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Tax bills clear Oregon Senate; governor expected to sign

Mitch Lies, Capital Press 6/11/2009

SALEM - The Oregon Senate on Thursday, June 11, approved tax increases on corporations and the state's wealthiest households, despite failing to generate a single "yes" vote from Republicans.

The strictly partisan approval came one day after the "no" vote of a Portland Democrat temporarily derailed the package. The package is contained in two bills - one that raises corporate taxes and one that raises income taxes for households earning more than $250,000.

The revenue-raising bills needed "yes" votes from all 18 Democrats in the 30-member Senate to obtain the supermajority needed to pass.

Sen. Mark Hass, D-Portland, who voted "no" on the corporate tax increase bill one day earlier, changed his vote after lawmakers reached an agreement that would place revenue generated from corporate tax increases in the state's rainy day fund beginning in 2013.

The package raises the corporate minimum tax from its current $10 to a minimum of $150. The tax is determined on a sliding scale based on gross sales receipts. It caps at $100,000 for businesses with $100 million in sales.

House Bill 3405 also raises some filing fees and increases taxes for companies that generate more than $250,000 in taxable income.

The bills are expected to generate $733 million to help fill a $4 billion state budget gap.

Senate Republicans - like House Republicans did previously - roundly rejected the tax increases.

"These taxes will undermine the small businesses that create jobs and help communities around Oregon thrive," Sen. Chris Telfer, R-Bend, said.

"We're asking people who are potentially operating at a loss to pay an increase in taxes," said Sen. Jeff Kruse, R-Roseburg.

"We've already lost 40,000 jobs in the timber industry," said Sen. Fred Girod, R-Stayton. "This is ridiculous."

Democrats hailed the package, saying it brings balance to the state's tax structure and is necessary to maintain vital state services.

"It's time to bring more fairness and equity to Oregon's tax code," Sen. Diane Rosenbaum, D-Portland, said.

"This state will go into chaos without these bills," Sen. Alan Bates, D-Ashland, said.

Gov. Ted Kulongoski hailed the revenue-raising package in a press release issued shortly after the Senate's actions.

"This vote was not easy," Kulongoski said in the release, "but it was necessary to protect our middle class and prevent devastating cuts to programs like education, health care and public safety."

The bills now go to the governor's desk, where they are expected to be signed into law.
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