Let's turn our attention today to Measure 104, one of the two tax measures on Oregon's statewide ballot: This is the constitutional amendment that would expand the kinds of legislative bills that are defined as "revenue-raising" and which would therefore require a three-fifths majority of the Legislature to pass.
(The other tax measure on the ballot, Measure 103, would amend the constitution to ban the state or a local government from imposing taxes on the sale and distribution of groceries. Our advice is for voters to reject this measure.)
Measure 104 is a tougher call, in part because we have seen little evidence that legislators and other state officials are serious about curbing the state's ravenous appetite for additional revenue. But in the final analysis, we think the fix proposed by Measure 104 is too extreme and too likely to trigger unintended consequences. Oregon voters should reject the measure — but state leaders should take heed of the climate that brought us both 103 and 104.
Currently, the Oregon Constitution requires bills for raising revenue to receive a three-fifths vote of approval in each legislative chamber. But the constitution offers no additional guidance on what is meant by "raising revenue."
The courts have offered some elaboration: A bill to raise revenue must collect or bring money into the state's coffers and either impose a new tax or increase the rate of an existing tax. So a bill that creates or increases a fee is not considered a revenue-raising bill requiring a three-fifths majority. Neither is a bill that eliminates a tax deduction or exemption considered a revenue-raising bill.
Measure 104 would specify that a bill is revenue-raising if it creates a new tax or fee, increases the rate of an existing tax or fee or modifies, eliminates or changes the eligibility for any exemption, credit, deduction or lower rate of taxation.
Legislators haven't been shy about increasing fees or eliminating deductions in their efforts to bring additional money into the state's coffers. In the last session, for example, Democrats disconnected Oregon from a federal tax provision worth about $140 million in tax breaks to certain state taxpayers — and were able to do so without the three-fifths majority required to raise revenue.
Real estate agents continue to worry that Democrats might try to limit the mortgage interest deduction that Oregonians can take on their state tax returns; an effort to do that didn't get out of committee in the 2017 session, but there's talk that a similar measure might resurface in 2019. Not surprisingly, the real estate industry is helping lead the push for Measure 104.
But, as we noted in our arguments against Measure 103, it's a bad idea to dictate tax policy via ballot measures. And a measure that intends to amend the constitution requires a higher burden of proof, and we don't think Measure 104 has crossed that hurdle.
In addition, we suspect that Measure 104 would prove to be yet another poster child for the law of unintended consequences. Consider, for example, that Oregon state agencies and boards collect more than 2,400 fees that help offset the costs of administering state laws. An agency seeking a legitimate increase in its fees in theory could not do so without a three-fifths legislative vote. It seems as if the measure would pave the way for increased legislative gridlock in Salem.
Oregon voters would be wise to reject Measure 104. But legislators and other state leaders need to show that they're paying attention to the factors that helped give birth to both of the tax measures on the November ballot. One way to do that would be to get serious about the hard work of reining in the state's spending. Without that commitment from Salem, it's a sure bet that more of these tax measures will be making their way to future ballots. (mm)