Student Success waiting game continues as members work through tax issues
Monday, April 29, 2019
The Joint Committee on Student Success continued its work Thursday, April 25, edging ever closer to a vote on the Student Success Act.
Leading up to the meeting, many legislators and stakeholder groups expected a vote. Disappointingly, the meeting started with Co-Chair Rep. Barbara Smith Warner, D-Portland, announcing that “unfortunately” the committee was not ready to vote.
The committee meeting focused on reviewing the most recent set of amendments. Those amendments, the -17s, represent the first draft of the full bill. Previously the committee had previewed the taxing and spending plans as distinct documents. These amendments put all the pieces of the bill into one.
The bill remains expansive and would add approximately $1 billion of new revenue annually to education funding. In this draft, the broad strokes of the spending plan remain the same as previous drafts: at least 50% to go to K-12 school district investments, at least 20% in early learning investments, and the remainder, normally approximately 30%, to fund statewide initiatives. There were a few technical fixes in the spending side of the bill, but no major policy changes were included.
The committee spent most of the time discussing the taxing portion of the bill. The revenue side also remains the same: a 0.49% tax on commercial activity of businesses above $1 million, with exceptions for many items, including groceries, agricultural activity and fuel and transportation. The committee spent more than two hours discussing the merits of various portions of the tax.
Legislative experts answered questions, and over the course of two hours, the full committee undertook its most extensive tax discussion to date. Some highlights of the discussion included:
The terms “commercial” vs. “corporate” tax and what that means, especially regarding preemption clauses in the bill. The short answer seemed to be that it could have profound effects on future commercial activity taxes for local municipalities, but there remain other taxation mechanisms available to local governments.
The definition of groceries and what that means, including alcohol taxation, ramifications for potential future soda taxes, and agricultural direct sales such as those from a farm stand. The tax impacts “wholesale” and “retail” sales, so no other in-between sales.
Whether or not the new revenue in the tax would add stability to the education funding system in comparison to the current funding system. The answer was that this tax would likely be a stable form of tax, but members of the committee did not agree on whether or not that would mean the “education system” in Oregon was more stable.
The cost of doing business in Oregon, including taxation costs to businesses. There was no clear consensus, but much of the testimony seemed to indicate that costs of business in Oregon are relatively low, generally falling below the median versus other states.
The committee will take the unusual step of meeting at 5:30 p.m. Monday, April 29. The committee has been meeting on Tuesdays and Thursdays. Smith Warner announced that the committee was moving at an “aggressive” pace to try to move the bill out of committee by the end of April.