SALEM — Union members endorsed a plan by Democrats in the Oregon Legislature to raise taxes on the wealthy, while some charitable organizations Wednesday voiced concerns the hike could cut charitable giving and reduce their lifeline.
This week, the Democrats — who control both legislative chambers — unveiled a plan to raise $275 million, primarily by raising taxes on high-income earners and increasing the corporate minimum tax. Most testimony Wednesday before the House Revenue Committee came in favor of House Bill 2456, touted as a fair way to funnel more money into public education.
Laurie Wimmer, a lobbyist for the Oregon Education Association, the state’s largest teachers union, noted that public employees are facing likely cuts to their pensions. She said raising revenues from businesses and upper-income earners is a fair way to “share the sacrifice.”
This plan, she said, represents a “very modest, tiny contribution by those most capable of paying it, who have done well despite the downturn.”
Association Vice President Deborah Barnes said she represents thousands of teachers in the state “who are begging” lawmakers to “reinvest in public education in this state.”
HB 2456, which details the tax plan, would reduce the amount of money high-income earners could claim in deductions. It would reduce the allowable deductions for individual taxpayers with incomes above $125,000 and for couples earning above $250,000.
The proposal would also reduce or eliminate the same taxpayers’ personal exemption credit.
For corporations, Democrats want to increase the minimum tax for businesses earning more than $100 million, and close loopholes for offshore corporate accounts.
Jim White, director of the Nonprofit Association of Oregon, said he’s worried the bill would discourage charitable donations, reducing an important source of income for nonprofits.
“The charitable deduction has to be kept separate” from the other tax-raising revenue measures, he urged lawmakers.
Roger Martin, a lobbyist for the Oregon Catholic Conference, was more blunt.
“Don’t kid yourself that this isn’t going to have an effect on charitable contributions, because I’m here to tell you, it will have an effect,” he testified.
Jared Mason-Gere, a spokesman for House Democrats, said Democrats are open to ideas from their Republican colleagues.
“From the start, it’s been a conversation,” he said.
Democrats are open to negotiating an alternative tax plan or an exemption for charitable organizations, Mason-Gere said.
In a press conference after the committee hearing, House Republican leaders blasted the Democrats’ plan.
House Republican Leader Mike McLane, R-Powell Butte, said House Speaker Tina Kotek has polarized the chamber. Republicans are still pushing for deeper cuts to the state’s public pension system, and with those cuts, he said, taxes would need not be raised.
McLane said Kotek has turned the discussions over taxes and the Public Employees Retirement System “into a partisan battle line, where she drew the lines.”
During a radio interview Wednesday, Gov. John Kitzhaber, a Democrat, said he believes a revenue package will emerge that reflects a compromise between the two parties.
“I think people need to view it as the beginning of a longer discussion,” Kitzhaber said on Oregon Public Broadcasting’s Think Out Loud.
To raise taxes, lawmakers need a supermajority in both chambers, meaning at least two Republicans in both chambers would need to sign on to the plan.
Lawmakers plan to listen to more testimony from the public this morning on the revenue bill. Meanwhile, in the Senate, a vote is scheduled on Senate Bill 822, the Democrats’ proposal to trim PERS.