Oregon Tax Hike Vote, Ballot Measures 66 and 67 (2010)

From Ballotpedia

For the text of the ballot measures, see Oregon Measure 66 and Oregon Measure 67

---

Oregon Ballot Measures 66 and 67 are on the January 26, 2010 special election ballot in Oregon as potential veto votes on a $733 million tax hike enacted by the Oregon State Legislature in 2009.

On July 20, 2009 Gov. Ted Kulongoski signed two tax bills that will increase taxes in the state by $733 million through increasing the state’s corporate minimum tax, raising taxes on the state’s high-income individuals and raising income taxes on businesses.^[1] In reaction to the news, tax activists in the state geared up to use the veto referendum process in the state to try to stop the hikes.^[2]

On October 8, 2009, the Oregon Secretary of State’s office announced that both ballot measures had qualified for the ballot. According to Don Hamilton, spokesman for the Secretary of State’s office, supporters of the measures turned in substantially more than the 55,000 signatures needed to qualify each measure for the ballot. According to Hamilton: “They filed more than twice as many [signatures]. It’s unusually high for a statewide ballot measure.”^[3]

Ballot title

Measure 66

See also: Oregon Measure 66 (2010)

The ballot title reads as follows, as of November 17, 2009:^{[4] [5][6]}

Raises tax on household income at and above $250,000 (and $125,000 for individual filers). Reduces income taxes on unemployment benefits in 2009. Provides funds currently budgeted for education, health care, public safety, other services.

• Yes vote: “Yes” vote raises tax on incomes above $250,000 for households, $125,000 for individual filers. Tax rate increases 1.8 percentage points on amount of taxable income between $250,000 and $500,000, 2 percentage points on amount above $500,000 for households. For individual filers, the rate increases begin at $125,000 and $250,000 respectively. Eliminates income taxes on the first $2,400 of unemployment benefits received in 2009. Raises estimated $472 million to provide funds currently budgeted for education, health care, public safety, other services.^{[4] [5]}

• No vote: “No” vote rejects tax changes on incomes at and above $250,000 for households, $125,000 for individual filers. Rejects tax exemption for first $2,400 of unemployment benefits received in 2009. Leaves amount currently budgeted for education, health care, public safety, other services underfunded by estimated $472 million.^{[4] [5][6]}

Summary

Below is the November 17, 2009 Oregon Legislature final summary of Measure 66.^[5][4]

Under current law, a marginal tax rate of 9% applies to taxable household income over $15,200 (or $7,600 for individual filers),taxpayers may deduct federal income taxes paid, unemployment compensation is taxable. Measure eliminates income taxes on first $2,400 of unemployment benefits received in 2009. For tax years 2009-2011, the measure increases tax rate 1.8 percentage points on amount of household income between $250,000 and $500,000, by 2 percentage points on amount above $500,000 (for individual filers, rate increases begin at $125,000 and $250,000, respectively). For the tax year beginning 2012, the tax rate for households with income above $250,000 (above $125,000 for single filers) will drop to 9.9%. Measure does not increase tax rate on household income below $250,000 (below $125,000 for individual filers). For households with adjusted gross income at or above $250,000 (or $125,000 for individual filers), reduces federal income tax deduction. Raises $472 million to provide funds currently budgeted for education, health care, public safety, other services. Because some state money brings in federal matching funds. Oregon will likely receive more federal money if measure passes than if it fails. Other provisions.

Measure 67

See also: Oregon Measure 67 (2010)

The ballot title reads as follows, as of November 17, 2009:^[7][5][6]

Raises $10 corporate minimum tax, business minimum tax, corporate profits tax. Provides currently budgeted for education, health care, public safety, other services.

• Yes vote: “Yes” vote raises $10 corporate minimum tax, establishes $150 minimum tax for most businesses or minimum tax of approximately 0.1% of total Oregon revenues for some corporations with over $500,000 in Oregon revenues. Raises tax rate some corporations pay on profits by 1.3 percentage points. Increases certain business filing fees. Raises estimated $255 million to provide funds currently budgeted for education, health care, public safety, other services.^{[7] [5]}

• No vote: “No” vote retains $10 corporate minimum income tax, rejects $150 minimum tax, rejects raising corporate profits tax, other changes. Leaves amount currently budget for education, health care, public safety, other services underfunded by estimated $255 million.^{[7] [5][6]}

Summary

Below is the November 17, 2009 Oregon Legislature draft summary of Measure 67.^{[7] [5]}

Under current law, corporations conducting business in Oregon pay $10 minimum income tax; tax has not changed since 1931. Some corporations pay a profits tax of 6.6%. All other businesses pay no minimum or profits tax. Beginning in tax year 2009, the Measure increase $10 minimum corporate tax to $150; some corporations with over $500,000 in Oregon revenues will pay minimum tax of approximately 0.1% of Oregon revenues. Limits tax to $150 for S corprations and partnerships. Sole proprietors are not impacted by this measure. Raises tax rates some corporations pay on profits by 1.3 percentage points until 2011; increase then drops to 1 percentage point and as of 2013, applies only to profits over $10 million. Corporations pay minimum tax or profits tax, not both. Increases filing fees by $50 for Oregon businesses, by $225 for out of the state business. Raises estimated $255 million to provide funds currently budgeted for education, health care, public safety, other services. Because some state money brings in federal matching funds, Oregon will likely receive more federal money if measure passes than if the Measure fails. Other provisions.

Tax details

House Bill 2649

House Bill 2649 would:^[8]

• Raise marginal taxes to 10.8% on those making more than $125,000 as an individual (or $250,000 as a couple).
• Raise to 11% the tax rate for those making more than $250,000 as an individual (or $500,000 as a couple).
• This tax would end in 2013.

Impact

According to the Legislative Revenue Office about 2.5% of the state's income tax filers would be affected, should the tax hike be approved.^[9]

House Bill 3405

HB 3405 would:^[10]

• Increase the minimum tax for corporations from $10 to $150.
• Base the minimum tax for a business on its revenue, up to a $100,000 minimum for a business grossing $100 million or more.
• Increase the tax rate by .3% for income over $250,000.
• This tax would go into the state's general fund for four years. It would then be allocated to the state's rainy day fund.

Impact

The corporate tax increase, according to state officials, would impact 33,600 of the state's corporations who currently pay corporate tax. However, owners of approximately 400,000 other businesses (which include sole proprieterships, limited liability partnerships and S corporations) will not only pay a personal income tax but also, depending on status, pay a $150 minimum corporate tax.^[9]

Opponents of tax hike

Opponents of the Kulongoski tax hike has organized into a group called Oregonians Against Job-Killing Taxes.

Groups opposing the hike also include:

• Americans for Prosperity. This group's Oregon communications director Matt Evans said that his group has been contacting its 13,000 members in the state to ask them to each commit eight hours to circulating petitions to place the tax hike measures on the ballot where voters can make the final decisio on them.^[2]

• FreedomWorks, whose director Russ Walker said his Oregon group is "prepared to spend $500,000 or more to gather signatures".^[2]

• The state Republican Party. Bob Tiernan, chairman of the party, said, "This is the worst time to be raising taxes on business."^[11]

• The Oregon Farm Bureau Federation. According to agricultural businesses the tax hikes, if approved by voters in January, is essentially double taxation. According to business owners after paying a corporate tax earnings would be taxed again as personal income.^[12]

Prior to Gov. Kulongoski signing the tax hike into law, opponents opened conversations with a firm called Vote Oregon. Vote Oregon is owned by Kevin Mannix, a former gubernatorial candidate and legislator, Russ Walker, the head of FreedomWorks in Oregon, and Ross Day, a Salem attorney. If hired, Vote Oregon is said to be in charge of gathering signatures for the referendum.^[13]

Chief petitioners

See also: Chief petitioner

• Sharon Livingston and John Thomas are the chief petitioners for the referendum effort aimed at repealing HB 2649.
• Sharon Livingston and Brent DeHart are the chief petitioners for the referendum effort aimed at repealing HB 3405.

Arguments

According to opponents of both tax hikes:^[14]

• the taxes "target small and family businesses, the engine of our economy. They target the middle class, and those who need the most help today, family owned businesses who are already having a hard time staying afloat and paying their employees." In other words, the groups argue that the higher taxes on businesses will reduce employment, thus harming the middle-class employees.^[9]
• they are opposed to the tax hikes because of how they impact sales
  • "If you had simply been talking about income increase...of a temporary basis, that is something we could have discussed and probably lived with...Most business are just barely hanging on right now. If you’re taxing business activity, you’re taxing money that ain’t there," said Jon Chandler, who represented Oregonians Against Job-Killing Taxes at a November 2009 Associated Oregon Counties convention.^[15]

Donors

As of November 19, 2009 Oregonians Against Job-Killing Taxes has reported a total of $1.44 million in contributions and $421,552 in the bank.^{[16] [17]} In August 2009 they reported a total of $750,000.

Below is a chart that outlines major cash contributions to Oregonians Against Job-Killing Taxes:^[18]

Contributor	Amount
Oregon Bankers Association[19]	$100,000
Weyerhauser Company[19]	$50,000
Associated Oregon Industries PAC[20]	$27,500

Supporters of tax hike

Besides Gov. Ted Kulongoski, supporters of the $733 million tax hike include:

• Our Oregon. This group is organizing an effort to support the tax hikes. Kevin Looper, a spokesman, said, "The overall campaign can be succinctly summarized as greed vs. need."^[11]
• Former Gov. John Kitzhaber announced in September 2009 that he supports the tax hikes. Kitzhaber, who is a potential candidate for governor in 2010, said,"I don't see any positive outcome from this ballot measure fight. We are going to create enormous divisions and polarizations between business and labor, which are two of the key coalitions that have got to come together if we are going to come out of this recession whole."^[21]
• Defend Oregon is the main organizer for the "Yes on 66 & 67" campaign.

Arguments

According to supporters of both tax hikes:^{[22] [14]}

• 97.5% of taxpayers will NOT see their taxes increased
• the taxes protect about $1 billion in services, such as: education, health care and public safety
• the taxes will preserve class size, preserve jobs, provide health care through the Oregon Health Plan
• will help protect those "hit the hardest - seniors, children and the unemployed" but the state's economic crisis
• with the proposed corporate tax Oregon will have the 5th lowest corporate taxes
• partnerships, LLCs, LLPs and S corporations will pay a flat $150 corporate minimum
• sole proprietorships will continue to pay $0 in corporate taxes

Donors

As of November 16, 2009 Defend Oregon has reported a total of about $151,000.^[20]

Below is a chart that outlines major cash contributions to Defend Oregon:^[23]

Contributor	Amount
Service Employees International Union Local 503[17]	$75,000
American Federation of Teachers[17]	$50,000
Oregon Health Care Association[17]	$25,000
Nurses United Political Action Committee[17]	$10,000

Ballot title controversy

A special panel was organized to write the ballot titles for Measure 66 and Measure 67. The panel consisted of four Democratic members and two Republicans. However, some Oregonians said that they are worried about possible ballot title bias. Democratic legislators have in the past spoken in favor of the tax increases and argue that they are necessary to balance the state budget.If a problem does arise once the ballot titles have been written the language can be appealed to the Oregon Supreme Court.^[24] Senate President Peter Courtney said, "The committee will write a ballot title that will make it clear to voters what they are voting on."^[25]

Measure 66: Some of the specific concerns include:^[26][27]

• allegations that the ballot titles were not written in an impartial manner
• "important information that might reflect negatively on the tax increases" was omitted
• uses "poli-tested words" and "speculative language" aimed to persuade voters to vote in favor of the measure^[28]

Measure 67: Some of the specific concerns include:^[29][30]

• allegations that the ballot titles were not written in an impartial manner
• "important information that might reflect negatively on the tax increases" was omitted
• uses "poli-tested words" and "speculative language" aimed to persuade voters to vote in favor of the measure^[28]

Legal challenge

The ballot title issue went before the Oregon Supreme Court after a complaint against the ballot language was filed. Pat McCormick argued that the title did not adhere to the usual 15-word limit. Additionally, McCormick argued that the title did not state "how the Legislature will react to its defeat." However, Geoff Sugerman, spokesperson for House Speaker Dave Hunt, said that the title language is accurate, "fair and straightforward."^[28]

Court ballot title ruling

On November 13, 2009, the Oregon Supreme Court slightly modified the ballot title wording of two 2010 tax hike referendum measures - Measure 66 and Measure 67.^[31] The main point of argument surrounded a sentence included in both ballot titles: "Maintains funds currently budgeted for education, health care, public safety, other services." Tax opponents argued that the sentence was pure "speculation" and should be omitteded from the title, however, the court ruled instead to replace the word "maintains" with "provides."^[32] Additionally, the court changed the wording of the "no vote" description to read: "Leaves amount currently budgeted for education, health care, public safety, other services underfunded." Previously, it had read, "Reduces funding currently budgeted for education, health care, public safety, other services by estimated $472 million."^{[6] [33]}

Opponents question constitutionality

On November 12, 2009 John DiLorenzo, attorney representing tax hike opponents, requested a preliminary injunction on Measures 66 and 67. DiLorenzo argued that the ballot titles, written by a special legislative panel, are unconstitutional. Specifically, DiLorenzo questioned if the legislature had the power to write the ballot titles, a job that is usually performed by the attorney general.^[34]

Judge dismisses injunction

On November 17, 2009 Marion County Circuit Judge Paul Lipscomb dismissed a proposed preliminary injunction against both Ballot measure 66 and 67. According to the judge's ruling, the Oregon Supreme Court's November review of the ballot titles was sufficient to ensure the legality of the proposed ballot measures scheduled to appear on the 2010 ballot.^[35]

Referendum law controversy

In a controversial move on June 24, 2009 the legislative Democratic lawmakers proposed an amendment to an election bill that would change wording to state referendums. In the case of the Oregon Tax Hike Referendum, a "yes" vote would mean rejecting a tax hike and a "no" vote would mean a vote to raise taxes. House Democratic leader Mary Nolan believes that this change of wording to statewide referenda will clarify to voters the issue they are voting on

According to ballot measure campaign consultant Mark Nelson, who opposes a tax increase: "It’s outrageous. It basically is trying to, in effect, trick the voters."^[36]

It is unclear when the change to the election bill will appear on the House floor according to reports.

Path to the ballot

The veto referendum process laid out in the Oregon Constitution sets out these rules:

• Groups who oppose a bill passed by the state legislature have a 90-day window from the time that the legislature adjourns to collect 55,179 signatures to force a statewide vote of the people on the bill they oppose.^[37]
• The Oregon legislature is currently set to adjourn in "late June".^[38]
• That means tax-hike opponents would have until late September to collect signatures.
• Election officials in the state then would have 30 days to verify the signatures and schedule a vote. The earliest that vote could be held is in January 2010.
• The tax hikes would not go into effect while the vote is pending.

Signatures to qualify the measure for the January 2010 ballot are expected to be submitted Friday, September 25, 2009. However, referendum supporters announced that as of September 18 they have already stopped collecting signatures. Signature gatherers must collect a minimum of 55,179 valid signatures to place the measure on the ballot. The group has not yet released how many signatures they have collected but said they have "a comfortable margin."^[39]

Filed signatures

On Friday, September 25, 2009, referendum supporters filed 129,500 for the personal income tax measure and 126,183 signatures for the corporate measure, according to referendum supporters.^[40] State elections officials have exactly 30 days to verify the signatures.^[41]

See also

Tax hike supporters

Tax hike opponents

Articles

External links

• Oregonians Against Job-Killing Taxes - Campaign finance information
• Defend Oregon - Campaign finance information

Measure 66

Measure 67

Additional reading

Editorials

References

v • d • e 2010 ballot measures States Alabama • Alaska • Arizona • Arkansas • California • Colorado • Florida • Idaho • Illinois • Louisiana • Maine • Maryland • Massachusetts • Michigan • Minnesota • Mississippi • Missouri • Montana • Nebraska • Nevada • North Dakota • Ohio • Oklahoma • Oregon • South Dakota • Utah • Washington • Wyoming Petition deadlines Petition drive deadlines, 2010 • Polls, 2010 ballot measures

	v • d • e State of Oregon Salem (capital)
Ballot Measures	Ballot measures | List of ballot measures by year | List of ballot initiatives | School Bond Issues | Procedures for qualifying an initiative | Amending the constitution | History of direct democracy | Campaign finance requirements | Vote fraud |
Government	Oregon State Constitution | Governor | Attorney General | Secretary of State | House of Representatives | Senate |
Judiciary	Oregon Supreme Court | Court of Appeals | Circuit Courts | Judicial Nominating Commission | Judicial news |
Transparency Topics	Public Records Law | Transparency Checklist | Government corruption reports | Transparency Legislation | Open Records procedures | Transparency Advocates | Transparency blogs | State budget | Taxpayer-funded lobbying associations |
Divisions	State | List of Counties | List of Cities | List of Towns | List of School Districts | Evaluation of county websites | Evaluation of city websites | Evaluation of township websites | Evaluation of school district websites |