Oregon AFT: What we need to know about Ballot Measure 118 (IP 17)

The following ws produced before IP 17 became Ballot Measure 118:

"Oregon Rebate" Ballot Measure Analysis - What to Know

This November, Oregonians will vote on a recently qualified ballot measure going by "Oregon Rebate", Measure 11X (aka, IP 17). This is a static cash check to Oregonians created by raising the corporate minimum tax.

Here are some topline analysis from our coalition partners in the pro-education revenue and labor policy spaces, as well as a new Legislative Policy & Research Office report from the State of Oregon:

IP 17 would result in a $1 billion cost to the General Fund next biennium by shifting over constitutionally required education funding from corporate taxes to the general fund

In addition, the Legislative Revenue Office estimates IP 17 would cost at least $1 billion in general funds to get off the ground

IP 17 provides a non-progressive rebate: giving the same amount to the highest income Oregonians and the lowest income Oregonians

AFT-Oregon is committed to stronger funding and a multi-year revenue campaign in coalition with labor and advocacy groups. This measure may set us back decades and hamper new funding efforts for higher education.

The Politics, Policy, Legislation, and Solidarity Council and our Vice President for Political Action have been approached multiple times by the backers of this bill since 2022, and concerns have been raised to the petitioners each time without being addressed. As a result, our members have never endorsed this measure.
_____________________________________________________

Corporations and the wealthiest in Oregon should pay their fair share. Everyone should have the ability to cover their basic needs. Many people have heard these lines communicated by the Oregon Rebate - and these things are true. However, the approach of IP 17 raises dire concerns about whether dollars will go to those who need them most, the actual impact on low-income families, fairness, and implementation.

1. Legal complications for Oregon

The petition language is unclear on the funding mechanism for the rebate program because of other constitutionally mandated funding allocations. Even if there were a 1:1 match between corporate tax increases and subsequent rebate checks, IP 17 will require new general fund expenditures to occur for State School and Highway Funds.

2. Immediate new General Fund costs (Oregon is already facing a $300 million shortfall for the 2025-2027 Budget)

IP 17 would shift over $1 billion in constitutionally required education funding from corporate taxes to the general fund for 2025-2027. The Oregon Constitution requires that the "corporate kicker" be dedicated to the State School Fund. If passed, IP 17 would increase the corporate tax collection and the corporate kicker, but then allocate those dollars to the rebate. The result would be that next year, Oregon would have to somehow come up with the funds to meet the Constitutional requirements towards the State School Fund with new dollars.

In addition to $1 billion in shifted funds due to constitutional requirements, IP 17 would cost at least $1 billion in General Fund dollars to get off the ground. Because of the difference in time frames between when corporate taxes are collected in Oregon, when budgeting occurs, and requirements in IP 17, an estimated $1 billion would need to come out of our General Fund to meet obligations for rebate checks in 2025 and 2026. And this is before considering the costs of replacing lost benefits.

Unknown additional new costs to replace state benefits. Under the measure, if people choose to take the rebate check, the State has to pay for benefits lost if the additional income pushes them out of eligibility. Aka, if the $750 impacts OHP, Medicaid, SNAP, or other benefits, Oregon will need to foot the bill to make the person held "harmless." It's unknown how replaced health care coverage would be administered, and the full impact of how this directly hits Oregon's federally obtained funds for programs is also difficult to predict. But it isn't cheap, and those funds would need to come from the General Fund.

3. Fairness and equity

IP 17 gives the same rebate to the wealthy as it does our most vulnerable communities. IP 17 does not center families and communities who need it most, and the petitioners have not addressed or integrated any of the ample feedback given to them. People who do not receive the money will get checks, reducing the amount that lower income people could potentially receive. A better approach would be a targeted basic income program or cash assistance program similar to other countries who provide cash assistance, or such programs advocated for by progressive groups in Oregon.

4. Local verses out-of-state approaches

IP 17's approach - like the kicker - favors the wealthy, does not resolve budget issues long-term, and has unintended consequences. The wealthy California venture capitalists who spearheaded the funding of this campaign in Oregon did not have deep, or seemingly any, knowledge about Oregon's unique tax, revenue, and Constitutional funding obligations. This means that this program will come at the expense of schools, higher education, health care, and other things Oregon pays for.

Oregon's racial and economic justice groups have been sidelined by the Chief Petitioners. There is a long-time Oregon coalition working on Basic Income that works for our state which includes Urban League, Oregon Center for Public Policy, and many other organizations. There have been pilot programs and studies done which have paved a solid path already. However, the Chief Petitioners of IP 17 were invited into this space to work with these organizations, but instead moved forward alone with this approach. This raises serious questions about the viability, impact, and consequences.

Parachuting into Oregon's election landscape. The campaign is funded by tech millionaires who have refused at every step to work with the labor movement and Oregon's economic and racial justice groups. They have ignored concerns from local organizations. Some believe that Oregon's Initiative Petition process, which is one of the "cheapest" in the nation for outside funders to influence, have been taken advantage of. It's worth considering whether Oregon should be an experiment for outside interests to play with our election system through paying for signature gathering with out of state money. If successful, this sets a dangerous long-term precedent.