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    • Voters will decide on Measure 118, known as the Oregon Rebate
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    Voters will decide on Measure 118, known as the Oregon Rebate

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    Supporters of Measure 118, also known as the “Oregon Rebate,” say its passage would help working families and reduce child poverty.ty, making Oregon the first state with a universal basic income program.

    Voters are being asked whether to increase the minimum tax on businesses with Oregon sales of more than $25 million a year by 3% and distribute the proceeds to every Oregonian starting in 2025 in the form of a refundable income tax credit or cash payment.

    Portland resident Antonio Gisbert, a former organizer for the American Federation of State, County and Municipal Employees, was the lead sponsor of the measure. More than 120,000 valid signatures were submitted to send the measure to Oregon voters.

    The Oregon Department of Revenue estimated the rebate would be $1,600 for every resident who lives in the state more than 200 days per year, including minors. A Legislative Revenue Office report estimates the initial credits would range from $1,035 to $1,286.

    Less than 2% of companies would be affected by measure 118

    Legislative analysts gave lawmakers an updated report on Measure 118 during the legislative committee days in September. They noted that Measure 118 would not change current tax rates — 6.6% for incomes under $1 million and 7.6% for incomes over $1 million. — based on the net operating result.

    “Oregon corporations will continue to calculate their taxes based on both the net income tax rates and the corporate minimum schedule and pay the higher of the two,” the analysts said.

    According to the report, most C corporations — about 34,600 — would not be affected by the measure because their revenue in Oregon is expected to be under $25 million. Another 188 C corporations would be unaffected because the tax from the marginal rates is expected to remain greater than their minimum tax.

    The analyst said about 1.8% of C and S corporations would see a tax increase under Measure 118. These companies are responsible for about 65% of corporate taxes, which would rise to about 94%.

    “The biggest increases would be felt in the wholesale and retail sector, from $396 million to $3.3 billion.” is stated in the report. “The share of taxes paid by these sectors would increase from 29% to 41%. The largest percentage increase for any sector would be for utilities, from about $8 million to $152 million.”

    State revenue analysts warn of potential impacts on the general fund

    Legislative Revenue Office analysts estimate that Measure 118 could increase corporate tax collections by $1.3 billion during the 2023-2025 biennium (if passed, this measure would increase by the middle of the 2025 fiscal year, which ends June 30, 2025 ), are entered; $14.7 billion in the 2025-27 biennium; and $15.6 billion in the 2027-2029 biennium.

    Their report also said the rebate program could mean an increase in corporate funding for 2023-2025 would go towards education funding. A revenue forecast released in August predicted operating profit of $883 million. Any increase in corporate tax collections during the two years would increase the kicker.

    And analysts reported that Measure 118 would result in negative net cash flow and a reduction in transfers to the state’s Rainy Day Fund because corporate tax collections would be less than the amounts needed to fund the rebate program.

    The report assumes the measure would result in 90% of C corporations with Oregon revenues greater than $25 million paying the minimum tax, instead of the 40% that currently pay a minimum tax. That’s because the corporate taxes that many C corporations owe would shift from the rate tax to the minimum tax.

    “As a result, there would be an increase in revenue (to the state) from the minimum tax and a decrease in revenue (to the state) from the tariff tax,” the report said.

    The net cash flow impact would be positive in the current budget cycle but negative by $547 million in the 2025-2027 budget, analysts said.

    The analysis estimates that at least 1,400 C corporations and nearly 800 S corporations would be affected.

    Opposition to and support for Measure 118

    Hundreds of businesses, state legislative leaders and Gov. Tina Kotek oppose the measure. The Polk County Board of Commissioners passed a resolution opposing the measure in September. And the Oregon Senate Republican Caucus called it a “dangerous experiment.”

    The Defeat the Costly Tax on Sales committee has reported more than $10 million in contributions. Contributions include $1 million from the Grocery Retail PAC, $250,000 from US Bank, $250,000 from Wells Fargo and out-of-state donations, including $250,000 each from Walmart, Home Depot and Weyerhaeuser.

    Opponents say taxing companies the extra 3% would raise prices and slow job growth.

    Supporters say the “rebate” would help working-class families — a family of four would get $6,400 a year — and reduce child poverty in Oregon by 49%.

    Supporters include the Oregon Progressive Party and the Oregon Working Families Party. Two Oregon tenants’ rights organizations have also endorsed the measure: Community Alliance of Tenants and Portland Tenants United.

    “This rebate provides immediate relief in a volatile and often predatory housing market. For too many, a $1,600 check is the difference between a stable home and homelessness,” Kim McCarty, executive director of the Community Alliance of Tenants, said in a news release.

    Yes, out of 118 organizers say the measure would strengthen financial security in the state. They also pushed back against the claim that the reduction would impact general resources. The implementation would be covered by the new revenues and lawmakers could pass legislation to address any concerns, they say.

    Two $100,000 out-of-state contributions in support of Measure 118 from Jones Holding LLC (owned by tech entrepreneur Joshua Jones) were reported in September by the Oregon Rebate PAC. Jones also contributed more than $600,000 through various donations since 2023. San Francisco mayoral candidate Dylan Hirsch-Shell also contributed $100,000. Both are in favor of a universal basic income.

    Dianne Lugo covers the Oregon Legislature and equity issues. Reach her at [email protected] or on X @DianneLugo

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