Republicans want deal before returning to chamber
State Director Anthony Smith reports from Salem on the small-business agenda for the legislative session as of May 10
It’s now Day 109 of the 160-day Oregon Legislative Session, and the stakes have never been higher.
- “Corporate” Activities Tax Passes the House: House Bill 3427, the public education funding bill that imposes a new “Corporate” Activities Tax passed the House on a party-line vote May 1. Taxing Oregon sales is a regressive approach that has already been rejected by Oregon voters – and just like all gross receipts taxes, taxes would be owed whether a company makes a profit or not, ensuring that the state gets paid before anyone else. More below.
- Senate Republicans Walk-Out: In response to the passage of HB 3427, and the way the “Corporate” Activities Tax was rushed through committee and passed in the House with no attention paid to structural cost-drivers like PERS, Senate Republicans have refused to show up for floor sessions. This tactic denies the Senate a quorum (20 senators must be present), keeping the Senate from conducting its business. More below.
“Corporate” Activities Tax Passes the House
After a 6-hour floor session on May 1, the Oregon House of Representatives passed HB 3427, the education funding bill that includes the creation of a new “Corporate” Activities Tax. This new tax is a gross receipts tax on all business entities – not just “corporations.” Partnerships, LLC’s, and sole proprietorships are also subject to the $250 + 0.57% tax on income in excess of $1 million per year.
The final vote was along party lines. All Democrats present voted yes. All Republicans present voted no. One Democrat (Rep. Jeff Barker) and one Republican (Rep. Sherrie Sprenger) were excused, resulting in a 37-21 vote, just one vote more than the three-fifths supermajority vote required to raise taxes. This Oregonian/OregonLive story has more information.
Many House Republicans made floor speeches in support of small business and against the new tax, including Rep. Daniel Bonham, Rep. Lynn Findley, Rep. Shelly Boshart Davis, Rep. Christine Drazan, Rep. David Brock Smith, Rep. Kim Wallan, Rep. Greg Barreto, Rep. Denyc Boles, Rep. Jack Zika, Rep. Cheri Helt, Rep. Gary Leif, and Rep. Carl Wilson. Several other House Republicans yielded their time so that this group of lawmakers could finish their speeches.
It’s disappointing that the House passed the bill, especially with so many other bad bills still alive and in play. In previous sessions, a bill of this magnitude would have been voted on toward the end of the session, essentially running out the clock on other big-ticket pieces of legislation.
Senate Republicans Walk-Out
Just when it seemed like the “Corporate” Activities Tax was going to be approved by the Senate just as fast as it was passed out of the House, Senate Republicans made a bold move and didn’t show up for the vote on Tuesday, May 7. As reported by the Oregonian/OregonLive, unless the majority party agrees to certain terms, they don’t plan on coming back anytime soon.
Under the Oregon Constitution, the Senate may only conduct its business when two-thirds of the members of the Senate are present. Since Democrats hold 18 seats and Republicans hold 12, at least two Senate Republicans must be present in order for the Senate to vote on any measure. That didn’t happen the next day either – or for the remainder of the week. The Senate is now adjourned until 11 a.m., Monday, May 13. Negotiations are expected to continue over the weekend – we’ll see if the Republican show up then, and if so, what they got in terms of a deal.
Senate Republicans are demanding that the Democrats agree to kill a number of “bad” bills, including Cap & Trade, and that HB 3427 be sent back to committee for further work (and a number of other requests) before they will agree to return to the Capitol.
In a statement by Senate Republican Leader, Sen. Herman Baertschiger, Jr. earlier this week, he said,
“Education is a top priority for Republicans, and I am confident we can fund our schools and solve the state’s PERS crisis without crucifying businesses, like HB 3427 will. The reason we are taking the stance of walking out is because it is the only tool we have to draw attention to the injustices of this legislation on Oregon voters and businesses.”
In other activities.
NFIB’s Oregon Small Business Day at the Capitol
NFIB State Government Relations Executive Director Tim Goodrich and NFIB Small Business Legal Center Senior Staff Attorney Luke Wake kicked off the day’s activities Then, NFIB Oregon State Director, Anthony Smith and NFIB member (and fellow lobbyist) Roger Beyer led a panel discussion on the top issues in the 2019 Oregon Legislative Session, including Paid Family & Medical Leave, Cap & Trade, and the “Corporate” Activities Tax.
Rounding out the morning program, NFIB Senior Grassroots Manager, Stacy Jenkins gave the group an update on NFIB’s newest grassroots advocacy tools, including the new NFIB Engage App for your smartphone.
Following lunch, NFIB Division Manager Ron Dickison gave an update on efforts to grow the membership in Oregon, and then we received a visit from our special guest speaker, House Republican Leader (and NFIB member) Rep. Carl Wilson. He shared with us the challenges of being out-numbered in the Legislature – and the political realities of fighting off so many threats to Oregon’s economy, but he also expressed his appreciation for NFIB and his resolve to keep standing up for our small businesses. He and his caucus proved that just days later during a six-hour floor session on HB 3427 (the “Corporate” Activities Tax).
In the afternoon, NFIB members and staff spent time lobbying legislators on our key issues, including HB 3427. We hit every office in the Capitol over the next two hours, making it crystal clear to lawmakers where NFIB stood (and continues to stand) on the proposed new tax.
Previous Reports from the State Capitol
