bureau reported Tuesday that the farm supplies and fuel cooperative Wilco would face a huge increase in its tax liability if IP 28 passes.

Ballot measures are blunt instruments. They are seldom as simple as their proponents make them sound. So what is the reality check on Initiative Petition 28?

The most correct title for the measure is the PERS Bailout Tax. Financial demands of the Public Employees Retirement System will soon increase the load on school districts and municipalities — causing schools to lay off teachers in order to fund retirement pensions.

Legislative remedies to the PERS dilemma — brokered by former Gov. John Kitzhaber — were thrown out by the Oregon Supreme Court. In the face of the court’s judgment, there was a proposal to require new PERS enrollees to contribute to their retirement, in the manner that is common in the private sector. Oregon Gov. Kate Brown would not support that.

Revenue raised by IP 28 is the unions’ answer to the PERS problem.

Achen reported that the Legislative Revenue Office projects the measure’s effects as follows: a contraction of the private sector and an enlargement of the public sector. Another consequence will be price increases for consumers, as corporations cover their big new tax liability.

Initiative Petition 28 is a reach too far.


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