Debate on Oregon's Corporate Tax Hike Cancelled Amid Accusations of "Bullying"

UPDATED: Oregon League of Conservation Voters says Intel yanked its support over the proposed $3 billion tax increase known as Measure 97.

The cancellation of a late-July political debate that few even knew existed might seem insignificant—until you consider why one side pulled out.

Our Oregon, the labor-backed advocacy group that is supporting Ballot Measure 97—a $3 billion-a-year tax hike on corporations—was scheduled to debate opponents of the tax increase July 28 at Portland's hippest new venue, Revolution Hall.

But last Friday, July 15, Our Oregon executive director Ben Unger informed the co-organizers, the City Club of Portland, that his group was pulling out of the event.

Unger's objection: The Standard, a large insurance company with its headquarters in Portland, was sponsoring the event.

The Standard is a sponsor of the "Big Idea" series presented by The Oregonian, of which the Measure 97 debate was to be part.

The Standard is also a vehement opponent of Measure 97, previously known as Initiative Petition 28 (or IP 28, for short).

Unger says it's the company's tactics, not its political views, that caused Our Oregon to walk.

"The Standard is making threats to local nonprofits about future pledges should those groups choose to support our measure," Unger says. "That's bullying behavior."

The Standard's top government affairs official, Justin Delaney, acknowledges the company threatened in June to withhold support from Children First for Oregon, a Portland nonprofit.

"We've been a supporter of Children First for several years and were disappointed to learn that its board voted to support IP 28," Delaney says. "This organization receives philanthropic support from a number of large Oregon companies, including the Standard, that will be severely impacted by IP 28. Yet, we had no opportunity to share our perspective with the board or staff until after that group made its decision."

Children First for Oregon executive director Tonia Hunt says the nonprofit "heard arguments from both proponents and opponents of IP 28" before deciding to endorse the tax measure.

Delaney says the Standard relented last week, and has not reduced or cut funding to any other nonprofit.

"After thinking about it, we decided that the reasons for past support are more important than transitory political disagreement and reinstated our contribution early this week," he says.

Delaney says Our Oregon is overreacting by pulling out of the debate. He says his company made no attempt to influence the event.

"Our sponsorship of the Big Idea series is just that—funding the yearlong series to encourage debate about important civic issues," Delaney says. "We have no role in topic selection and don't participate in the debate."

Delaney says that just as citizens need to hear both sides of the issue, nonprofits ought to give their corporate partners a hearing before reflexively supporting Measure 97.

Measure 97 has the potential to divide the state more bitterly than did Measures 66 and 67, smaller income tax hikes voters passed in 2010.

Many of the state's nonprofits support Measure 97, which would impose a 2.5 percent tax on a corporation's Oregon sales over $25 million, because the new tax would provide more money for education and social services. But that money, of course, would come from companies that support those same nonprofits.

Although the proposed tax increase is aimed at large, out-of-state companies, Oregon-headquartered companies, such as the Standard, would feel considerable pain if it passes.

The Standard is among the biggest contributors to Defeat the Tax on Oregon Sales, the political action committee opposing Measure 97, having contributed $95,000 so far. The opposition campaign reported more than $5 million in contributions last week, and some of its members say they expect to raise $20 million.

Like other big companies headquartered in Oregon—although the Standard was recently acquired by the Japanese insurer Meiji Yasuda Life for $5 billion in cash, it will remain here—the Standard faces a big tax bill if Measure 97 passes.

An analysis by the state economist's office found that about 230 Oregon-headquartered companies would be affected by the new tax. The average tax bite would go from $200,000 to $2.3 million—an 11-fold increase. Big insurers like the Standard would be hit even harder—the analysis projected the 20 big insurers located here would see their average tax go from $200,000 to $3.5 million annually—a nearly 18-fold increase.

Unger claims other large corporations that oppose Measure 97 are rattling their piggy banks at nonprofits as well, although most nonprofits are afraid to speak up.

One nonprofit leader willing to talk is Doug Moore, executive director of the Oregon League of Conservation Voters.

Moore says he met with Jill Eiland, Intel's director of government affairs, on March 17. Intel has been a longtime sponsor of OLCV's annual fundraising dinner, Moore says, providing amounts ranging from $2,500 to $25,000 in previous years.

"They've been very generous," Moore says.

But Moore says Eiland had a different message this year: If the league was even thinking about supporting what would become Measure 97, Intel would not support this year's event.

Although OLCV has not yet taken a position on the measure, Moore says he told Eiland there was no chance the league would oppose it. For the first time in many years, Intel provided no funding for OLCV's dinner, which occurred May 13.

"I was shocked," Moore says. "I would not have expected that from Intel. But they made it clear that OLCV would be punished for not opposing the tax—or even being involved with Our Oregon."

Intel did not respond to WW's requests for comment.

Unger says Intel is playing dirty pool.

"With state funding shrinking, many of these nonprofits have no choice but to fill the service gap by seeking funding from the very corporations that are not paying their share in taxes," Unger says. "That any company would use that leverage to attempt to silence nonprofits is unacceptable."

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