The Oregon Constitution requires a three-fifths vote of both houses of the Legislature to increase taxes. Ballot Measure 104 in the Nov. 6 election would expand that requirement to include any measure that would increase state revenue by reducing tax exemptions or credits or by enacting fees, such as for fishing licenses. It’s a bad idea.
After voters approved the 60 percent supermajority requirement to enact “bills for raising revenue” in 1996, lawyers for the Legislature interpreted it to include measures modifying tax credits or exemptions, known as tax expenditures. But the Oregon Supreme Court ruled in 2015 that “raising revenue” was limited to bills that created a new tax or increased the rate of an existing one. Changing the way a tax is applied — repealing a tax exemption, for instance — was not “raising revenue,” the court said.
Supporters of Measure 104, led primarily by the real estate industry, want to redefine “raising revenue” to include any measure that affects exemptions or tax credits, and throws in fees as well, meaning any of those actions would require a three-fifths vote of the Legislature.
That may sound good in principle, especially to those who think government has too much money already and adjusting how it is collected should be made as difficult as possible. But there are good reasons for letting the Legislature easily adjust tax breaks when it needs to.
Tax credits are frequently used as an incentive to encourage businesses to invest in ways that benefit the public good. For instance, lawmakers might offer a tax break to companies that invest in renewable energy such as solar power. But after some time goes by, and the credit has achieved its purpose, or, worse, has not worked as expected, it makes sense to repeal it. Measure 104 would let a minority of the Legislature protect corporate tax breaks that no longer serve the public.
Adding fees to the mix would mean routine fee increases to cover rising costs to the state would be harder to enact.
As always, locking changes such as this into the Oregon Constitution means removing them later would be difficult. If the Legislature starts abusing its ability to raise fees or removes tax breaks that have widespread public support, opponents can always mount a referendum petition to overturn those actions — and referendum petitions require fewer signatures than constitutional amendments.
Lawmakers are elected to do the public’s business, and in general, they should be allowed to do that without undue interference. If voters don’t like the decisions being made, they can elect different people to make them. We recommend a no vote on Measure 104.