Month: January 2020

Oregon is meeting its 2020 GHG emissions goals, depending on how you measure it

By Rachel Dawson

Is Oregon meeting its 2020 greenhouse gas (GHG) emission reduction goals? It depends on how you measure emissions.

The Oregon Legislature established GHG reduction goals in 2007 through HB 3543. The law called for reducing GHGs to 10% below 1990 levels by 2020, and 75% below 1990 levels by 2050.

However, the statute does not say whether GHGs should be measured in the aggregate or on a per capita basis. This is an important distinction given Oregon’s population growth since 2007.

The Oregon Global Warming Commission (OGWC), a group created by HB 3543, insists on measuring total GHG emissions. Using this metric, Oregon produced 13% more total emissions in 2017 compared to 1990 levels, and thus appears to be failing.

When measured on a per capita basis, Oregon GHG emissions in 2017 were actually 21% lower than 1990 levels. We have more than doubled the 10% emissions reduction goal, three years ahead of the deadline.

In fact, Oregon has improved its energy efficiency so much that per capita energy use in 2016 was the lowest it’s been since 1960, declining 37% since it peaked in 1972. Oregon has the lowest per capita energy use in the entire Northwest.

Unfortunately, you won’t see any celebration from the Global Warming Commission, because good news doesn’t sell. More importantly, the Commission needs the perception of a crisis in order to justify Governor Brown’s climate change agenda. Oregon legislators should remember this when the Governor’s cap-and-trade bill is debated in February.

Rachel Dawson is a Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Oregon and Washington Need to Think Bigger on I-5 Bridge Project

By Eric Fruits, Ph.D.

“It’s time to get this done!” Governor Kate Brown told the crowd at this year’s Oregon Leadership Summit, referring to a replacement for the Interstate 5 bridge over the Columbia River. The statement ended with an exclamation point, but it should have ended with a question mark. Despite the urgency, it’s not clear what the governor means by “this” or when “this” should be completed.

Last month Governor Brown met with Washington Governor Jay Inslee and inked a deal to begin the process of replacing the I-5 bridge connecting the two states. The two states have allocated $44 million to open an office for the I-5 bridge project. Governors Brown and Inslee hope to pick up some of the pieces of the Columbia River Crossing project that fell apart in 2013 after a dozen years of planning, costing taxpayers more than $200 million.

But what is “this” bridge replacement? Will there be more lanes than we have now, or fewer? Will lanes be set aside for buses or light rail? Will bicyclists and pedestrians get their own lane? These are all different ways of asking the same question: Will the replacement have more lanes for cars and trucks?

If the answer is “yes,” there will be more lanes to relieve traffic congestion, then the governor should push to get as much done as possible before her term is over. If the answer is “no,” there won’t be new through-lane capacity, then she should admit the project is an expensive no-growth policy and be upfront with Oregonians about it.

Since the beginning of the original CRC planning in 2001, the region’s population has grown by nearly 30%. Over that time congestion has worsened, commuting times have lengthened, and the bridge has become one of the worst freight bottlenecks in the country, according to the American Transportation Research Institute.

At this point there are no clear plans for how the I-5 bridge replacement will relieve pressure on this key pinch point. The current bridge has three northbound and three southbound lanes. At the time the CRC project imploded, there were no clear plans to add through lanes for cars and trucks—just added lanes for bikes, pedestrians, and public transit.

Opponents of the bridge replacement come from all sides. Environmentalists and active transportation advocates argue that relieving traffic congestion will trigger “induced demand” for travel that will make congestion worse and increase carbon emissions. Commuters and freight haulers complain the set-aside for bikes, pedestrians, and public transit is a wasteful use of lane capacity. Good government folks question spending billions of dollars on a project that would do little or nothing to relieve one of the nation’s worst traffic bottlenecks. Another group of good government folks—mostly from Washington and Clark counties—are clamoring for a third bridge that would allow Westsiders to avoid slogging through US Highway 26 and I-5 through Portland.

Opponents of the original CRC noted that improving traffic flows crossing the Columbia on I-5 would not solve any congestion problems. Instead, they argued, the new bridge would shift the bottleneck further south to the Rose Quarter. Things have changed, and that argument will soon lose its relevance.

In particular, the Oregon Department of Transportation is in the middle of a project to widen I-5 through the Rose Quarter. The addition of lane capacity alone will do much to relieve congestion in this choke point. But, there’s more.

Along with the addition of lane capacity, the legislature directed ODOT to experiment with congestion pricing along the improved stretch—an experiment supported by Governor Brown. The money raised from congestion pricing should be used to improve and expand roads for the people paying the tolls. If the governor doesn’t want to use the funds to expand highway capacity, she owes the people of Oregon a clear vision of where she thinks it should go.

Transportation is a crucial element of economic development. With transportation improvements, trade between regions increases. With easier commutes, employment opportunities open up. Increased trade and improved employment drive economic growth and prosperity. An I-5 replacement that does nothing to improve the flow of goods and people is a waste of money. A replacement that adds capacity and reduces congestion is an investment in shared prosperity for Oregon, Washington, and the West Coast.

Eric Fruits, Ph.D. is Vice President of Research at Cascade Policy Institute and an adjunct professor at Portland State University, where he teaches courses in urban economics and regulation. He can be reached at eric@cascadepolicy.org.

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Miss Virginia: A Trailblazer for Educational Opportunity for Today’s Kids

By Kathryn Hickok and Miranda Bonifield

Virginia Walden Ford is a Washington, D.C. mom whose extraordinary sacrifice and determination changed not just her own child’s life, but the lives of thousands of low-income and minority students. Her story is now told through the new movie Miss Virginia, starring Orange Is the New Black’s Uzo Aduba.

Virginia’s experience as an African American student integrating Little Rock high schools in the 1960s gave her a strong personal understanding of how important education is to a child’s success. When, years later, her own son William began slipping through the cracks of a D.C. public school where his teacher didn’t even know his name, she fought for a better option. Virginia’s answer came in the form of a private school scholarship. William went from skipping school to being a joyful, enthusiastic student known by friends and teachers.

Virginia Walden Ford believes every child should have that same chance to succeed in school and in life. Her persistent work on behalf of low-income students in Washington, D.C. led to the creation of the Opportunity Scholarship Program (OSP). The OSP is a congressionally funded scholarship program which has given thousands of District kids the chance to attend private elementary and high schools chosen by their parents or guardians. Virginia says, “We knew that if we raised our voices, we could win for our children. We did. And now our kids are winning as a result.”

January 26-February 1 is National School Choice Week, the world’s largest celebration of parental choice and effective educational options for all children. To celebrate National School Choice Week, Cascade Policy Institute will host a special screening of the film Miss Virginia in Lake Oswego on Thursday evening, January 30, at 6:30 pm. (Admission is free, but reservations are required due to space limitations. For theater information and to reserve tickets, call Cascade Policy Institute at (503) 242-0900.)

As Virginia Walden Ford and her son William knew too well, choices in education are widespread in America, unless families are poor. Parents with the financial means to do so will buy homes near public schools they like, pay tuition for private schools, or supplement the classroom experience with enrichment opportunities. But low-income families generally find themselves trapped with only one option: a public school assigned to them based on their address, which too often fails to meet their children’s educational and personal needs.

All families deserve better.

The landscape of options to meet students’ unique learning needs is more diverse today than ever. These options include traditional public schools, charter schools, private and parochial schools, homeschooling, magnet schools, online learning, and more. Today, more than half the states in the U.S. provide parents with flexibility in their children’s learning options through 61 different educational choice programs such as privately or publicly funded scholarships, education tax credits, and Education Savings Accounts (which can function like restricted-use debit cards for a child’s education expenses).

Every child has one chance to grow up, and each year is precious. Parents know it: The right educational environment can change a student’s life. Empowering parents to give their children the education that’s right for their talents and needs unlocks the unique potential of every child. Virginia Walden Ford’s experiences and advocacy on behalf of Washington, D.C. students demonstrate how important school choice policies are to the future of low-income children in America. She also shows us what a difference one dedicated and courageous parent makes, not only for her own child, but for thousands of others as well.

Kathryn Hickok is Executive Vice President at Cascade Policy Institute and director of Cascade’s Children’s Scholarship Fund-Oregon program. Miranda Bonifield is CSF-Oregon’s Program Assistant. CSF-Oregon has provided scholarships worth more than $3.3 million to lower-income Oregon children to help them attend private or parochial elementary schools since 1999.

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Eric Fruits, Vice President of Research of Cascade Policy Institute submitted testimony to Metro Council regarding the lax oversight of Metro’s Parks and Nature Program

Press Release: Eric Fruits, Vice President of Research of Cascade Policy Institute submitted testimony to Metro Council regarding the lax oversight of Metro’s Parks and Nature Program.

January 23, 2020

FOR IMMEDIATE RELEASE

Media Contact:
Eric Fruits, Ph.D.
(503) 242-0900
eric@cascadepolicy.org

Thursday, Metro Council will be receiving from staff an annual report on Metro’s Parks and Nature program. Cascade Policy Institute urges the Council reject the Annual Report and demand a revised report that includes details of the program’s skyrocketing administrative costs. In addition, the Council should replace the current members of the Oversight Committee with individuals who have the time, energy, and expertise to provide adequate oversight to the nearly billion dollar Parks and Nature program and Council should provide the new Oversight Committee with the information and staff support necessary for them monitor the Parks and Nature program.

REJECT THE PARKS & NATURE ANNUAL REPORT

In the last fiscal year, Metro spent $42 million on its Parks and Nature program. Yet the annual report provided to Metro Council is only four pages and runs less than 1,400 words with high-res photos making up about one-third of the report. What little information is presented raises more questions than it answers, in particular:

  • The Annual Report provides no explanation for skyrocketing administrative costs, which last year account for 30% of total program expenditures. Metro promised taxpayers that administrative costs would be no higher than 10%.
  • The Annual Report provides no useful information regarding how many acres were purchased in the past year, where they were purchased, or how much was paid. Previous annual reports provide at least some of this information. Metro Councilors and Metro voters deserve to know how much of their tax dollars are being used to buy land outside of Metro’s jurisdiction and/or outside the Urban Growth Boundary.
  • In April 2019, the Oversight Committee requested the Annual Report include information regarding “extra resources (bond proceeds and grants) that helped pay for capital projects at Chehalem, River Island, etc.” The only mention of capital projects in the Annual Report are forward looking promises regarding the proceeds from the 2019 bond measure. The Annual Report has no discussion of Chehalem Ridge nor River Island. The omission of these items specifically requested by the committee demonstrates the Oversight Committee has no sway over Metro staff.

REPLACE THE MEMBERS OF THE PARKS & NATURE OVERSIGHT COMMITTEE

Metro council and staff frequently repeat the tired phrase “promises made, promises kept” with respect to their Parks and Nature program—it even makes its way into the most recent Annual Report. One promise made to voters in every Parks and Nature ballot measure since 2006 has been vigorous oversight of the program by a citizen Oversight Committee.

  • Beginning with their earliest meetings, Metro staff made clear the committee would be denied key information required and requested to provide oversight. For example, the committee has repeatedly been rebuffed in its efforts to provide oversight on pending land purchases.
  • Over the past year, the already weakened Oversight Committee has become a farce. The last time the Oversight Committee met was April 5, 2019, or nearly 10 months ago. This is the longest gap between meetings of the Oversight Committee. At the last meeting only 2 of the 12 committee members were in attendance.
  • The Oversight Committee was expected to meet in Summer 2019, with a discussion of the Annual Report to be an agenda item. That meeting was never held and there is no record of the Oversight Committee meeting to review the 2018-19 Annual Report.

The members of the current Oversight Committee should be replaced by individuals who have the time, enthusiasm, and expertise to serve. The newly formed committee must be provided the power—and support from Metro Council and staff—to exercise effective oversight of this billion dollar program.

For more details on Cascade Policy Institute’s recommendations to Metro Council, please read the complete letter below.

Click here for PDF version:

Testimony to Metro-Letter 200123a

 

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National School Choice Week Celebrates All the Ways Kids Learn

By Kathryn Hickok

January 26-February 1 is National School Choice Week, the world’s largest celebration of parental choice and effective education options for all children. Since 2011, more than 180,000 independent NSCW events and activities have been planned in local communities across the country.

The landscape of options to meet the learning needs of today’s students is more diverse than ever. These options include traditional public schools, charter schools, private and parochial schools, homeschooling, magnet schools, online learning, and more.

Empowering parents to choose among these options can unlock the unique potential of every child. More than half the states in the U.S. now help families to have more flexibility with their children’s education through educational choice programs like privately or publicly funded scholarships, education tax credits, and Education Savings Accounts.

To celebrate National School Choice Week, Cascade Policy Institute will host a screening of the new feature film Miss Virginia in Lake Oswego on Thursday evening, January 30, at 6:30 pm. Admission is free, but reservations are required due to space limitations. For more information about the event and to reserve tickets, call Cascade Policy Institute at (503) 242-0900.

Kathryn Hickok is Executive Vice President at Cascade Policy Institute, Oregon’s free market public policy research organization. She is also Director of Cascade’s Children’s Scholarship Fund-Oregon program, which has provided private scholarships worth more than $3.3 million to lower-income Oregon children to help them attend tuition-based elementary schools since 1999.

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Why are rural, low-income residents subsidizing Teslas for Oregon’s urban elite?

By Rachel Dawson

Oregon state officials recently celebrated helping the state reach 25,000 registered electric vehicles (EVs) through local incentives and the Clean Vehicle Rebate Program. This celebration, however, is a punch in the gut to the state’s low-income and rural residents whose taxes fund the rebates and incentives used to purchase the EVs by predominantly wealthy and urban Oregon residents.

Programs include two rebate programs through the Oregon Department of Environmental Quality, a federal tax credit, and local utility rebates (though local utility rebates generally tend to target businesses and the 2019 Nissan LEAF). For example, a consumer could use between $7,500 and $10,000 taxpayer dollars to purchase a new 2020 Tesla Model 3, which currently sells for $39,999. In fact, 24% of the EVs registered in Oregon are Teslas.

These incentive programs may shave a couple thousand dollars off the consumer cost of EVs and plug-in hybrids, but their prices will likely still be too high for those with lower incomes. Purchasing an EV also isn’t a viable option for many residents living in rural counties due to a lack of EV infrastructure.

The three counties with the largest number of EV purchases, Washington, Multnomah, and Clackamas, are all coincidentally located in the Portland metro area. They also happen to be the three most wealthy counties in the state, so it’s no wonder their residents purchase 75% of the state’s registered EVs.

David Larson, Jaguar Land Rover’s general manager of product development, told ABC news that EVs “still cost a lot more than ICE [internal combustion engine] cars and charging takes a long time … For a rancher in Montana, EVs are not the solution. These cars are for people who live in urban areas and don’t travel more than 100 miles or more a week.” The same logic could be applied to people living in Eastern and Southern Oregon.

EVs are being promoted due to their supposed environmental benefits, but in reality, the emissions are simply being shifted from urban cities to rural areas. The electricity powering the vehicles comes from a mix of coal, hydro, wind, solar, and gas power plants. You won’t see any of these plants in Portland as most of them are located in other areas of the state, such as Eastern Oregon, where utilities can purchase and construct facilities on large plots of land.

Oregon officials are very vocal when it comes to “environmental benefits,” but seem to have tight lips when it comes to the range of issues EVs experience.

The vehicles use lithium ion batteries which are sensitive to temperature changes. Larson says that cold weather can cut range by up to one third. These issues make EVs a suitable option for warm, urban areas—a big reason why the largest markets for EVs in the US are located in California, Texas, and Florida. This may not be an issue in warmer climates, but EVs will experience a variety of problems during Oregon’s cold winters. The battery can also be significantly drained depending on how fast one drives, heating or cooling the vehicle, and radio usage.

Portland also has one of the milder climates in the state, so it is no surprise that the state has seen a surge of EV purchases in the urban metro area.

But even in an urban environment, relying on an EV can prove costly and inefficient. Recent electricity blackouts in California have left thousands without power, leaving EV owners stranded unless they own a gasoline powered generator to charge their vehicle or have access to other means of transportation.

Officials’ environmental concerns should be eased by the fact that vehicle emissions in Oregon are decreasing despite a growing population and are projected by ODOT to decrease to 20% below 1990 levels by 2050. This is due in part to older vehicles being retired and replaced by more efficient cars.

Multiple legislative concepts related to EV infrastructure will be discussed in the legislative short session this year. LC 222 would amend building code requirements to create an EV infrastructure requirement for the construction of certain buildings, such as privately-owned commercial buildings and residential and mixed-use buildings with five or more “dwelling units.” LC 224 would authorize the Public Utility Commission to allow utilities to recover the costs of EV infrastructure from all ratepayers.

The passage of these potential bills would further disperse the cost of EVs to those who do not own one through increased power bills and housing prices. Oregon taxpayers from across various counties and income levels should not be subsidizing EV purchases that tend to be used by wealthier residents living in urban environments. Given that EVs are already decreasing in price as new vehicles enter the market and technology improves, state officials should not move forward with the above legislative concepts and should eliminate the unjust EV rebates.

Rachel Dawson is a Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

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New Year, New Tax: What You Need to Know About Oregon’s Gross Receipts Tax

By Katie Eyre, CPA

The 2019 Oregon Legislature established a new tax affecting all firms that do business in Oregon. While it is called by its misnomer the “Corporate Activity Tax,” the CAT actually applies to most types of organizational entities such as partnerships, individuals, limited liability companies, and trusts that have commercial activity generated in Oregon in the regular course of their trade or business. It is a tax paid annually for the privilege of doing business in Oregon. Initial expectations are that it will raise about $1 billion in new revenue annually. These funds are to be set aside for exclusive use for education and school purposes.

By now, every business in Oregon should have received a generic letter from the Oregon Department of Revenue alerting them to this new tax. This letter is a helpful primer on the CAT, but is not incredibly useful in figuring out the impact on each business’s specific situation. As is usual with all tax law, the devil is in the details.

How did the Corporate Activity Tax come about? In May 2019, the Oregon Legislature passed HB 3427. In this bill, it established the CAT as the primary mechanism to fund the new Fund for Student Success. Then in June 2019, the Legislature passed HB 2164 which provided technical corrections to HB 3427. As a follow up, the Department of Revenue held informational and listening sessions around the state through the last half of 2019. In December 2019, the Department of Revenue issued 12 temporary rules related to this new tax. The agency intends to release additional temporary guidance through March 2020. Any time there is a new tax put in place, there is much ambiguity, and so as a tax practitioner, we appreciate any guidance that is issued, especially since the effective date is January 1, 2020 and the first estimated tax payment is due April 30, 2020 (more on that later).

Who is subject to the CAT? That tax is imposed upon enterprises with a trade or business and “substantial nexus” in Oregon, who also meet certain specific thresholds. We’ll drill down on some of the definitions, but here is a quick threshold listing:

  • Any business with Oregon “commercial activity” in excess of $750,000 will need to register,
  • Any business with Oregon “commercial activity” in excess of $1,000,000 will need to file, and
  • Any business with Oregon taxable “commercial activity” in excess of $1,000,000 will need to pay the CAT.

How much is the CAT? It is 0.57% of a firm’s Oregon taxable commercial activity in excess of $1,000,000 plus $250. If a business does not have Oregon taxable commercial activity in excess of $1,000,000, then it will not owe any tax, including the $250 minimum tax.

What is a “substantial nexus”? HB 3427 states that a business has a substantial nexus if it:

  • Owns or uses a part or all of its capital in this state,
  • Holds a certificate of existence or authorization issued by the Secretary of State’s office,
  • Has a “brightline presence” in Oregon, defined as:
    • Owns property in Oregon with an aggregate value of at least $50,000, or
    • Has Oregon payroll of at least $50,000, or
    • Has commercial activity in the state of at least $750,000, or
    • At least 25% of the total property, payroll, or commercial activity is in Oregon, or
    • Is a resident or domiciled in Oregon for commercial, corporate, or other business purposes.

The Department of Revenue provides an example of a hypothetical out-of-state firm that would be subject to CAT regulations:

Atlas Company (Atlas Co.), headquartered in Maryland, operates a website supporting internet sales, primarily to European country customers. Atlas Co. made approximately 10,000 sales at $99.00 per sale, to residents of Oregon during the year, realizing $990,000 of commercial activity. Atlas Co. contracts with an Oregon mailing service to deliver the merchandise in Oregon. While the amount of commercial activity realized by Atlas Co. is below the threshold to file a corporate activity tax return and pay tax, Atlas Co. does have substantial nexus in Oregon, and must register with the department when commercial activity exceeds $750,000.

What is commercial activity? HB 3427 introduced many new terms that require definitions. Fortunately, the law provided some definitions that will add partial clarity. The definition of commercial activity is the total amount realized by a subject taxpayer, arising from transactions and activity in the regular course of the taxpayer’s trade or business, without deduction for expenses incurred by the trade or business. For the most part, many businesses will think of this as their gross sales. For the most part, that is accurate. However, HB 3427 and HB 2164, list 47 exceptions to the calculation of commercial activity. They fall in to two categories:

  • “Excluded persons” like non-profits and some health care providers, for example. There are many others.
  • “Gross receipt exemptions” like non-trade interest income, excise taxes collected from customers, or wages received as an employee, for example. There are many others.

The CAT also introduces a “use tax” concept which will be unfamiliar to most Oregon businesses. If a business purchased equipment/property out of state, then brings it in to Oregon within one year of purchase, the value of the property is included in “commercial activity” unless the buyer can show that it wasn’t purchased out of state to avoid the CAT. This now requires the taxpayer and the state of Oregon to consider an Oregon business’s motivation in purchasing equipment/property from out of state suppliers and puts the CAT burden of the “gross receipts” tax on the buyer rather than the seller for this transaction.

What is Oregon taxable commercial activity income? We have discussed what “commercial activity” is, but not what the Oregon taxable commercial activity is. The CAT is only assessed against the Oregon taxable commercial activity. It is broken down as follows:

Commercial activity apportioned to Oregon

minus

35% of the greater of

  • Oregon cost inputs (as defined by the Internal Revenue Code Sec 471) or
  • Oregon labor costs
  • Note: This subtraction is limited to 95% of the Oregon commercial activity

What this means is that of the included commercial activity, only Oregon commercial activity is included. Non-Oregon activity is excluded. From there, a taxpayer can subtract out 35% of certain costs that are apportioned or sourced to Oregon.

What if a taxpayer has more than one business? The Oregon CAT requires a taxpayer to look at their businesses as a “unitary business” rather than separate businesses. This concept was designed for the situation where on a separate business basis, some of the businesses would not be subject to the CAT. But if aggregated into a unitary business, then they would meet the thresholds and therefore be subject to the CAT. A unitary business must file their CAT returns on a unitary basis, even though they are separate taxpayers for other purposes. This is one of the most complicated areas of the new law. The draft regulations provide the general rule that “if the activities of one business either contribute to the activities of another business, or are dependent upon the activities of another business, those businesses are part of a unitary business.” HB 3427 also discusses common ownership, centralized management, common executive force, among other things.

What are some of the administration aspects of the CAT? The Department of Revenue is still working out some kinks, but here in a nutshell is what we know to date:

  • The effect start date is January 1, 2020.
  • All CAT filings must be done on a calendar year basis, regardless of any fiscal year end for the taxpayer.
  • A taxpayer must register if their commercial activity is at least $750,000. (If not previously required to register, the taxpayer must register within 30 days of reaching the $750,000 threshold or face per month penalties).
  • Estimated taxes are required to be paid quarterly if the CAT will be greater than $5,000 for the year.
    • Due April 30, July 31, October 31, and January 31 for the previous quarter.
    • Note the first quarterly estimated payment will be due April 30, 2020.
    • All estimated tax payments must be paid electronically.
  • The annual tax return is due April 15 of the following year.
    • Note the first annual return filing will not be due until April 15, 2021 for the 2020 tax year.
    • A 6-month filing extension may be granted only for “good cause.” Extensions do not appear to be automatically granted.
  • Unitary groups must file as a single taxpayer. Each member will be jointly and severally liable for the filing and payment of the estimated taxes and the annual filing and taxes.

What can a business do now? This is just a general discussion of the new CAT and should not be relied upon for your unique situation. Because this is a new and complex tax, both the Oregon Department of Revenue and tax advisors are trying to understand as much as possible. The information is still evolving. Any Oregon business should consult with their tax advisor immediately so that they can understand how this new tax will impact their specific business. If subject to the tax, the business will need to budget for it and be prepared to register, as well as be prepared to file and pay the quarterly estimated tax. If you have a financial review or audit, talk with your certified public accountant to find out if it should be included in your tax provision analysis. And because of the definition of “cost inputs” for subtractions, you may want to talk with your tax advisor to see if you can enhance what is currently put into your cost of goods sold.

What kind of money are we talking about? Per the revenue impact of HB 3427, each of the next biennia will generate $1.6 billion to $3.1 billion for the Fund for Student Success. However, $423 million to $762 million will be sent to the general fund, an amount totaling approximately 25% of the new tax. In addition to collected taxes from businesses, the government will also add employees. Per the fiscal impact statement of HB 3427, government will also grow. In the first biennium, 87.62 FTEs will be needed to administer the various accounts within the Fund for Student Success and for the Department of Revenue to administer the CAT.

In addition to discussing with your tax advisor, you can find more information online at:

Oregon.gov/DOR/programs/businesses/pages/corporate-activity-tax.aspx

Katie Eyre, a Certified Public Accountant, is a Tax Partner at Fordham & Co LLP in Hillsboro. She is a former Oregon state legislator and served on the Hillsboro Planning Commission for more than ten years. She is a board member of Cascade Policy Institute.

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Espinoza and Equal Opportunity in Education

By Miranda Bonifield

In 1926, an Oregon school controversy made it all the way to the nation’s Supreme Court. But the issue on the table wasn’t teacher pay, proper curriculum, or student safety. Oregon had outlawed private schools in a discriminatory effort to remove Catholic education. But in the landmark ruling Pierce v. Society of Sisters, the Court recognized that “The fundamental theory of liberty… excludes any general power of the State to standardize its children by forcing them to accept instruction from public teachers only.” Families have a right to choose how they educate their children.

Later this month, the Court will consider another landmark education case, Espinoza v. Montana. Montana’s tax credit scholarship program, which enabled families to send children to the private schools of their choice, was struck down because some participating students attended religious schools. That decision removed options for all children, but disproportionately affects the children of low income families for whom private school tuition is at best a major sacrifice and at worst an impossibility.

A favorable ruling in Espinoza vs. Montana could help empower rather than exclude families who would otherwise be unable to attend private school—a boon to both the public schools which would benefit from increased competition and the students who could thrive with the education that best fits them.

Miranda Bonifield is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization. She is also the Program Assistant for the Children’s Scholarship Fund-Oregon program, which helps lower-income Oregon children attend private and parochial elementary schools through partial-tuition scholarships.

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New Portland Design Guideline Will Place Responsibility for Homeless Crisis on Private Property Owners

By Rachel Dawson

There is a homeless crisis in Portland. According to a recent count by Portland State University, the number of people found living in “unfit” conditions, such as in a tent outdoors, under a bridge or overpass, or in their car, has increased by 20% between 2017 and 2019.

Instead of providing sound and beneficial policies to help get homeless individuals on their feet and off the streets, Portland officials are pushing the issue onto private businesses.

The Portland Planning Commission recently affirmed a proposal submitted by Commissioner Oriana Magnera that would require new private downtown buildings, including stores and apartment complexes, to have a space where Portlanders can “rest,” including pitching tents and sleeping. She stated in a November meeting that current buildings may have “benches but not a lot of place to pitch a tent.”

Magnera blames the current homeless crisis in part on a housing shortage. It would thus make sense to provide shelter to those living on the streets and reduce restrictive city codes and laws that make it difficult to build homes in the Metro region. One such change could include enlarging the current Urban Growth Boundary that limits the amount of land available for new homes and artificially raises prices.

Portland officials should not place the responsibility for the homeless crisis on developers and private property owners. They should remove this new design guideline language and create policies that will tackle the root of the homeless crisis.

Rachel Dawson is a Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

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