SALEM — Gov. Kate Brown has called a special one-day session of the Legislature for May 21 to deal with a proposed tax break for some small businesses.
Brown said it was an issue that “can’t wait any longer.” One Republican from Central Oregon dismissed the move as “political theater.”
Brown had pledged to call the special session when she signed legislation that disconnected state tax law from federal law.
That move was intended to forestall losing an estimated $200 million in revenue when tax cuts enacted by President Trump and the Republican-controlled Congress are applied to state returns.
Republicans had urged Gov. Brown to veto Senate Bill 1528, which disconnected the two tax codes. Because the tax cuts would have gone into effect if the Legislature and governor had done nothing, Republicans called the bill a tax hike.
Brown announced that she would call a special session at the same time she said she would not veto the bill, linking the removal of one potential tax break with the plan to pass another.
Brown said she wanted the special session to change Oregon’s pass-through law to include sole proprietorships. The move would cost state coffers an estimated $15 million while benefiting about 9,000 businesses.
“We have an obvious inequity in Oregon’s tax system that is prejudiced against thousands of small Oregon businesses, and a simple change can fix it,” Brown said in a statement. “I’m simply not willing to let these Main Street businesses — entrepreneurs, mom and pops, and startups — go through another tax year with unfair tax treatment as compared to their larger competitors.”
House Minority Leader Mike McLane, R-Powell Butte, said he hoped Democrats will not wander into other legislative issues.
“The political theater session now has a date,” McLane said in a statement. “Let’s hope Governor Brown and legislative Democrats will limit the scope of the session to the stated purpose instead of allowing for the introduction of unrelated policy bills. In the end, the tone and tenor of the session will be defined by whether Democrats are able to stick to their word.”
Senate Minority Leader Jackie Winter, R-Salem, said in a statement that Republicans were ready to work with the governor within the limits of dealing with the specific issue.
“While the governor’s proposed fix doesn’t help nearly enough Oregon small businesses, we are committed to working to expand these tax cuts so that all small businesses in Oregon receive tax equity and fairness, just as they would have had the governor vetoed Senate Bill 1528,” she said.
House Speaker Tina Kotek, D-Portland, said in a statement that she and Senate President Peter Courtney, D-Salem, will appoint a special committee to work on the issue that will meet prior to the session.
“The House stands ready to work collaboratively to consider reasonable improvements to our existing small-business tax break,” Kotek said.
Brown was critical of her critics who harped on the number of businesses the proposed tax break would help.
“Nine thousand may seem like a small number to some in Salem, but to these business owners and their employees, it makes a big difference,” she said.
Brown picked a day when lawmakers would be in Salem for “Committee Days,” the week of informal hearings held when the Legislature is out of session. It also comes six days after the May 15 primary election.
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