Eight years ago, a proposal to raise Oregon taxes on large businesses had corporations and public sector unions at each other鈥檚 throats.
The tax hike proposed in 2016鈥瞫 Measure 97 led to the most expensive ballot measure fight in state history, with the two sides spending more than $42 million combined. In the end, corporate interests won out: The measure went down in defeat.
This year, Oregon voters will consider a similar taxing idea in the form of Measure 118, one with the added promise of putting money back in their own pockets. But business and labor are no longer split.
Instead, many of the state鈥檚 most active political groups 鈥� and a growing number of politicians on both sides of the aisle 鈥� have come out against Measure 118.
This week the board of United Food and Commercial Workers Local 555, which represents tens of thousands of grocery employees around the state, voted to oppose the idea. It joins Service Employees International Union Local 503 and the Oregon Education Association, whose boards both registered opposition earlier this month over concerns the measure could blow a hole in the state budget.
Meanwhile, business interests from around the country have poured nearly $6 million into a campaign committee that is fighting the measure.
In most races, that kind of pushback would go a long way toward dooming a ballot proposal. But it might not be so simple with Measure 118, known as 鈥淭he Oregon Rebate.鈥�
The measure would levy a 3% tax on any business鈥檚 Oregon sales above $25 million, then divvy up the money raised among Oregon鈥檚 more than 4 million residents, no matter their age. A recent analysis by state revenue officials suggested the policy would reap more than $6.5 billion a year in additional corporate taxes, and send around $1,600 a year to every resident of the state beginning in 2026 鈥� either via tax credits or direct payments.
That number is far from certain, but it鈥檚 likely to be a strong selling point for Measure 118 boosters. The proposal is a pared-back version of 鈥渦niversal basic income,鈥� the idea of alleviating poverty by sending no-strings-attached payments to citizens. It would put Oregon in league with Alaska, which to residents based on revenue from oil production in the state.
Measure 118鈥瞫 backers might have a lot of money to spread their message of easing Oregonians鈥� financial worries.
Josh Jones, a who, in the words of his , 鈥渓ikes Universal Basic Income,鈥� has contributed $480,000 to the measure to date. Two more donors listing California addresses, financier Alexander Tamas and Gisele Huff, president of the Gerald Huff Fund for Humanity, have donated a combined $123,000.
Nearly all of that money was spent collecting signatures to land Measure 118 on the ballot, but the suggestion is clear: Donors with serious money and a desire to explore the promise of no-strings-attached payments to better people鈥檚 lives are taking an interest in Oregon.
鈥淲e鈥檙e playing to win,鈥� said Antonio Gisbert, a Portland resident and chief petitioner behind the ballot proposal. 鈥淎t the end of the day we think that Oregon voters are going to see the value in Measure 118. It鈥檚 one thing for giant corporations to be telling you that this rebate鈥檚 going to be bad for you. I鈥檓 not sure that people are going to believe that.鈥�
In fact, the rebate proposal鈥檚 origins lie partly in the fight over Measure 97. That鈥檚 apparent from the taxing mechanism itself: Measure 97 would have slapped a tax of 2.5% on business鈥檚 Oregon sales above $25 million, whereas this year鈥檚 proposal increases it to 3%.
Back in 2016, Gisbert was an organizer with Oregon AFSCME, a union representing government employees. The core idea of Measure 97 鈥� taxing large corporations that Gisbert says too often pay a laughably low amount of state taxes in order to pour around $3 billion a year into bolstering services like education and health care 鈥� appealed to him.
So when the measure failed by nearly 20 percentage points, Gisbert and some friends started reimagining how to sell a corporate tax hike to voters. He reasoned that Oregonians were put off by the notion of handing billions to a state government they didn鈥檛 trust to spend wisely.
鈥淲e looked around and said, 鈥榃ell, what can we build on? Let鈥檚 not reinvent the wheel and come up with a new tax completely,鈥欌�� Gisbert said. 鈥淭hen, of course, our big spin on it was: Okay, let鈥檚 use this money to get every Oregonian a cash rebate.鈥�
The Measure 118 campaign is hoping to sell Oregonians their vision of fairly taxing big business in order to increase prosperity, including slashing childhood poverty and virtually ending state taxes for lower-income Oregonians.
According to the state鈥檚 Legislative Revenue Office, the measure would 鈥渟ignificantly reduce or eliminate personal income tax liability鈥� for Oregonians who make less than $40,000 a year. Collectively, those people would go from paying $458 million a year in state taxes to receiving a refund of $550 million under the rebate policy, the office said.
All of those outcomes seem in step with the aims of the state鈥檚 big labor unions, which tirelessly preach policies that can lift up lower-income people. But Gisbert鈥檚 most powerful allies in the Measure 97 fight are preparing to oppose him.
Three of the state鈥檚 four largest unions have already come out against Measure 118. The remaining holdout 鈥� Oregon AFSCME, where Gisbert once worked 鈥� just hasn鈥檛 held a vote yet.
鈥淭here are so many questions about how it鈥檚 written and how it鈥檚 going to be interpreted,鈥� Joe Baessler, Oregon AFSCME鈥檚 executive director, said in a recent interview with OPB. 鈥淭hat just makes us super nervous.鈥�
It鈥檚 not that unions are suddenly opposed to increasing taxes on corporations. They鈥檙e chiefly concerned with recent findings that Measure 118 could wind up unintentionally hobbling the state鈥檚 general fund budget, money their members rely on.
The reason centers around the way Oregon taxes businesses. Under the tax code, many large corporations either have to pay taxes as a percentage of their taxable income, or pay a 鈥渃orporate minimum tax鈥� that is based on their Oregon sales, whichever is larger.
Measure 118 would increase the amount big companies owe under the minimum tax, and would result in more businesses paying far more tax via that route, an estimated $13.6 billion in the 2025-27 budget cycle.
But, according to legislative attorneys, the measure would also mean the state receives less money via the other part of its business tax code, the one based on taxable income. And according to legislative attorneys, nothing in the measure gives the state the ability to recoup that loss.
Under this reading of the law, the state would rebate around $13.6 billion in 2025-27, all of it raised via the new tax, but at the same time, lose out on more than $1 billion in business taxes that would have normally flowed into the state鈥檚 general fund.
The specter of a budget cut has become a major concern for labor groups and politicians. The Legislature鈥檚 four most powerful Democrats issued a joint statement last week, laying out their objections.
鈥淚n these tough times, we all want working families to get every break they can, but Measure 118 is not the answer,鈥� the Democrats said. 鈥淲e have grave concerns it will slow job growth and cause cuts to critical services like road maintenance, fire fighting, and addiction recovery.鈥�
In total, oppose the measure, according to the No on 118 campaign. Two members of Congress, Gov. Tina Kotek and Treasurer Tobias Read have also come out against it.
Gisbert said his campaign disagrees with the legal analysis that suggests his measure would have budget repercussions. But if that reading ultimately prevails, he is open to helping lawmakers tweak the language of the measure after it passes to ensure it is revenue-neutral. (That could reduce the amount Oregonians can expect as a yearly rebate to $1,400 or less.)
鈥淲e can all sit down and implement this thing correctly and justly as intended,鈥� Gisbert said. 鈥淥ur goal is to keep the state whole.鈥�
That won鈥檛 placate many opponents. Oregon Business & Industry, the state鈥檚 largest business group, has so far marshaled the most forceful campaign attacking Measure 118.
A argues higher business costs would increase the prices of goods and services, a conclusion shared by state analysts, who found it could result in a 1.3% price increase by 2030.
鈥淚t鈥檚 a tax on sales 鈥� not profits,鈥� the website says. 鈥淭hat means Oregon businesses would be forced to pay this new $6.8 billion tax regardless of whether they make a large profit, make a small profit, or are losing money.鈥�
Whether labor unions jump in with their own opposition campaign remains to be seen, said Melissa Unger, executive director of SEIU Local 503. If they do, their arguments are likely to differ from those coming from business.
鈥淭his is a bunch of outside folks trying to play with Oregon to try to see what鈥檚 possible nationally,鈥� Unger said. 鈥淲e鈥檙e not just a ballot measure playground.鈥�
Gisbert, facing opposition from his old allies, says he doesn鈥檛 take it personally.
鈥淲e can still be friends,鈥� he said. 鈥淎t the end of the day, I would not be doing this work if I didn鈥檛 believe that The Oregon Rebate is going to be good for every person in Oregon. Whether you鈥檙e a union member or not, you鈥檙e going to get those 1,600 bucks.鈥�
