Status (overview) of bill: https://olis.leg.state.or.us/liz/2019R1/Measures/Overview/HB3427
THIS BILL IS THE CAUSE FOR THE REPUBLICAN SENATORS WALK OUT.
This bill is a $1.6 billion biannual business sales tax. What started as one paragraph study is being gut-and-stuffed into an 82 page business tax bill leaving many unaware.
Establishes the Fund for Student Success (FSS). Allocates moneys in the FSS to the State School Fund, Student Investment Account (SIA), the Early Learning Account (ELA), and the Statewide Education Initiatives Account (SEIA).
Establishes a commercial activity tax (CAT) on Oregon businesses effective for the tax year beginning January 1, 2020 and establishes the Fund for Student Success separate and distinct from the General Fund. The CAT is estimated to generate $1.6 billion in 2019-21 biennium. For 2019-21, the proceeds will be distributed $623.0 million to the State School Fund, $20.0 million to the High Cost Disabilities Account within the State School Fund, and the remainder divided between the Early Learning Account (20%), the Statewide Education Initiative Account (30%), and the Student Investment Fund (50%). None of the funds are dedicated to the classroom and will only reach the classroom through grants, but not for all schools. See the list here.
This $1.6 billion business sales tax could potentially cost an average family $600 per year. Businesses will be forced to charge higher costs for everyday items such as clothing and other home goods. This is a hidden sales tax so the customer won’t see the tax added to our receipts.
Supporting the State School Fund with money that will cause more families into low income, causing stress on families and students, lacks consideration of the consequences. This type of money won’t improve graduation rates.
Businesses will be taxed on their sales, not profits. This means businesses will be taxed even when they are losing money, making it even harder for honest businesses to grow and persevere through tough times.
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“A common thread we’ve continued to hear from the Democrats is that the money from this backdoor gross receipts sales tax will be used for education, but without a constitutional amendment, the funds are not dedicated to that purpose,” said Senate Republican Leader Herman Baertschiger, Jr., R-Grants Pass. “Even worse, the majority party has already testified in the House Education Committee about re-allocating dollars from the general fund that would typically go to K-12 programs so the education budget won’t get the boost it really needs.”