MAY 2007: CAPITOL GAINS, WHO'S WINNING AND LOSING IN SALEM
By
Oakley Brooks
|
What’s waiting in the wings?
The Oregon Legislature heads into what should be its final two
months, with leaders calling for a late June adjournment. A few
business-related bills flying just below the radar could pop up
for floor votes in the last wave of activity.
Keep an eye on the corporate minimum
Business interests successfully kept an increase in the
corporate minimum tax out of the rainy-day fund legislation,
which Gov. Ted Kulongoski signed into law in March. But
don’t count the corporate minimum raise dead yet: Both
parties support it. House Minority Leader Wayne Scott (R-Canby)
pairs the tax hike with his desired reduction in estate taxes
(or, if you prefer, death taxes). Democrats would still like to
deliver a corporate minimum hike to show they’re willing
to stand up to tax dodgers. And the most recent proposal also
raises $150 million in new revenue.
Lawmakers think voters stand behind them on this issue. Most
Oregonians still remember the $10 minimum tax that
billion-dollar outfits Portland General Electric and Louisiana
Pacific (then headquartered in Portland) paid during the last
recession.
Business groups realize there’s an image problem with
the current $10 minimum, paid in years that companies report a
loss. “We need to reverse this perception that business
isn’t paying its fair share of taxes,” says Bernie
Bottomly, of the Portland Business Alliance.
The most recent corporate minimum proposal, which appeared
briefly in the rainy-day fund bill, would have set the minimum
at $50,000 for companies with revenues over $25 million. And
business groups worry that companies with high-cost inventory
but low margins would be hit hard by this — potentially
paying more in lean years to meet the corporate minimum than
they pull down in profits. According to the PBA, 640 companies
are projected to post revenues of $25 million or more in 2007
and would pay the minimum. Although neither the PBA nor
individual industry groups have crunched the numbers on who
these companies are, anecdotal evidence suggests they are
dealers in high-priced inventory — jewelry, cars and
machine tools, among others. At least 150 Oregon car dealers
take in revenues of $25 million or more. “Many of these
guys aren’t making much money,” says Greg
Remensperger of the Oregon Automobile Dealers Association.
“That top amount is just punitive if you lost money that
year,” Bottomly adds. “There’s room to make a
change on the $10 minimum but we’re not interested in
discussions about another $150 million in revenue.”
Microbrews, macrotax?
This year’s Legislature has the best chance of any in
recent memory of passing a beer tax, and the state’s
storied microbrewers are nervous, even though lawmakers are
trying to carve out exceptions for them. The tax hike has
typically died in the House, where the powerful beer and wine
distributors lobby (yes, the one that paid for those Hawaii
trips by legislators) had allies in the Republican majority.
With the Dems in control, at least three bills propose a hike
on beer tax and one includes a new wine tax. The steepest
proposal would move the tax on brewers from less than a penny
per bottle to more than 10 cents. The money raised would be
earmarked for drug and alcohol treatment. That bill, sponsored
by Rep. Jackie Dingfelder (D-Portland) and Sen. Bill Morrisette
(D-Springfield) also leaves small breweries untaxed.
The provision ostensibly avoids harming Oregon’s craft
breweries, which are now a $2 billion-a-year economic engine
and have turned beer into a tourist draw. But craft brewers are
still adamantly against this bill. Oregon’s three biggest
craft brewers, Widmer Brothers Brewing, Deschutes Brewery and
Pyramid’s Portland brewery, all fall above the
bill’s small-brewery threshold and would be subject to
the new tax. More importantly, any tax — regardless of
the carve-out for craft brewers — would raise the overall
beer price in Oregon and ultimately hurt local breweries, says
Kurt Widmer of Widmer Brothers. “Wholesalers and
retailers will spread the cost increase over all their
products,” Widmer says. “There’s really no
way to protect us.”
Despite the stakes in this fight, Widmer and other craft
brewers have not hired lobbyists, deciding to make personal
visits to Salem. “I think we’re our own best
lobbyist on this one,” Widmer says.
Tapping the Columbia
Two months ago, we wrote about several efforts to get more
water out of the Columbia River for Eastern Oregon farmers
[WATERWORKS, FEBRUARY]. Those pieces of legislation hit some
early speed bumps: The Umatilla tribes, the governor and an
array of environmental groups oppose the “Oasis
Project” bill, which calls for removing an extra 500,000
acre-feet of water year-round, including during salmon runs.
Three water-related bills from Sen. David Nelson, the GOP
farmer from Pendleton, were held up behind renewable energy
legislation. Nelson also supports the Oasis bill. The tribes
and the governor support the Nelson effort that seeks
authorization to fund a comprehensive water study. The Oasis
bill was heard by the House Energy and Environment Committee in
mid-April, which forwarded it to a work session, and
Nelson’s water study bill moved to Way and Means. Keep
your water map handy as these issues play out.
Have an opinion?
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