Oregon Gov. Kate Brown tells Salem chamber school business tax is good solution

Statesman Journal

Gov. Kate Brown told Salem business people Monday now is the time — while Oregon's experiencing a strong economy and steady job growth — to push through innovations for schools and healthcare.

Brown made it clear to the audience of nearly 200 at the Salem Area Chamber of Commerce luncheon that challenges remain for Oregon. On her list: Reducing class sizes; creating more affordable housing; and establishing long-term funding for the Oregon Health Plan.

It's a list state legislators are already well-versed in. Her 30-minute presentation, which included taking questions, came in the home stretch of the 2019 Legislature.

On health care funding, she said one piece of her proposal that's no longer in play is a financial assessment on employers with 50 or more workers that don't offer insurance benefits.

"We're going set it aside," Brown said. "That may get some cheers from the audience."

"Frankly, the proposal's not ready," she said. "We couldn't get the support from the business community."

Across Oregon, about 94% of adults and 98% of children are covered by insurance.

Other sources of revenue for the health care plan include a $2-a-pack tobacco tax increase.

Brown also stressed the need for affordable housing, noting that the state's past investment of about $300 million "felt like a drop in the bucket."

Brown's seeking a $400 million investment that is aimed at children and families, homeless veterans and communities with an inadequate housing supply. Brown said a lack of market-rate housing has stopped economic growth when businesses want to expand.

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Meanwhile, Democrat-sponsored cap-and-trade gas emissions legislation is needed to preserve Oregon's environment and prepare future generations for the impacts of climate change, Brown said.

"The harsh reality is future generations will judge, not on the fact of global climate change, but on what we've done to tackle it," she said.

However, Brown said her effort has lost support from left-leaning organizations who don't back her market-based approach to reducing greenhouse gases.

'It is a good solution for Oregon'

Brown faced audience questions about the state's taxing strategy, including House Bill 3427, which would put billion in business taxes into public schools with a gross receipts tax. The House has passed it.

Questions centered on the fairness of a gross receipts tax on businesses instead of a tax on profit margins and the long-term future when another recession impacts tax revenues.

"I think it is a good solution for Oregon," Brown said, adding that her office looked at different models for the proposal.

Brown also said investing in infrastructure and workforce development is needed to close the gap so employers can continue hiring.

"The challenge is finding good skilled employees," Brown said.

Brown also faced questions about whether the business tax should include resale certificates that would lessen the impact on the construction industry.

But she suspects there will be language to fix technical issues, adding "this legislation has been a compromise."

Ben Botkin covers Oregon state government. To support his work, subscribe to the Statesman Journal. You can reach him at bbotkin@StatesmanJournal.com, 503-399-6687 or follow him on Twitter @BenBotkin1