Jeff Drew

CHANGING THEIR TUNE

Last year, all Oregon business leaders could talk about was compromise. In their efforts to dismantle Measure 97, they insisted they wanted to sit down and discuss possibilities for new taxes. Now that the measure’s dead, they’re not talking. Here’s a partial look at what local business leaders said before and after Measure 97’s defeat.


THEN:

“We have told the governor to set the table. We will be there prepared to help write the solution. –Sandra McDonough, President and CEO of the Portland Business Alliance, to the Business Tribune in September 2016

“We’ve told the proponents and we’ve told the governor just recently that we would absolutely sit at any table. If they will remove this initiative from the ballot, we will get right back to the table.” –Ryan Deckert, Oregon Business Association president, Washington County Affairs Forum, March 7, 2016


NOW:

“A longer-term look at structural tax reform can begin after the [legislative] session adjourns.” —McDonough on May 2, according to the Oregonian

“We definitely think the decisions will be made by elected leaders at the Capitol on this.” –Deckert in April, according to the Oregonian

“It’s up to legislators to develop the proposals for groups like ours to react to. It’s really up to them.” –Pat McCormick, business lobby spokesperson whom Deckert referred the Mercury to for this story

ON THE MORNING of Tuesday, May 2, about 30 parents and students stood outside the Portland Business Alliance’s (PBA) annual meeting at the Oregon Convention Center, protesting what they say is the complete inaction of Portland business leaders to help solve the state’s ongoing budget crisis.

“There’s been a long-growing disinvestment in public service and public schools,” says Sunny Petit, a Portland Public Schools (PPS) parent and organizer of the small protest, which took place as local business honchos were listening to former Republican US Senator Gordon Smith speak inside. “We’re not affiliated or connected with any group. We just got so frustrated. We’re making phone calls but they’re not hearing us.”

It’s easy to see where Petit is coming from. Half a year after they helped torpedo the corporation-taxing Measure 97, it seems the PBA and other business organizations have lost interest in offering suggestions to solve Oregon’s $1.6 billion budget hole.

If passed, the controversial and perhaps overly simplistic Measure 97 would have ramped up corporate taxes in the state, but would’ve only applied to some companies that have over $25 million a year in Oregon sales. Even so, it could have raised roughly $3 billion every year.

Opponents like the PBA and Oregon Business Association (OBA) pulled out all the stops to fight Measure 97, arguing that profits rather than sales should be taxed, that the tax would jeopardize beloved businesses, and that most of the new corporate taxes would be passed on to consumers.

They also whined endlessly about being left out of the drafting of the measure—promising that, if it were defeated, they’d be ready and willing to negotiate a solution to the budget deficit.

As PBA President Sandra McDonough told the Portland Tribune prior to the November 8 vote: “The day after the election, we will be at the table.”

Six months later, business leaders have done little to usher forth progress.

Ben Unger—head of Our Oregon, the coalition largely responsible for Measure 97—is frustrated but not surprised by the inaction. “In the realm of businesses opposing good ideas, this is one of their favorite tactics,” he says.

Unger insists that his group and other proponents of Measure 97 have been extremely open to discussing spending cuts alongside new taxes.

“I don’t think they expected us to be so willing to actually participate,” he says. “So now they find themselves in this place and they realize they have nothing to say.”

Leaders at the PBA and OBA wouldn’t talk to the Mercury directly. Instead they pointed us to Pat McCormick, a PR representative.

McCormick says that it’s not the responsibility of businesses to draft a budget proposal. And while that’s true, it contradicts the spirit of collaboration those businesses were preaching before Measure 97 was voted down.

“We have told the governor to set the table,” McDonough said last September. “We will be there prepared to help write the solution.”

Now that the table is set, though, the tone has changed.

“It’s up to legislators to develop the proposals for groups like ours to react to,” McCormick says. “It’s really up to them.”

Two tax proposals have been unveiled in recent weeks—and the business community has not issued statements on either. A proposal released by House Speaker Tina Kotek (D-Portland) would kick $1 billion in new investments to Oregon K-12 schools by raising corporate taxes (under a similar but different formula than Measure 97).

The proposal has been applauded by many: K-12 and higher education officials, religious leaders, small business groups, and even Milwaukie Mayor Mark Gamba have released statements strongly supporting the proposal.

McCormick says the business community is open to discussing increasing taxes on businesses, but did not speak to this proposal directly. He says leaders should first be focused on growing the economy and reducing expenses for public employee pensions and health care.

The other budget proposal, which came out of a joint legislative committee led by state Senator Mark Hass (D-Beaverton), would also tax businesses’ “gross receipts,” not their profits. (Advocates say taxing sales stops businesses from fudging their actual profits to achieve tax savings.)

Not everyone in the business community is silent. Before lawmakers even introduced a single tax proposal this year, a group called Priority Oregon put out television ads attempting to sour the public on the notion. The ads claimed that any tax on business sales is a “hidden sales tax” that would largely affect consumers.

Cost-containment has been one of the main sticking points in this debate. Many business leaders maintain that they will not discuss increasing taxes until they’re assured the state will rein in spending.

“First you get your hands around the spending, and that opens the door for revenue talks,” Ryan Deckert, president of the OBA, told the Oregonian in March.

It’s important to note that there’s still time in this year’s legislative session. Though business groups have been silent on Kotek’s proposal so far, Unger is hopeful it will spur business leaders to meaningful action before the session ends in July.

“I’m not so pessimistic,” he says. “I think [business leaders] are going to have a hard time crying in the corner this time.”