Opinion: Democrats wield power with reckless abandon
This is an exercise in what happens when ultimate power is wielded without concern for consequences.
But first, remember back to November 2016 when Oregonians defeated Measure 97, a proposed 2.5% gross receipts tax on some corporations. Business owners worried about how such a tax would impact their bottom lines, especially among businesses that operate at narrow profit margins. A majority of Oregon voters (59%) saw Measure 97 for what it was — a misguided money grab that would cause higher consumer prices, business closures and job losses.
Then, along came the November 2018 general election, when the state's political climate shifted, delivering lopsided majority victories in the House and Senate. The election gave Democrats 38 of the 60 seats in the House, well above the three-fifths threshold needed to raise taxes without help from Republicans. At the same time, Democratic Gov. Kate Brown prevailed over Republican challenger Rep. Knute Buehler.
The super majority set the table for a Democratic feeding frenzy that's playing out during this year's legislative session in Salem.
Among a slate of bills endorsed by the majority Democrats — with firm support of East Multnomah County lawmakers — is HB 3427. This particularly troublesome bill shrugs a collective shoulder at the voters who said "no" to Measure 97 in 2016.
This bill creates a gross receipts tax that, when passed into law, will haul in $2 billion from Oregon businesses. The tax rate is .49% on commercial activity over $1 million. For a small company that does $5 million in annual business, the owner would face $24,500 in new taxes. That business will need to decide whether to absorb the loss, pass on the expense to consumers, or eliminate an employee to make up the difference. None of those options bode well for future employment.
Consider a larger company with annual sales of $50 million. That business will be on the hook for $240,000 in new taxes. How many jobs will be lost to make up that difference?
HB 3427 is promoted as a much-needed boost in spending for Oregon's beleaguered K-12 public schools. We get that. Who doesn't want to see smaller class sizes and modern learning tools?
But it's an empty promise. The new tax revenue will flow into the state's general fund, where dollars can be allocated to whatever state program lawmakers want. There are no guarantees that these dollars will be spent on schools.
And certainly, none of these dollars have been recommended to support any of the state's community colleges, which are lifelines for job and career training. That's profoundly true for Mt. Hood Community College, which serves some of Oregon's lowest-income residents.
This is what happens when any political party wins a super majority. Checks-and-balances disappear. Collaboration and compromise evaporate. The party in power loses all motivation to listen. The Democratic Party is wielding its political might inside the state Capitol with reckless abandon.
Passage of HB 3427 will be a mistake for Oregon, leading to job loss and higher prices for everyone, with no promise that the money will go where it's intended. Oregon's voters understood this in 2016 when they defeated a similar gross receipt tax. But Democratic lawmakers is Salem don't care. They're drunk on their own power.
You count on us to stay informed and we depend on you to fund our efforts. Quality local journalism takes time and money. Please support us to protect the future of community journalism.