Oregon lawmakers want to raise an additional $1 billion a year in taxes to pay for new initiatives to improve K-12 education.

The Legislature wants to raise a lot more money this session, despite already being on track to see revenues increase by 5%.

Its decision a few years ago to expand Medicaid has led to a $254 million shortfall, despite a raft of taxes voters approved last year to help fund the program. A $300 million tobacco tax hike is on tap to fill the gap.

It has voted to hold back $108 million owed to Oregonians under the “kicker” program, which rebates money to taxpayers when receipts exceed projections by 2%. And it is proposing a carbon cap scheme that could raise as much as $700 million while increasing the cost of fuel and everything transported by truck or train.

But one tax at a time.

Under the first proposal, businesses would pay a half a percent of their gross receipts over $1 million. Businesses would be able to deduct 25% of either labor or capital costs, which could push some businesses below the gross receipts threshold. Sales of groceries, gasoline and diesel would not be taxed under the proposal.

Supporters say about 40,000 of the state’s 460,000 businesses would be subjected to the tax. And to further help sell the plan, the proposed legislation would cut personal income tax rates for all but those in the top bracket by a quarter of a percent.

This plan is similar to the ill-fated Measure 97, an initiative petition voted down in 2016.

That measure proposed Oregon’s largest tax hike ever. It would have imposed on “C” corporations an additional 2.5% tax on gross sales in Oregon exceeding $25 million. It would have raised $3 billion per year.

Democrats sponsoring the current proposal have obviously scaled back their ambitions. But even in its pared-down form, the proposal has the same shortcomings as Measure 97.

Advocates like the gross receipts tax because they claim businesses use recognized deductions to avoid corporate income taxes. The biggest problem with a gross receipts tax is that it must be paid regardless of whether the business in question makes a profit. High-volume, low-margin businesses such as farming can get caught in the net without making a dime.

The impact of the tax is cumulative, with each vendor in a supply chain adding to its price to help cover the cost. The end user of a product — a farmer with a piece of farm machinery — pays the full load without necessarily being able to pass that along.

Oregon faces a lot of tough problems. The unfunded liability of the Public Employee Retirement System is a daunting burden that costs local school districts an ever-increasing share of their revenues. At the same time, test scores and graduation rates are abysmal.

Lawmakers see the gross receipts tax as an easy source of big money. They need to look elsewhere.

Of all the things parents want to pass on to their children, debt is probably not one. House Speaker Tina Kotek has suggested doing it anyway.

One of the ideas she has been thinking about as a partial solution to the state pension program’s $27 billion unfunded liability is kicking the can down the road. Delaying payments. Stretching out the liability farther into the future.

The idea in pensionspeak is to lengthen the amortization period for the Public Employees Retirement System. In plainer language, that means stretching out the number of years used to calculate the time to raise the money to pay PERS pension benefits.

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Employees of businesses with thin profit margins should start worrying about what the Oregon Legislature is scheming to do to their jobs. House Bill 3427 creates a tax that will make it even harder for those businesses to prosper.

The Legislature is not going to be able to come up with a tax everyone likes. But it should try to come up with one that is fair. HB 3427 fails.

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Surely the biggest task Oregon lawmakers tackle every two years is coming up with a budget. This year the task is complicated by a couple of things. Legislators always want more money — even if revenue is already increasing. Too, the state is faced with a huge and growing unfunded liability in its Public Employees Retirement System fund, a nearly $27 billion projected shortfall that costs money at virtually every level of government in Oregon.

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PERS will swallow much of the $2 billion that the Oregon Legislature is trying to raise for public schools. Even the Legislature’s Democratic leadership concedes this.

And here’s another catch: To net that $2 billion in additional revenue — primarily by substantially increasing business taxes — the Legislature might have to pass a tax increase of $3 billion or more for the next two years.

Business groups agree that schools need more money, which is why they are raising the PERS alarm.

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PERS will swallow much of the $2 billion that the Oregon Legislature is trying to raise for public schools. Even the Legislature’s Democratic leadership concedes this.

And here’s another catch: To net that $2 billion in additional revenue — primarily by substantially increasing business taxes — the Legislature might have to pass a tax increase of $3 billion or more for the next two years.

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