Oregon House, Senate pass first pieces of bargain

SALEM, Ore. (AP) — The Oregon Legislature on Wednesday approved the first pieces of a five-bill package aimed at lowering public-employee pension costs and raising new revenue for education, mental health and services for seniors.

Voting was expected to continue through the afternoon.

The House passed a measure raising taxes for some businesses and individuals and lowering them for others. The Senate backed a lower annual inflation increase in pension checks for retired government workers.

Gov. John Kitzhaber has been trying for nearly a year to build support for lowering public-employee pension costs. To make that palatable in the Legislature, the pension cuts were packaged with tax changes and a measure prohibiting cities and counties from banning genetically modified crops.

Fireworks emerged over the tax vote in the House, which initially fell short of the three-fifths supermajority needed to raise revenue. After a long delay, three Democrats changed their decisions to deliver a bare minimum of 36 votes.

Legislative leaders and Kitzhaber have agreed that the bills will live or die together, so the failure of any single measure would derail the entire five-bill package.

Under the tax measure, higher-income individuals and some businesses with more than $1 million in income would face a higher tax bill. Cigarette taxes would go up as well. But other businesses — known as pass-through entities because their profits are taxed on the owners’ individual tax return — would pay a lower rate under certain circumstances.

Some Democrats criticized the business tax breaks, which they fear will balloon into an expensive giveaway to rich people.

“This is a tax cut that is hanging an albatross around Oregon that we may not be able to get rid of,” said Rep Jules Bailey, D-Portland.

Rep. Brent Barton, D-Oregon City, said it makes no since for a doctor who owns his own clinic to pay a lower tax rate than a physician working in a hospital.

Proponents, however, said it would provide relief for small businesses and spur hiring.

“This is a difficult one, but it’s one I think we will be glad we did in the long run,” said Rep. Tobias Read, D-Beaverton.

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