KCEDA Board of Directors opposes Measure 97, vote NO

This “tax on top of tax” bill would mean five to seven percent more added to our goods and services

Klamath Falls, Oregon (October 24, 2016) – After thorough research the Klamath County Economic Development Association (KCEDA) Board of Directors is opposing Measure 97 and urging voters to vote “NO” on 97.  The state of Oregon prides itself on having no state sales tax; Measure 97 is merely a back door approach to mask a state sales tax that would be applied before goods and services make it to the cash register.

There are multiple reasons to vote NO on Measure 97 but all of them boil down to the fact that it is a badly-designed tax that would impact every Oregon family and business by increasing costs for the products and services we use every day – from food, gasoline, phone services, natural gas and electricity to medicines, cable television, internet service, healthcare, cars and insurance not to mention retail services like clothing, household appliances and the toys and books we purchase for our children.

In simplest terms, Measure 97 is a deceptive, hidden sales tax. In order to hide this sales tax promoters of Measure 97 would impose a 2.5 percent tax on the companies that make, ship and sell the vast majority of the products and services purchases by Oregonians. Worse yet, the process of getting products to market for Oregon consumers would be taxed multiple times along the way.  The “tax pyramiding” effect would tax each part of the process – producers, manufacturers and distributors – meaning the final taxation would be not just the original 2.5 percent but rather five percent or even seven-and-a-half percent before a product makes its way to a retail shelf.

Measure 97 is anticipated to increase state taxes by $6 billion.  Studies by various organizations have concluded that most of the costs would be passed on to Oregon’s local businesses, family farmers and the end users, the consumers.  But objective analyses have pointed to other disconcerting outcomes.  Nonpartisan economists at ECONorthwest have determined that Measure 97 would be the equivalent of a 40 percent corporate income tax. The state of Oregon’s own study found that Measure 97 would cause the loss of 38,000 private sector job within the state.

Worse yet, there is no guarantee how the state Legislature would spend the money.  The language of Measure 97 is deceptive.  It is not a constitutional amendment; under state law and Oregon Supreme Court decisions, they cannot bind the Legislature’s spending decisions.  And, contrary to having us believe the funds might be used for something specific, like education, the Legislative Counsel (the Legislature’s own top legal authority) has clearly explained that the Legislature could spent these tax dollars, “in any way it chooses.” One example points to a bail out of the pension fund of the government employees who both created Measure 97 and are funding the campaign to pass it.

According to KCEDA executive director Greg O’Sullivan, “Measure 97 is an unscrupulous and under-handed attempt to tax Oregon’s businesses and family farmers, often times more than once, in a behind-the-scenes way that will undercut every Oregon resident’s well-being. And, with no one overseeing how the Legislature would be spending those ill-gotten taxes flies in the face of how Americans legitimately do business.”

Clearly, Measure 97 is a deceptive, hidden sales tax.  It’s bad for businesses, it’s bad for family farmers and it’s shameless in what it would do for families and individuals in the state.

About the Klamath County Economic Development Association (KCEDA)

Since 1975, KCEDA has reflected the best of private enterprise, responsibility and dedication. Its mission is to provide tailored recruitment and retention/expansion programs, new opportunities for jobs, and a diversified, value-added industrial base/expanded economic development climate in southern Oregon. Learn more at www.ChooseKlamath.com.