WW's Fall 2016 Endorsements: State Measures

Putting pollsters and political strategists in charge of Oregon’s tax policy is a bad idea.


Measure 94

No mandatory retirement age for judges


Don't trust anyone over 75.

That's the motto of the Oregon Constitution, thanks to a peculiar and arbitrary rule that state judges must retire after their 75th birthday.

State lawmakers want the clause stricken from the constitution, and they're right. Wisdom doesn't have an expiration date. We don't like term limits—and we sure don't like age discrimination. Let's put this antiquated requirement out to pasture.


Measure 95

Public university investments


This measure asks voters to make a technical fix to legislation passed three years ago. In 2013, the Oregon Legislature broke up the state's centralized university system, giving each of the seven public universities control over its own governance and finances, including investing. Lawmakers wanted universities to be able to invest in the stock market. But it's unclear whether the Oregon Constitution prohibits that. This limited fix would end the confusion and allow universities to manage their finances responsibly.


Measure 96

Lottery funding for veterans


This measure, championed by state Rep. Julie Parrish (R-West Linn), would amend the Oregon Constitution to direct 1.5 percent of Oregon Lottery revenues to veterans' services.

The Legislature unanimously voted to refer this measure to voters for a couple of reasons: First, more than two-thirds of the state's 350,000 veterans are not receiving the federal services to which they are entitled. Second, it can take up to three years for them to connect to such services.

Although we are reluctant to amend the state constitution, there are already constitutional lottery set-asides for schools, parks and salmon. The measure would shift about $9 million a year away from discretionary lottery expenditures such as economic development and college athletics. That's about twice what the Oregon Department of Veterans Affairs gets annually now. Veterans deserve more than a hollow "Thank you for your service."


Measure 97

Corporate tax increase


We're convinced of a few things. First, state government could use more money. Education, social services and managing Oregon's rapid growth will require substantial new revenue.

Second, there is indeed a basket of corporate deplorables who unfairly avoid paying their fair share of taxes.

And yet Measure 97 is about as ham-fisted a solution as proponents could have devised. That may be because it was designed by pollsters and campaign strategists rather than economists. Crafting policy this way is hardly good governance, though we certainly understand the emotional appeal of demonizing Walmart, Comcast and Wells Fargo, all likely payers of the tax.

If Measure 97 passes, it would be the single largest tax hike in modern Oregon history. It would take the state's current annual budget of $9.5 billion and increase it by nearly a third, raising $3 billion a year.

It would do so by adding a new tax on C corporations—2.5 percent of their Oregon sales over $25 million.

The state estimates that fewer than 1,000 of the 400,000 businesses in Oregon would pay the tax, and many of those companies are headquartered in other states. (Disclosure: WW's revenues are far too small to be affected by 97.)

On its face, Measure 97 is elegantly designed: Somebody else pays it, and many of those somebodies are large, unloved corporations.

But like a fake Rolex, the moving parts underneath the surface are less elegant.

That's the reason why Gov. Kate Brown waffled for two months on whether to support the measure (she eventually did). It's the reason why moderate Democrats like state Sen. Mark Haas (D-Beaverton), who chairs the Senate Finance and Revenue Committee, and Rep. Jeff Reardon (D-East Portland) don't support the measure. And it's the reason why WW—which supported Measures 66 and 67, the 2010 income tax increases, and earlier this year supported Bernie Sanders in the Democratic presidential primary—cannot get behind Measure 97.

There are a host of reasons why the new tax would be bad for Oregon.

Independent analysts say companies will pass a big chunk of the tax on to consumers, so it is, in effect, a sales tax.

And unlike the conventional sales tax that nearly every other state levies, Measure 97 grants no exemptions for food, medicine or other essential goods. That's a double hit for low-income Oregonians. While market forces would keep some companies from jacking up their prices, others—like utilities—would be able to make customers, no matter how needy, swallow all the costs. And they will.

There's also an issue of fairness. Because the initiative affects only C corps, other companies that are structured differently but have more than $25 million in Oregon sales would not pay one dollar more. Finally, Measure 97 penalizes service businesses, such as the state's thriving software industry. (Because of arcane rules about how companies' revenues are accounted for, service companies are taxed more heavily than manufacturing companies.)

Then consider this: Even some supporters privately concede that the state has no plan for how to spend—or save—such an extraordinary increase in state revenues. That gives the special interests that sponsored the measure—public employee unions—and the special interests that opposed it and would be seeking exemptions—the business lobby—a tremendous advantage over lawmakers.

Putting pollsters and political strategists in charge of Oregon's tax policy is a bad idea. It is our hope that the Legislature, which will probably continue under Democratic control, can craft something better. Tax policy shouldn't fit onto a bumper sticker. Oregon can do better than this slice of populist fantasy.

Measure 98

Career and tech education in high school


Most people agree career and technical education programs are wonderful things. The dismantling of Oregon high schools' automotive shops, metalworking studios and home economics courses, to name a few examples, is a travesty. Their absence leaves countless students without meaningful opportunities for hands-on learning and, for some of those students, without reasons to come to school.

If approved, Measure 98 would direct the state to earmark $800 per public high school student from the general fund, then distribute the cash to high schools that apply for grants to add or expand CTE programs. This money—an estimated $150 million per year—would be on top of what the state already allocates to schools from the general fund. (Portland Public Schools' slice of the pie alone could be as much as $10 million a year.)

Measure 98 seems like a great solution. But it has fundamental flaws, and voters should reject it.

Backers from Stand for Children, a pro-education nonprofit that is often at odds with the statewide teachers' union, say Measure 98 is not dependent on new tax revenue. Instead, backers say, the stream of new funding would come from already projected growth in the state's general fund budget.

This assumption ignores one key fact. Even with the projected revenue growth, Oregon faces a $1.4 billion budget deficit in 2017-19 because spending is also increasing. (Measure 98 has no organized opposition. The Oregon Education Association has remained neutral on the subject.)

We know research shows many positive benefits of CTE programs. What we don't know is whether voters will approve Measure 97's $3 billion-a-year cash infusion. It seems foolish to commit Oregon to spending an additional $150 million a year before knowing whether the state can afford it. In other words, Measure 98 would be an unfunded mandate, taking away from existing priorities.

Until Oregon can reach a reasonable compromise on how to raise tax revenue, we're not going to recommend strict rules about how to slice up the pie. We learned that in home economics.


Measure 99

Lottery funding for Outdoor School


Unlike Measure 98, which rests on the shaky assumption there's enough money to pay for its worthwhile ambitions, Measure 99 comes with more stable funding attached—the Oregon Lottery.

Measure 99 would dedicate $22 million a year in lottery money—about 4 percent of the $550 million the lottery contributes to the state budget annually—to a fund that school districts could tap to pay for a whole week of Outdoor School.

It's not just a nice camp. Outdoor School teaches children lifelong lessons about the natural resources that powered Oregon's growth as a state and are crucial to its well-being now.

Oregon voters approved the lottery in 1984 for the sole purpose of funding economic development projects and creating jobs. Over the years, voters have approved changes that have carved up lottery funds and redirected them to schools and the environment.

Opponents of the measure say it would further erode funding for economic development, cutting into the 27 percent set-aside for business ventures.

But we think Outdoor School is an Oregon treasure that ought to be available to all schoolchildren for free for a full week. And right now in Oregon, many children aren't getting that, either because their school districts can't afford to send children for a full week or because their schools charge hefty fees. "These are things that should be part of our basic knowledge, our DNA as Oregonians," says Rex Burkholder, a former Metro councilor. "Everyone needs this."

We agree. Vote yes.


Measure 100

Endangered animal protections


Oregon isn't the first place that leaps to mind in a discussion of animal poaching. But the backers of this measure make a persuasive if anecdotal case that the state is becoming a supply hub for elephant ivory, rhinoceros horns and lion genitals.

That's partly because of our location—a port on the Pacific Rim positions traffickers to fill Asian demand for folk cures—but it's also because Oregon has no laws against selling products made from endangered or threatened wildlife. California and Washington both passed laws banning such sales in the past two years, but an Oregon bill was stymied by opposition from the National Rifle Association.

And so to the ballot, with a measure that would create state fines for anyone who gets caught selling the parts of 12 species, including sea turtles, cheetahs and the spiny anteater. Penalties go up to $6,500 or twice the value of the product. The "getting caught" part is the sticky bit: The measure includes no funding for criminal investigators, so it's hard to imagine it taking a significant bite out of the ivory trade.

But at worst, this is a measure that would make sport hunters think twice before trying to sell their big-game trophies. (It doesn't ban possession, so you won't have to worry about your ivory key chain.) At best, it could discourage international traffickers from making a home base here. Score one for Cecil the Lion, and vote yes.


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