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Sen. Mark Hass helped craft a business tax to raise $1 billion annually for K-12 schools.

Editor's note: This story is part of the The Times' special series, "Decade in Review." This series features three stories that helped to define each year of the 2010s. These can retell single stories that captivated readers of the time, a saga that played out across many articles, and even stories that were crowded to the margins by other news at the time but have made a lasting impact on our region.

OREGON CAPITAL BUREAU FILE PHOTO - Sen. Mark Hass, D-Beaverton, was one of the top architects of a business tax to bolster education funding by $1 billion per year.In November 2018, Oregon Democrats won smashing victories up and down the ballot.

Gov. Kate Brown, thought to be facing a tight race for re-election, comfortably turned aside a challenge from Republican Knute Buehler. Democrats not only held onto the Oregon House and Senate, they picked up enough seats in both chambers — including Tualatin- and Sherwood-area districts long represented by Republicans — to win so-called supermajorities, allowing them to raise taxes without any Republican votes.

So when lawmakers descended on Salem for the legislative session in 2019, the stage was set for one of the most impactful — and controversial — years in Oregon's modern political history.

Perhaps the governing Democrats' single biggest priority heading into 2019 was to pass a funding package for Oregon's public school system. The state has some of the worst graduation rates and largest class sizes in the country, and leaders in both parties agreed that a fix was badly needed. Predictably, however, they disagreed sharply on what that fix should look like.

To understand the roots of the issue, rewind to 1990, when state voters installed steep curbs on how much public schools could collect from property taxes. Ballot Measure 5 effectively shifted responsibility for paying for public education from taxpayers to the state. The matter was compounded in 1997, when voters approved Ballot Measure 50, freezing permanent property tax rates in place across the state.

In 2000, state legislators took a stab at addressing what was by then a growing gap in school funding. The Legislature set up a commission to report on how much money schools needed to provide a "quality education model," and it referred Ballot Measure 1 to voters, amending the state constitution to require the Legislature to meet statewide education funding goals. Measure 1 passed overwhelmingly, but it changed little. In 2009, after several school districts asked the Oregon Supreme Court to force the Legislature to comply with Measure 1, the high court ruled that it couldn't be enforced, effectively rendering it useless.

Fast-forward to 2016. The Oregon Education Association and several other labor unions pushed Ballot Measure 97, a business activity tax estimated to rake in $3 billion annually to state coffers. Advocates said Measure 97 would allow the Legislature to direct more money to public education, which remained underfunded after the property tax changes of the 1990s. But businesses pushed back hard on the tax plan, and even many sympathetic Democrats in Salem were reluctant to embrace it, worried about the effect it could have on the state's economy. In the end, voters rejected Measure 97 by nearly a 20-point margin.

Sen. Mark Hass, D-Beaverton, attempted to craft a more moderate, less politically toxic version of the proposed business activity tax during the 2017 legislative session. But the resounding failure of Measure 97 was still fresh in people's memories. One memorable headline from Oregon Public Broadcasting as Hass' plan was unveiled declared, "Ghost of Measure 97 Appears." In the end, the tax plan didn't even get a vote.

So, in 2019, with Democratic supermajorities secured and a bipartisan task force on Student Success already touring the state, Hass was determined to get it right. Together with state Rep. Nancy Nathanson, D-Eugene, Hass co-developed a new version of the business activity tax to drive $1 billion per year directly into education. The tax plan was crafted to prevent the Legislature from taking the money and spending it elsewhere, and it was tailored to protect smaller businesses and certain types of businesses that sell essential goods and services, like grocery stores, gas stations and primary care facilities.

The Student Success Act was just acceptable enough to the Legislature that it squeaked through with just one more vote than was legally required. Because it raised taxes, the legislation tested Democrats' new three-fifths supermajorities, winning 37 of 60 votes in the House and a bare-minimum 18 of 30 votes in the Senate. No Republican legislator voted in favor, arguing that only a constitutional amendment was sufficient to ensure the tax revenue will go toward schools and that the tax itself was too steep.

The Senate vote was delayed for a week when most Republican senators left Salem to deny Democrats a quorum; they eventually returned in exchange for concessions on gun control and vaccine mandate bills.

Although it failed to win hoped-for bipartisan support and came at the cost of other priority bills, Democrats were elated with the Student Success Act's passage. Hass said it was the culmination of his nearly 20 years in the Legislature, and in September 2019, he declared he would run for secretary of state instead of seeking another term in the Senate.

"The Student Success Act was a monumental achievement that we accomplished, and that's done," Hass told The Times. "I think my work in the Legislature is complete."

The rest of the legislative session hardly went smoothly.

While Democrats scored major victories on other legislation as well — including a paid family and medical leave act that will take full effect in 2023, rent control and density laws intended to provide more affordable housing options, and election reforms to remove paid postage requirements for ballot envelopes and open the door to campaign finance reform — Senate Republicans used their quorum-denial tactic again, walking out in June over a cap-and-trade proposal that ultimately failed to get a vote on the Senate floor.

House members did a better job of maintaining comity in their chamber, but even still, the House endured a monthlong period in which Republicans made the House clerk read every bill in full before a vote in order to slow down the Democratic agenda, and House Republicans revolted against their caucus leader weeks after the legislative session, replacing Carl Wilson with freshman Rep. Christine Drazan of Clackamas, who is seen as a more aggressive advocate for Republican priorities.

Democrats are expected to try again to pass a cap-and-trade bill in 2020.


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