Tax and Fiscal Policy

Background

Given the uncertain effects of inflation and tightening monetary policy on Oregon’s economic outlook and given the continued effects of significant state and local tax increases, OBI’s tax policy priorities will remain largely unchanged in 2023. To protect Oregon’s employers and their employees, OBI will oppose all attempts to raise existing taxes, create new taxes or reduce or eliminate important tax incentive programs. Importantly, OBI also will seek to improve Oregon’s competitiveness and mitigate the effects of recent tax increases by pursuing a collection of tax, incentive and regulatory reforms.

OBI will continue to advocate for restrained spending for new or expanded state programs and services. OBI will continue to urge lawmakers to base spending decisions on current revenue sources and realistic expectations of future revenue streams. OBI will not support new or expanded programs that require new or expanded taxes.

Policy Principles

Do No Harm: Given the economic uncertainty currently affecting employers and employees, and given the significant tax increases that have occurred in Oregon in recent years, OBI will oppose all temporary and permanent business tax increases.

Spending Restraint: OBI will encourage lawmakers to carefully manage the state’s significant cash reserves. These resources should be carefully dedicated to the maintenance of critical state services in future biennia and used to mitigate any potential revenue shortfalls.

Innovation and Growth: OBI will support a focus on innovation and economic growth, promoting policies that support job creation, private investment, innovation, employer retention and a positive business climate. OBI will urge policymakers to recognize that a thriving private sector is the best way to sustainably support Oregon’s critical public services.

Personal Income Taxes: Recognizing the increasing burden on personal taxpayers, as well as pass-through business entities both statewide and at the local level, OBI will oppose temporary and permanent increases to the Oregon personal income tax.

Federal Connection: OBI will seek to maintain connection to the federal tax code unless good business reasons exist not to connect.

Credits and Incentives: OBI will support the preservation and creation of tax credits and incentives for economic development and business investment.

Competitiveness: OBI will support policies that improve Oregon’s competitiveness relative to other states.

Tax Consistency: OBI supports the alignment of state and local tax structures and compliance requirements.

CAT Changes: OBI will oppose increases to Oregon’s corporate activity tax (CAT) and support efforts to reduce its pyramiding effects.

Property Taxes: OBI will oppose any proposal to change Oregon’s property tax structure that disrupts the balance between business property taxpayers and personal property taxpayers.

Prioritization: OBI will support the prioritization of existing critical programs.

New Initiatives: OBI will oppose or seek to delay costly new initiatives with little discernable benefit for employers and employees.

Legacy Programs: OBI will urge the Legislature to look for ways to reduce the cost of legacy programs, such as PERS and PEBB, that affect the budgets of state and local governments.

Long-Term Forecasting: OBI will support the use of long-term budget forecasting and planning (5-10 years), which will allow lawmakers to better weigh program priorities and required funding.