Oregon Legislature also considering Cap & Trade, workplace harassment, marijuana use bills
State Director Anthony Smith reports on the whirlwind of activity in Salem.
Only two weeks into the 2019 Oregon legislative session and activities are already a whirlwind.
The House Committee on Revenue and the Senate Finance and Revenue Committee are expected to tinker with Oregon’s existing tax structure, however, any big changes will likely originate in the newly formed Joint Committee On Student Success Subcommittee On Revenue. There are no bill numbers assigned to this subcommittee yet, but if the Legislature is going to develop a big, new tax to fund education, this will be the committee to watch.
Repeal of the Small Business Tax Cut?
One tax reform bill small business is keeping an eye is House Bill 2743. It proposes changes to Oregon’s Pass-Through Entity (PTE) rate structure, commonly known as the Small Business Tax Cut, which came out of 2013’s Special Session Grand Bargain. Tax-and-spend legislators have been trying to undo this policy since it first took effect in 2015 with multiple attempts to restrict its future use—or repeal it altogether.
Those efforts have proven to be a heavy lift, even for legislative leadership in search of revenue-raising opportunities and might be even tougher politically now that Gov. Kate Brown called a special session in 2018 to expand the policy to include sole proprietors. HB 2743 is an interesting approach. It keeps the policy in place, and it excludes income in excess of $500,000 from the lower rates, but it actually lowers the rate from 7 percent to 6 percent for the first $75,000 and from 7 percent to 6.5 percent for income between $75,000 and $150,000. A bracket of 7.2 percent for income between $150,000 and $500,000 is also included, but all income above $500,000 reverts back to the standard 9.9 percent rate.
No revenue impact statement has yet been generated by the Legislative Revenue Office, but NFIB is informed this proposal is designed to be revenue-neutral. Another feature of the bill is a change to the employment requirements. Instead of needing (essentially) a year-round, full-time employee, any combination of employee hours totaling 1,000 for the year would qualify the PTE owner(s) to opt-in to the policy. Undoubtedly, business owners with modest incomes would receive a tax cut, while higher income earners would see a tax increase. This bill isn’t scheduled for a hearing yet, but NFIB would be surprised if it doesn’t see it pop up sooner or later.
Cap & Trade
The big news from the legislative week ending February 1 was the release of the Cap & Trade bill, which will reportedly end up being assigned as House Bill 2020 (though it is not yet available in Oregon Legislative Information Service). NFIB has joined the Partnership for Oregon Communities, a group of chambers and associations with serious concerns about Cap & Trade. The bill was presented Friday, Feb. 1 and shortly thereafter, PFOC released the following statement, which nicely summarized what (little) we now know about what the program would actually look like:
Salem, Ore. – Partnership for Oregon Communities released the following statement following the conclusion of today’s hearing on the cap and trade bill:
“The more we learn about this legislation, the more questions and concerns we have. More specifically, we heard a lot of concerns from lawmakers today about the role of state bureaucrats in the implementation and oversight of this new program.
“As drafted, the bill would give the yet-to-be established Carbon Policy Office wide latitude over major segments of the Oregon economy and billions of dollars. In other words, unelected bureaucrats would be able to raise taxes and utility rates without legislative oversight and without approval from Oregon voters. Lawmakers must pursue amendments that restore strong legislative oversight over this tremendously complex program. There’s simply too much at stake for lawmakers to punt so much power to the bureaucracy.”
This statement may be attributed to Preston Mann, spokesperson for Partnership for Oregon Communities.
The bill will undoubtedly go through several revisions before it’s voted on in either chamber of the Legislature, but before that the Joint Committee on Carbon Reduction will take public testimony Friday, February 15 at 1 p.m. and Monday, February 18 at 5 p.m. All interested Oregonians who are concerned about rising energy prices should attend one of these public hearings. Written testimony can also be sent to the committee once the bill receives its bill number, which will likely happen February 5.
Other Bills
A few other worrisome bills that NFIB will be working on over the next week or so include:
- Senate Bill 164 – Would give the Oregon Bureau of Labor and Industries authority to enforce compliance with the OregonSaves program and impose civil penalties on businesses that are not in compliance.
- Senate Bill 379 – Would require employers to treat marijuana use the same as tobacco use, effectively disallowing most drug-free workplace policies.
- Senate Bill 726 – This workplace harassment measure would extend personal liability to business owners when their employees engage in illegal workplace conduct.
Worth a Read
Sen. Betsy Johnson (D-Scappoose), whom the NFIB Oregon PAC endorsed for re-election last year, wrote a guest editorial for Pamplin Media Group on the difficulties of coming up with a balanced state budget for the state.
Excerpt
“In one day last month in Salem, state Sen. Steiner-Hayward and I sat in a conference room and heard budget requests from various groups. In total, on that one day, those requests added up to about $750 million. That’s three-quarters of a billion dollars. In one day. So many people want so much stuff, and they want the government to pay for it. To give you an example of how this translates in the budget process, representatives of a beloved Portland nonprofit came to us and asked for $500,000 to fix their boiler.”
Previous NFIB Reports from the Capitol
January 18—Oregon State Legislature Opens 2019 Session, January 22
