No on 97 – Oregon’s Largest Tax Proposal Ever

In a few short weeks it will be hard to miss the battle taking place on Oregon’s ballot between those
advocating for more tax revenue for state government versus those against it. The $6 billion tax increase proposal is the largest in state history and would be paid on the sales of products and services that Oregonians buy every day. The projected cost for the average Oregon household totals over $600 a year.

For months, Oregon Restaurant & Lodging Association has been officially opposed to Measure 97 (previously known as Initiative Petition 28). In partnership with consumers, families, small and large businesses, and organizations from across Oregon, ORLA will fight hard against this tax proposal and the harmful impacts it would have on our great state. Our biggest concern continues to be the impacts the measure will have on disposable income given the industry’s reliance on the ability of Oregonians to eat out on a regular basis. In addition, direct increased costs relating to food and utilities in particular will further disrupt the fragile profit margins our members are working hard to protect.

 We want all industry members to take the time to learn more about the proposal and engage in conversations with friends and family to discuss what’s at stake. In one of the most glaring mistakes, you will see proponents in favor of the measure praising the tax for its ability to boost dollars for education when nothing in the structure of the measure guarantees that any of the tax revenue would actually be spent for that purpose.

Given our recent track record with Cover Oregon and other wasteful government programs, my hope is that there is common agreement across party lines that cutting a blank check for over $6 billion to our state government might not be the wisest decision.

There is a wealth of information available online to digest at your own pace as you prepare to make decisions about your views on Measure 97 this election year. For me personally, the independent study conducted by the Legislative Revenue Office takes the cake. It concludes that if Measure 97 were to pass, Oregon would lose over 38,000 private sector jobs.

 These facts may give you confidence that Measure 97 has very little chance of passing but we cannot rest on our laurels or become complacent about the real threat it poses to disposable income flexibility for Oregon families and increased costs for your business. In order for our industry to continue its impressive pace of growth and success, damaging measures like Measure 97 must be defeated and defeated soundly. It is time to send a message that massive tax increases on the backs of working Oregonians will not result in a better Oregon. Instead, it creates larger rifts between private sector businesses who churn our state economy and the Oregonians working hard as part of the public sector.

This fight at the ballot box will further sever those relationships so please take the time to educate yourself on the realities of Measure 97 without becoming part of the animosity or ill will that pits Oregonians versus Oregonians.

Please take the time to visit Defeat97.com to learn more about the coalition we are officially a part of and how you can be involved. Let’s stand together against harmful proposals and continue building a stronger Oregon for our children and grandchildren. | Jason Brandt, President & CEO

Help Defeat the $6 Billion Tax on Oregon Sales

As you know, Initiative Petition 28 (IP28) – a proposed new tax on Oregon sales that would cost Oregon consumers and Oregon businesses billions – will be on the November 2016 statewide ballot.

IP28 would impose a huge new $6 billion tax on sales – the largest tax increase in state history – and would increase costs for Oregon businesses, working families and consumers with no guarantee where the money would be spent. If passed, this extreme measure would make our industry less competitive and make lodging and dining out costlier for our Oregon customers.

Defeating IP28 is a priority for the Oregon Restaurant & Lodging Association. We’re asking you to join the Defeat The Tax On Oregon Sales coalition and help spread the word about this costly and damaging proposal.

Some important facts about IP28:

• IP28 would tax sales, not profits. Businesses would be required to pay the new tax whether they have a large profit, small profit, or no profit at all. 

• IP28 does nothing to guarantee the new tax revenues would go to schools, healthcare, or senior services. All of the new taxes would go to the General Fund, giving politicians and bureaucrats a blank check to spend billions of dollars as they please with no accountability to the public. 

• IP28 would impose the worst kind of tax on sales because it would be added at multiple steps in the production process – a “tax on a tax” – cascading into much higher prices for items Oregonians buy every day, without any exemptions. Electricity, fuel, insurance, food and many other items and services we rely on would be subject to the tax – making Oregon products more expensive and Oregon companies less competitive.

• A study by the nonpartisan Oregon Legislative Revenue Office (LRO) concluded that about two-thirds of this tax on sales would end up being paid by Oregon consumers, costing the average Oregon household more than $600 every year.  

• The LRO estimated passage of IP28 would result in the loss of more than 38,000 private sector jobs, impacting Oregon’s overall economy, small businesses and multiple industries.

Here’s where you come in. 

If you haven’t already, please join the coalition. Once you’ve joined, you will receive news and updates about the efforts to defeat IP28 and what you can do to help.

Visit the campaign website, DefeatTheTaxOnOregonSales.com, where you can read news and information about the negative impacts of IP28, and donate to the campaign. 

Also, like the coalition on Facebook and follow them on Twitter to share the word on social media about why IP28 is a bad idea for Oregon.

We need your commitment to help our industry by joining the effort to defeat the most egregious tax increase in Oregon history.

If you would like more information about the campaign to oppose IP28 or want to get involved in other ways, please contact the campaign at info@DefeatTheTaxOnOregonSales.com or (877) 575-9950.

Fighting Lodging Tax Creep

In virtually every corner of the state, local and county governments seem to have their eyes fixed on lodging taxes and opportunities to raise them. The recent successes of the lodging industry are being widely reported as more tourists find themselves drawn to Oregon’s wide ranging spectacles. And we of course welcome them with open arms as growth and sales continue to increase.

However, the success we currently enjoy cannot continue in perpetuity. We have been incredibly fortunate in the prolonged status of the current economic recovery and we realize the next recession is not a matter of if but a matter of when.

This distinction seems to be lost on our local and regional representatives who sometimes view the lodging sector as an easy target for their general fund woes. Why not add an extra percent to the local lodging tax to solve our ‘XYZ’ revenue shortfall? Can’t they just pass the tax on to their guests?

If only it were that simple. As “lodging tax creep” continues throughout the state, we’re finding the need for a renewed commitment to support our local and regional stakeholders who are fighting the urge of local governments to tack on more tax burden on the administrative shoulders of our industry.

For one, we’re already making it very clear that we will be strongly opposed to lodging tax increases moving forward unless there is local support from the lodging community. To that end, we are encouraging local governments to reach out to their local lodging stakeholders as a crucial first step if they feel they have a case for why a local lodging tax rate should be adjusted.

Cost drivers within government are strapping city managers and city councils who are determined to balance their budgets. These significant rises in expenses continue to be driven by pension and healthcare obligations that require more revenue as retirees live longer lives and as healthcare premiums continue to rise.
We fully understand these challenges and openly welcome conversations with local governments that feel the lodging tax is somehow a piece of the answer to these challenges.

Oregon Restaurant & Lodging Association created a “Tourism Best Practices” handout as part of our renewed effort to carefully track lodging tax creep across Oregon. This document is one tool that can be used by lodging operators to help explain the important symbiotic relationship our industry shares with local government partners.

Our success is their success until lodging tax creep gets out of control. I believe we are on the brink of crossing that unsustainable threshold and as a result, we need to be more aggressive in protecting local governments from biting the hand that they rely upon for sustained tourism promotion as well as partial general fund support.

If you are aware of lodging tax creep in your community, please contact us at Advocacy@OregonRLA.org. | Jason Brandt, President & CEO

Roseburg City Council Shot Down Proposal That Would Have Reduced VCB's Marketing Budget

On March 28, Roseburg City Council rejected a proposal to use hotel and motel taxes to revamp the South Umpqua waterfront. Under this proposal, the city’s VCB would have had about $200,000 a year less in their advertising budget. Drew Baily, regional representative for ORLA, provided testimony before Roseburg City Council in opposition to this proposal.

Here’s an excerpt from his testimony:

“At this time, we (ORLA) do not support the proposal to reduce the Roseburg marketing budget allocated to tourism promotion and ask that you table any discussion of reducing the funds used for marketing. The hospitality industry is one of the leading economic drivers for the state and we ask that you continue to support and promote a growing, sustainable and productive industry in Roseburg.

There may never be a right time to raise taxes or put jobs at risk, but there certainly are wrong times to do so. Douglas County’s unemployment rate remains in double digits and any decision that puts existing and future business growth at risk should be avoided if at all possible.

Some wine industry experts predict that Southern Oregon and the Umpqua Valley are positioned to be the next Napa Valley. Roseburg should reaffirm its commitment to spurring on economic growth through promotion of sustainable, high yield industries. The tourism industry is one that creates a positive economic impact on communities throughout Oregon.

We ask you to reject any proposal that threatens to further weaken the local tourism economy or negates the long-term benefit gained from a robust tourism industry. Thank you for the opportunity to provide input into this important matter before Council.”

Read more on ORLA's advocacy efforts.

Capital Gains Bills in Senate Revenue Committee

Last Wednesday, the Senate House Committee heard testimony on Senate Bills (SB) 8, 883, and 714. Each of these bills proposes a reduction on Oregon's capital gains tax. SB 8, introduced by Senate President Peter Courtney, will reduced the tax, but does not give a specific rate in the text of the bill. Bills 883 and 714 will introduce a progressive tax on capital gains, however, SB 883 has a sunset provision that will allow the bill to only be effective until 2013.

A capital gains tax reduction is imperative. The state of Oregon currently has a capital gains tax rate of 11%, tied for highest in the nation with Hawaii. Due to this high tax rate, Oregon stands to lose business to neighboring states that either charge a lower rate, or have no capital gains tax at all (such as Washington). Not only does this mean lost jobs for Oregonians, but also lost revenue for the state.

In Wednesday’s Senate Revenue Committee hearing, a number of people turned out to support these proposed reductions, including Senator Olsen, Senator Atkinson, and Senator Read. Senator Atkinson discussed specific cases he witnessed in which business associates decided to move to Washington to avoid capital gains taxes. Oregon business representatives also turned out to argue for these important bills, stressing competition with Washington, and a loss of angel investments due to these taxes.

It is important that capital gains taxes in the state of Oregon are reduced. To save jobs and our economy, please contact your senator and ask them to support these important bills.

Bill Perry
Vice President of Government Affairs

ORLA reps discuss industry issues with Oregon’s congressional leaders

Last week a small contingent of ORLA members met with Oregon members of Congress during the second day of the AH&LA Legislative Action Summit in Washington, D.C. We were able to meet with Congressman Greg Walden, Congressman Kurt Schrader and legislative assistants for Congressman Earl Blumenauer and Senators Ron Wyden and Jeff Merkley. The visits were productive and our voice was heard on issues we felt important to our industry.

We discussed these specific issues during each of our congressional appointments:

Online Travel Companies - The Expedias of the world are paying local room tax based on their negotiated "wholesale" rate while selling the rooms at a higher retail rate. The result is lower income for the local taxing authority, and a less than straightforward transaction with the consumer who thinks they've paid the room tax on their higher transaction. The danger is that the taxing authority may come after the hotel for the remainder of the unpaid (in their eyes) taxes.

Tourism Investment - We discussed how the funds are being developed for international marketing of travel to the U.S. and the need to ensure it is spent promoting tourism and not taken to fund other programs in these tough budgetary times. These marketing dollars generate increased spending in the U.S. as well as job growth in the tourism industry among restaurants and lodging properties.

International Travel – We need to make it easier for the Asian rim nations to obtain visas to visit the U.S. The current process is cumbersome and it can take 45 - 60 days. That discourages travel to the U.S. as it takes as little as 10 days to obtain visas to other nations competing for the Asian vacation traveler. China alone is projected to have 100 million of its citizens travelling internationally in the coming years. It is to Oregon’s advantage as a Pacific Rim port to do all it can to encourage ease of travel for this lucrative and extensive market.

Unions - We also discussed the National Labor Relations Board (NLRB) and the pro-union makeup of its board. They have moved from the intended judiciary activities it was designed to perform to one of a more regulatory and rule making model that is intent in providing as much assistance as possible for union organizing activities. We left a list of previous rulings by past NLRB boards (a judiciary function) that the current NLRB board is reviewing with an eye to issuing new rulings that are more pro-union in nature or anti-business in nature depend on your viewpoint.

Steve McCoid
President / CEO