by Greg Barreto
The lure of an additional $6,000,000,000.00 (6 BILLION DOLLARS) to some politicians in this state is just too great. Throw all wisdom, common sense or economic prudence to the wind. The salivating going on for 6 billion dollars is like lack of oxygen for a climber at the top of Everest, they cannot think clearly. If you think Tier 1 PERS was a debacle, Measure 97, if passed, will be a cancer on job creators in Oregon for many years to come. Measure 97 is being peddled by the public union bosses as a needed tax on large C corporations that “don’t pay their fair share,” specifically those that produce over 25 million dollars of sales in Oregon. The Measure is not based on how profitable a corporation is, but based entirely on sales volume. More simply, Measure 97 is a stealth sales tax. Anyone with even a basic understanding of how business works, knows that this added cost of doing business cannot be absorbed, but must be passed on to the end user, otherwise high volume/low margin businesses will be severely impacted in Oregon. Whatever products these corporations sell, the added cost must be passed on to the purchaser of these goods.
The Legislative Revenue Office (LRO) which is a non-partisan entity for information, predicted that this tax will generate approximately $6,000,000,000.00 (6 BILLION DOLLARS) per biennium and approximately 66% of that amount would be paid by consumers in Oregon. Put into a simple equation, that means 6 billion every two years, multiplied by .66, equals 2 billion a year paid for by consumers. The report says this would be an increase in costs of $600 per year, per person in Oregon. Currently, depending on which website you look at, Oregon already has a cost of living that is in the top 10 highest in the country.
In addition,in the last two sessions, the Democrat majority has added a low-carbon fuels tax, an increase in minimum wage, paid leave, and an increase to our electricity cost by eliminating a reliable energy source. Then, take into account that Oregon’s median wage is below average at around 28thin the country and this makes Oregon a tough state for families to make ends meet. Measure 97 will raise the cost of living even further in Oregon to nearly the highest, if not the highest in the country. So when politicians talk about disparity in wages and a shrinking middle class, it’s not difficult to see which party is adding to that.
Additional information from the Legislative Revenue Office stated that if this measure passes, Oregon would lose 38,000 private sector jobs while at the same time creating 18,000 more public sector jobs. In essence, we are creating 18,000 more public union jobs and charging every person in Oregon an estimated $600 dollars for this. Do you wonder why the public unions are behind this? Could it be more money for union bosses, their ability to fund their political agendas and achieve more power in the process? Sen. Doug Whitsett’s earlier newsletter challenged that perhaps Oregon is creating a protected class with the public unions. Sen. Whitsett found that the average cost to the taxpayer for each public union job, including benefits, is around $85,000.00 dollars a year. Now, compare that to the average private sector worker whose wage is around $47,000.00 a year. Nearly 60% of the public sector compensation is their retirement and Cadillac health plans (as reported in the Budget Information brief/2016-4). Now the union bosses, through increased consumer costs, want to extract another $600 dollars per year from each Oregonian to grow more government jobs. Defend Oregon, the political arm of the unions that created Measure 97, claim that this tax will be spent for schools, health care, etc. The truth is, they have no guarantee in how the Legislature spends revenue from the general fund.
Do you remember when in 2010 the people of Oregon voted on having a short legislative session? “Proponents of Measure 71 argued that the state was too complex for lawmakers to expect a two-year budget to undergo no changes between sessions. Annual sessions, they said, would help with those issues.” In the 35 day, 2016 short session, 120 bills were passed and signed by the Governor. Two of these included the: “Coal to Clean”, a progressive energy bill with unknown costs to Oregonians, and one of the highest minimum wage bills in the nation. The current majority party in Salem have betrayed the original intent of the 35-day legislative sessions in a manner that is tantamount to a gross abuse of power. Do you think the promises of Measure 97 will be kept and all the tax dollars will really go to education and health care? Recent history suggests otherwise.
This tax will impact more than just large C corporations that sell over 25 million dollars a year. It will also directly affect small companies. Even companies that don’t gross over 25 million dollars, but purchase materials from large companies to build their product, will be affected. When Oregon companies buy components from these larger C-corporations they will incur an added 2.5% minimum tax. This puts Oregon businesses at a distinct disadvantage in the marketplace. Manufacturing companies affected by taxes like this can move from state to state or even out of the country. Many are contemplating just that.
When this state needs more high paying jobs to offset the number of minimum wage jobs we already have, you have to wonder, who’s calling the plays? What a foolish thing for Oregon to raise the cost of living, raise the cost of doing business, and chase companies and jobs (38,000) out of the state. They might as well hang out a shingle at the state line with the message that in the future, if you want to produce product in Oregon, you have to have to pay more to stay. Other states are inviting and encouraging business to check them out with a message and a track record showing that they value and appreciate job creators.
Currently, Oregon spends millions of tax dollars each year on economic development programs to hopefully grow Oregon’s economy and create jobs. At the same time, we have an anti-business legislature and measures like 97 working to neutralize their work. Wouldn’t it seem more advantageous to encourage job creators and not simply treat them as necessary evil ?
Some of my critiques in this newsletter may seem like I am down on public employees. That is simply not the case. We need government employees to provide the needed services to the public. In fact, when it comes to educators, I think many of them in rural communities are underpaid. This letter is about the balance in government spending and preventing government from becoming unsustainable.
Some questions that we should ask are: 1. Why is Oregon #1 in government spending by population in the west and why does it outspend 39 other states in the nation? 2. Why in the last 35 years has the state budget grown twice as fast as population and inflation combined? 3. What do we have to show for this: Revenue Dept. Chair and Energy Dept. CFO resigns over Department of Energy scandal, DHS Chair resigned over foster care abuse, DEQ Chair resigned over Portland pollution scandal, and the Transportation Chair resigning over possible falsifying of public data records. Do you think added tax dollars will fix these issues?
If we are overweight or out of shape and cannot do the things in life that we enjoy and we have trusted friend that encourages us to go on a diet and get in shape, is that a bad thing? I hope not. We cannot overload the private sector taxpayer with burdensome costs that they can simply not afford. It also has to do with an economy in Oregon that is suffering from an imbalance of too many minimum wage jobs compared with higher wage jobs. Higher wage jobs cannot be created by the government at the expense of the taxpayer in order to equalize the situation.
The fix for Oregon is just the opposite of what Measure 97 proposes. Invite job creators to Oregon that provide the higher paying jobs and benefits and then appreciate and value them for what they contribute. It’s really a simple fix that other states understand and in fact are now pro-actively recruiting Oregon manufacturers to visit their state. I just got one last week from Virginia and prior to that from Taylor, Texas.
They state: ” The City of Taylor has worked to create an environment where businesses know that they are welcome here. “
This letter could go on and on, but the bottom line is that if this senseless measure passes, it will for the short term increase revenue in Oregon. But over the long haul, it will increase the cost of living for every Oregonian, increase the number of government jobs adding additional budget costs to the state and will chase valuable revenue creating jobs out of the state. Six billion dollars of new short term revenue cannot fix the problems created by decades of one-party rule. Please vote NO on 97.
I will ask again for you to help me bring business minded legislators to the House of Representatives. Our top tier of candidates need your help and they are all small business owners. I will see that your dollars go to support them and work to change the one party rule in Oregon. Two weeks to go and now is the big push. Please donate online . OR send a check to my treasurer: Barreto for HD58, 89286 Cranberry Lane, Bandon, Or 97411. All amounts are needed and appreciated.
Most importantly, VOTE and encourage your family and friends to do so too.
Thank you and I ask you to join me in praying for this state and this country.
God bless you,
Serving Oregon House District 58
Union, Wallowa and Umatilla Counties