Oregon lawmakers passed a tax break aimed at small businesses in the state on Monday during a one-day special legislative session convened by Gov. Kate Brown.
The Democrats and legislative leaders emphasized keeping the session focused on passing the new break, and limiting it to a single day.
Speaker of the House Tina Kotex (D-Portland) said in a statement released shortly after Brown’s announcement for the special session that the House was ready to work collaboratively with the Senate and the minority party.
Most Republicans were against reconvening for a special session, because these sessions are allowed for emergencies only.
“So-called emergency sessions can only be called upon ‘extraordinary occasions’ under the meaning at the time of Statehood in 1859,” Sen. Brian Boquist (R-Dallas) said in a press release before the special session. “The Oregon Supreme Court has set precedence for determining legal definitions, and the dictionary of the time does not say reelection is an emergency. An extraordinary occasion in 1859 would have required Senator Bentz to take a steamer from Ontario to The Dalles, then rent a horse to Oregon City, taking more than a week of travel. Likewise, Senator Linthicum would have saddled his horse upon receiving the telegram then traveled more than 10 days to the Capitol.”
Boquist said an instance that did merit “extraordinary occasions” was when Governor Gibbs called the Legislature into session to adopt an anti-slavery constitutional amendment. Others, he said, included Governor Moody calling for a special session to replace a dead U.S. Senator and Governor Olcott calling a session to deal with “fiendish homicides.”
“Fiendish may be the right term for calling an emergency for an $11 million tax cut (session) with the stated intention of the Democrat majority to repeal next year,” Boquist said.
Additionally, many Republican senators released statements voicing they believed the bill was simply a political ploy by Gov. Brown during an election year, and the introduced legislation wouldn’t favorably impact Oregonians.
“Where is the so-called ‘emergency’ prompting the governor to call all 90 legislators into special session? All I see is a political sham, a waste of taxpayer money, and an abuse of power,” Senator Herman Baertschiger (R-Grants Pass) said in a press release just days before the special session. “If Gov. Brown truly cared about small businesses she would have vetoed the $1.3 billion small business tax increase she signed (in February).”
The increase that passed in February –– Senate Bill 1528 –– allowed small businesses to keep the federal deduction, but required it to be added back before calculating state taxes. This time around House Bill 4301 targets business owners who would have been eligible for the Trump (federal) deduction, but by expanding a state deduction instead.
The Associated Press wrote that the current state law gives a tax break on pass-through incomes to some types of businesses, but not sole proprietorships, which are often the smallest independent businesses, and include many independent contractors.
Meanwhile, the new Democratic plan expands that to include sole proprietorships, with a key limit: only businesses with at least one employee qualify, eliminating single-person operations.
“This is the Governor’s bill –– any attempts by the Republicans to shape it or modify its language were rejected by the Democrats,” House Republican Minority Leader Mike McLane said Monday.
However, during the special session Monday, the work committee did not change any of the proposed amendments for the bill, and two of the four Republicans on the bill’s work committee of 10 voted in favor.
The tax plan passed 51-8 in the House and 18-12 in the Senate. Both votes included Democrats who broke from their party to vote against the measure. Had all Republican Senators voted against the passing of the bill, the vote would have tied.
See complete story in Wednesday's Observer