Ballot Measures – General Election 2012
The following nine ballot measures appeared on Oregon’s general election 2012 statewide ballots that were mailed out beginning on Oct. 19th. Election Day was Nov. 6, 2012. The last day to register was Oct. 16th.
For County Election results visit County Clerk sites.
- State of Oregon Measure 77: State Government Response to “Catastrophic Disaster”
- State of Oregon Measure 78: Housekeeping Changes to Oregon Constitution
- State of Oregon Measure 79: Ban on Real Estate Transfer Taxes
- State of Oregon Measure 80: Marijuana Legalization
- State of Oregon Measure 81: Bans Commercial Gillnet Fishing on Lower Columbia River
- State of Oregon Measure 82: Allows Privately Owned Casinos
- State of Oregon Measure 83: Allows Casino for Wood Village
- State of Oregon Measure 84: Estate Tax Phase-out
- State of Oregon Measure 85: Corporate Kicker
Official Title: Amends Constitution: Governor may declare “catastrophic disaster” (defined); requires legislative session; authorizes suspending specified constitutional spending restrictions.
Referral: This measure is a constitutional amendment referred to voters by the 2011 Oregon Legislature with a vote of 57-3 in the House and a vote of 30-0 in the Senate.
Financial Impact Indeterminate. The measure per se does not cost or save money. It describes a process for government to function following a catastrophic disaster. Such a disaster itself would cause government to spend money to save lives, repair infrastructure, and rebuild communities. Such spending would be the result of a disaster, not of this ballot measure.
Probable Results of a YES vote: If Measure 77 passes, a process would be established outlining how state government would function following a “catastrophic disaster” declaration by the governor. It requires the legislature to convene within 30 days of such a declaration and allows the legislature to make spending decisions that might not otherwise be allowed under the Oregon Constitution in order to respond to the disaster and to aid recovery. It permits the legislature to meet in a location other than the state capitol with two-thirds of the available membership constituting a quorum.
Probable Results of a NO vote: If Measure 77 fails, the status quo remains. In the event of a catastrophic disaster, no particular process would apply to the state legislature or the governor. Disaster relief may or may not come from state government.
Background: This measure was referred to the people in order to outline in the Oregon Constitution a process, guidance and timelines—a continuation plan—for how the governor and legislature should proceed after a catastrophic disaster. Without a defined process, there is the possibility of a disorganized response and inadequate funding to respond to a disaster. The measure was prompted by an updated risk assessment for a potential 9.0 earthquake in Oregon to happen within 50 years instead of the previously assumed 200 years. The March 2011 earthquake and subsequent tsunami in Japan makes the need for an Oregon plan more pressing.
The Proposal: The measure empowers the governor to declare a “catastrophic disaster.” The definition of “catastrophic disaster” includes but is not limited to: acts of terrorism, earthquake, flood, public health emergency, tsunami, volcanic eruption, or war. The measure responds to conditions that have resulted in “extraordinary levels of death, injury, property damage or disruption of daily life.” The measure requires the legislature to meet within 30 days and changes the required number of legislators needed to make a quorum.
In case of disaster legislators want the possibility of meeting in a place other than the Oregon capitol and/or of meeting electronically, such as by speakerphone or Skype.
The measure suspends the spending limitations of the Constitution for 30 days, allowing the legislature to address state needs resulting from a disaster.
- The Oregon Constitution must be clarified to allow the governor and legislature to react to a catastrophic disaster.
- Residents and lawmakers both need to know that there is a plan in place to assure the continuation of government following a catastrophic disaster.
- The legislature must be allowed to meet in a place other than the Oregon capitol and/or by electronic communication.
- A reduced quorum requirement would allow available legislators to act.
- The measure is not needed; the Governor has the authority to call the Legislature into special session.
- This measure allows the expenditure of dedicated funds (such as lottery and highway) to be spent on other purposes without a vote of the people.
- There are other disaster relief agencies available to help such as the Red Cross, the Federal Emergency Management Administration (FEMA), and other community relief agencies.
- A reduced quorum requirement does not ensure that legislators with appropriate expertise will be available.
State of Oregon Measure 78: Housekeeping Changes to Oregon Constitution
Official Title: Amends Constitution: Changes Constitution Language Describing Government System of Separation of Powers; Makes Grammatical and Spelling Changes
Referral: This measure is a constitutional amendment referred to voters by the 2011 Oregon Legislature with a vote of 49-7 in the House and a vote of 28-0 in the Senate.
Financial Impact: The measure has no financial impact for the state.
Probable Results of a YES vote: If Measure 78 passes some words of in the Oregon Constitution would be changed to reflect current usage.
Probable Results of a NO vote: If Measure 78 fails the language in the Oregon Constitution would remain the same.
Background: The Oregon Constitution was originally adopted in 1857 and various words and phrases reflect that time period and usage. The Legislature has been updating and amending certain sections for several elections, referring the changes to voters. The Oregon Constitution currently refers to three “departments” of government: the Legislative Department, the Executive Department and the Judicial Department. Many states used departments originally, but most have now changed to the wording in the federal Constitution. Department is now used in reference to most state agencies.
Proposal: Measure 78 amends the Oregon Constitution to replace the term “department” with the term “branch” for all three branches of government. The measure changes “branch” to “chamber” when granting powers to either house of the legislature.
The measure further replaces existing Constitutional references only to the Secretary of State as “he,” “him,” and “his” with gender-neutral wording. Other gender specific language is not addressed. The measure also corrects misspellings.
- The Oregon Constitution should reflect current use of terminology.
- The use of gender-neutral language in reference to the Secretary of State is necessary.
- The proposed changes are not critical to the ongoing operation of state government.
- The use of gender-neutral language in this measure only applies to the office of the Secretary of State rather than the entire constitution.
State of Oregon Measure 79: Ban on Real Estate Transfer Taxes
Official Title: Amends Constitution: Prohibits real estate transfer taxes, fees, other assessments, except those operative on December 31, 2009.
Initiative: This measure is a constitutional amendment placed on the ballot by initiative petition.
Financial Impact: Measure 79 would have no financial impact on state or local government expenditures or revenues. No new funds would be raised if the ban became permanent and the currently existing fees are grandfathered by the proposal.
Since 1972 Washington County has assessed a real estate transfer tax which now supports the county general fund. The December 31, 2009, exception clause allows the Washington County tax to continue. The statewide real estate recording fee is also protected by the grandfather clause.
Probable Results of a YES vote: If this measure passes, state/local governments would be prohibited from imposing taxes, fees, or assessments on the sale or transfer of any interest in real property, except those operative December 31, 2009.
Probable Results of a NO vote: If this measure fails, the current law remains unchanged, prohibiting local governments from imposing real estate transfer taxes/fees (with exceptions), allowing the state legislature to impose such taxes or fees with a 3/5th majority vote.
Background: A real estate transfer tax is a tax that may be imposed by states, counties, or municipalities on the transfer of real property within the jurisdiction. Total transfer taxes in other states range from very small (for example, .01% in Colorado) to relatively large (4% in the city of Pittsburgh). Some U.S. states have a variety of transfer tax laws which may include specific exemptions for certain types of buyers based on buying status or income level.
In 1997, Oregon housing advocates pursued a statewide real estate transfer fee with the proceeds dedicated to affordable housing and infrastructure development. Their effort failed and two years later, with backing from real estate professionals, the legislature adopted the existing statutory ban.
Recording fees have been used for a number of years to help cover county administrative costs. In October 2009, the recording fee for the first page of applicable documents was increased from $11 to $26 under a proposal sponsored by the Oregon Housing Alliance and backed by the Oregon Association of Realtors. The additional $15 increase is dedicated to affordable housing and currently raises about $10 million per year allocated statewide by Oregon Housing and Community Services.
Current statutory law prohibits a city, county, district, or other political subdivision or municipal corporation from imposing taxes or fees on the transfer of real estate (with certain exceptions). However, the state legislature has the authority with a 3/5-majority vote, subject to the governor’s approval, to impose such taxes and fees or to change current statutory law. (The 3/5 majority is required for any legislation that would raise revenue.) The legislature currently has the authority to remove the prohibition on local governments with a simple majority vote. Measure 79 would eliminate that authority.
Real estate transfer taxes are not equivalent to system development charges, which are defined as one-time charges to new development, usually assessed at the time a building permit is issued, designed to recover the costs of infrastructure capacity needed to serve that development.
The Proposal: Measure 79 would amend the Oregon Constitution to prohibit the state and any city, county, district, or other political subdivision or municipal corporation from imposing taxes, fees, or other assessments on the sale or transfer of real property. The measure exempts from the prohibition any taxes, fees, or other assessments in effect and operative on December 31, 2009.
The real estate professionals in Oregon proposed this ban on real estate transfer taxes to prevent the state legislature (or other governments) from establishing such a tax. They proposed a constitutional amendment to provide long-term, if not permanent, prohibition of such taxes.
- Oregonians already pay property taxes to fund schools and local government. A new tax on the same property at the point of sale or transfer is a second tax on real estate.
- Many families forced to sell at a loss due to a short sale would also be targeted with an additional tax.
- Transfer taxes impose an additional barrier to home ownership in a time when financing is already difficult to obtain.
- The taxes are regressive; they pose a higher burden on lower income households.
- A permanent ban is not an appropriate component for the Oregon Constitution; the statutory prohibition is already effective.
- Real estate transfer taxes are a valid and useful source of funds for needed services such as affordable housing.
- In a representative democracy the legislature or local elected officials are empowered to act on the behalf of the community and their flexibility should not be limited by unnecessary constitutional amendments.
- A real estate transfer tax can be designed so that it does not impose a burden on low-income homeowners.
State of Oregon Measure 80: Marijuana Legalization
Official Title: Allows personal marijuana, hemp cultivation/use without license; commission to regulate commercial marijuana cultivation/sale.
Initiative: This measure is a statutory amendment placed on the ballot by initiative petition.
Financial Impact: The cost of operating the newly created Oregon Cannabis Commission may be similar to the cost of operating the existing Oregon Liquor Control Commission (approximately $22 million per year). Total additional revenues to state government are indeterminate, but revenues from the taxation and sale of marijuana are likely to be sufficient to offset the expenditures of the Commission.
State expenditures would be reduced by $1.4 million to $2.4 million a year, which is the amount the state now pays for felony marijuana offenders with related convictions in prison and on probation. The Oregon Department of Justice is not able to determine the number and difficulty of federal challenges to the Oregon law, making this potential financial impact unpredictable. The Department estimates expenditures of between $1.6 million and $3.3 million per year to ensure court case files do not disclose names or addresses of applicants, licensees, and purchasers of cannabis, except upon the person’s request, prior to allowing them to be viewed by parties to a case, the public, or the media. The amount of the impact for local law enforcement, district attorneys, and the courts is indeterminate.
Probable Results of a YES vote: If this measure passes, it would replace all existing state and local laws relating to marijuana, except for medical marijuana and driving under the influence of intoxicants. Personal use and cultivation of marijuana would be permitted. Marijuana would be regulated, sold in state-licensed stores, and taxed in a manner very similar to liquor. Federal law prohibiting the cultivation, use, and sale of marijuana would remain, however, and would likely result in conflict over the law.
Probable Results of a NO vote: If this measure fails, existing laws would remain which prohibit the cultivation, possession, and sale of marijuana except as allowed under the Oregon Medical Marijuana Act.
Background: Until 1935 cannabis, or marijuana, was legal in Oregon and in many other states. The Uniform State Narcotic Drug Act criminalized the possession of any amount of marijuana. In 1973 Oregon decriminalized small amounts of marijuana, making possession of under one ounce a misdemeanor punishable by a fine of $500-$1000. In 1986 voters defeated a measure similar to this measure, which would have also made marijuana cultivation and use legal. In 1998 Oregon voters passed a measure to allow the use of marijuana for medicinal purposes. A program was established under the law to certify eligibility and regulate use and possession. However, a ballot measure in 2010 was defeated that would have established medical marijuana dispensaries.
Hemp consists of various strains of Cannabis sativa that contain less than 0.3 percent THC (tetrohydrocannabinol), the psychoactive compound in marijuana. In 2009 the Oregon Legislature passed a law to allow and establish a state program to oversee and encourage the growing of industrial hemp should federal law change to permit cultivation.
The Proposal: Measure 80 would amend state law to allow and regulate the growth, sale, possession and use of marijuana in Oregon. An Oregon Cannabis Commission would be set up to license qualified marijuana growers; license processors and packagers; license stores to sell marijuana; set standards; establish the retail price for marijuana; and collect fees. To be qualified to purchase, cultivate, or process marijuana, a person must be over 21 years and not have been convicted of selling marijuana to minors. Measure 80 would allow the industrial production of hemp without state restriction.
Revenues collected through the licensing and sale of marijuana would be used to reimburse the following: the Commission for expenses; the Attorney General’s office for the costs of enforcing and defending the measure; and licensed retailers by paying them 15% of gross sales. Money remaining from the sale of marijuana would be distributed as follows:
- 90% to the state General Fund to finance state programs
- 7% to fund drug treatment programs
- 1% to create and fund a committee to promote Oregon-grown hemp fiber
- 1% to create and fund a committee to develop and promote biodiesel from hemp seeds
- 1% to state school districts for drug education programs
Measure 80 would require the Oregon Attorney General to defend the law in federal courts and to defend Oregon citizens from federal prosecution.
- Like liquor, cannabis would only sold to adults 21 years and older. This measure also keeps in place all existing DUII laws, so people who choose to drive under the influence would face the same stiff penalties they do now.
- This measure will regulate the growth and sale of cannabis, which would diminish the black market.
- This measure will generate revenue for the state while reducing the amount spent on law enforcement and prisons.
- Measure 80 would allow the industrial production of hemp without state restriction.
- This measure could lead to job creation in cannabis industries.
- While youth won’t be able to legally purchase marijuana, increased availability will mean that, as with alcohol, they may have access, which may lead to drug abuse.
- Passing this measure could create a legal nightmare for Oregon since federal law still prohibits marijuana, and it would use state resources to defend the law and citizens.
- Any increase in state revenues is not worth the impact on youth and communities from legalizing and increasing access to a mind-altering substance.
- Should this measure pass, drug cartels could monopolize the market, decreasing public safety and increasing law enforcement costs.
- Measure 80 could undermine public health and safety in Oregon.
State of Oregon Measure 81: Bans Commercial Gillnet Fishing on Lower Columbia River
Official Title: Prohibits commercial non-tribal fishing with gillnets in Oregon “inland waters,” allows use of seine nets.
Initiative: This measure is a statutory amendment placed on the ballot by initiative petition.
Financial Impact: The measure will increase state government expenditures by $150,000 per year for staff and supplies to perform ongoing required research and monitoring and will decrease state government revenues by approximately $550,000 to $750,000 per year from state income taxes, permits, licenses, and surcharges received from the current non-tribal gillnet and tangle net fisheries, boats and licensees.
Probable Results of a YES vote: If this measure passes, it would prohibit commercial salmon fishing with gillnets by non-tribal Oregon fishers, except in specifically designated off-channel areas located in the lower Columbia River. It also establishes the legal use of seine net fishing and fixed fishing gear on the Columbia River.
Probable Results of a NO vote: If this measure fails, laws will be retained allowing commercial fishing under a limited number of permits by Oregon and Washington non-tribal fishers in the Columbia River mainstream up to Bonneville Dam.
Background: Adult salmon spawn in freshwater, the juveniles migrate to saltwater where they mature. As adults these fish then return to fresh water to spawn. Many salmon do not survive this return. While returning Columbia River salmon once numbered in the millions, fewer than 100,000 wild spring Chinook now return. The federal government has listed 13 “runs” of Columbia River salmon and steelhead as threatened or endangered species.
At present about 200 commercial gillnet fishers work on the Oregon side of the lower Columbia (a 140-mile stretch of the river between Bonneville Dam and the mouth of the river) catching salmon and other fish using nylon plastic mesh gillnets which stretch like curtains from surface buoys, weighted at the bottom. Other fishers, primarily sport fishers, are licensed to use hook and lines to capture and release wild salmon, while tribal fishers are allowed, by treaty rights, to harvest wild salmon.
Concerned that Ballot Measure 81 would change the rules too quickly, Oregon Governor John Kitzhaber has directed the Oregon Fish and Wildlife Commission and Oregon Department of Fish and Wildlife to work with Washington State to come to an agreement by the end of 2012. The Governor’s proposal would end commercial gillnet fishing in three years in the main stem of the Columbia River and move commercial fishing to off-channel areas where ”alternative gear approaches” may be used to catch an increased number of hatchery-bred salmon. Under the Governor’s directive, emphasis would be shifted to sport fishing in the main channel of the Columbia River.
Tribal fisheries would not be affected by either the Governor’s directive or by passage of Ballot Measure 81.
The Proposal: Measure 81 would make it unlawful for an individual to use a gillnet or tangle net to take salmon, steelhead or other fish in the inland waters of the state of Oregon including the Columbia River. Seine nets or fixed fishing gear would, instead, be allowed for commercial fishing for the Columbia River because both seem to have a lower mortality rate for non-target fish.
Commercial gillnet fishers from Washington state could continue to use gillnets on the Washington side of the Columbia.
- Gillnets are indiscriminate, capturing and killing not only endangered runs of salmon and steelhead, but also other wildlife.
- Passage of this measure would prohibit the use of gillnets for commercial fishing on the Columbia River while encouraging fishers to adopt more selective, sustainable techniques.
- The measure’s more selective fishing techniques could help preserve the wild salmon and steelhead runs.
- Management of fishery by initiative petition is a bad idea, ignoring the complexities of fisheries management.
- Sport fishers could receive a larger allocation of fish while some commercial fishers could lose their livelihood.
- Proposed new rules offer a compromise that will protect wild salmon and allow commercial fishing with gillnets in side-channels of the lower Columbia River.
State of Oregon Measure 82: Allows Privately Owned Casinos
Official Title: Amends the Constitution: Authorizes establishment of privately owned casinos; mandates percentage of revenues payable to dedicated state fund.
Initiative: This measure is a constitutional amendment placed on the ballot by initiative petition.
Financial Impact: This measure has an indeterminate financial impact. Currently the Oregon Constitution prohibits casinos in the state, and this measure amends the constitution to authorize voters to allow casinos. If this measure is adopted and voters approve Measure 83 to permit a privately owned casino, there may be a financial impact on the state lottery fund because of competition from privately owned casinos. Tribal governments and certain local government entities that receive revenue derived from tribal gaming operations may also lose revenue because tribal gaming revenues may decline.
Probable Results of a YES vote: If Measure 82 passes, it would amend the Oregon Constitution to authorize voters of the state and host city to approve privately owned casinos. It would require such casinos to give 25 percent of monthly adjusted gross revenues to the State Lottery for specified purposes.
Probable Results of a NO vote: If Measure 82 fails, current law would be maintained which does not authorize any privately owned casinos within the state. Tribal casinos are authorized by gaming compacts among state, federal, and tribal governments.
Background: The Oregon Constitution currently prohibits the authorization and operation of privately owned, non-tribal casinos within the state. In 1984 Oregon voters approved a constitutional amendment for the establishment and operation of an Oregon State Lottery. By law, 84% of total annual lottery revenues must be returned to the public: 50% as prizes, the remainder for public purposes. These funds go to education, state parks, watershed conservation and salmon habitat. In addition to these statewide allocations, every county receives a portion of the net receipts for local economic development projects.
Presently there are nine tribal casinos located throughout the state and operated by individual tribal councils. By law, revenues generated by the tribal casinos must finance tribal government operations: education, health services, economic development and charitable contributions. The tribes contribute 6% of their net income to charitable purposes in their communities and the state.
The Proposal: Under this measure the Constitution would be amended to authorize privately owned casinos provided each is approved by voters both in a statewide initiative and a local vote. Private casinos must be Oregon corporations and located in a city; they may not be within 60 miles of a tribal casino. The proposal establishes the regulatory framework for the operation of private casinos.
A privately owned casino must pay the state 25% of its adjusted gross revenues to a state fund for various public purposes. [See Measure 83, which proposes the first private casino and establishes the purposes for this fund.]
- Casinos create needed jobs and provide economic development. Oregon voters should allow non-tribal casinos so that the state can benefit economically.
- Privately owned casinos will give 25% of their adjusted gross revenues to important public needs such as education, local governments, and law enforcement.
- To minimize competition with tribal casinos, privately owned casinos would only be allowed in cities and no closer than 60 miles from an existing tribal casino.
- Measure 82 will change Oregon’s Constitution and open the door for unlimited casinos to be built across Oregon.
- Oregon law enforcement is already overburdened and understaffed. If a casino is built under Measure 82, police may have to deal with more crime, alcohol and drug abuse.
- Measure 82 could harm Oregon’s Indian tribes’ efforts to strengthen their communities, provide jobs in rural areas, and support charities and non-profits across the state.
State of Oregon Measure 83: Allows Casino for Wood Village
Official Title: Authorizes privately owned Wood Village casino; mandates percentage of revenues payable to dedicated state fund.
Initiative: This measure is a statute placed on the ballot by initiative petition.
Financial Impact: The measure’s financial impact on state and local government cannot be accurately predicted. If a casino is constructed, it is estimated that the Oregon State Lottery could receive between $32 million and $54 million in net additional revenues per year for public purposes. The estimate depends on some assumptions, including a $300 million investment in the casino property, as well as 2,200 slot machines and 100 table games.
The proposed casino could have indirect impacts on state and local government revenues and expenditures, many of which cannot be accurately predicted. New jobs at the casino could generate income tax revenue, but tax revenue could be lost as a result of the losses at video lottery retailers in the area and the loss of jobs in entertainment and other businesses affected by the shift in consumer spending decisions. Property tax revenues in the area could increase. Cost increases for public safety and infrastructure could be offset by casino revenues.
If the casino is built, Oregon lottery revenues are projected to decline between $61 million and $78 million per year because some of the money spent playing lottery machines may be spent gaming at the new casino instead. Because 65 percent of these video lottery revenues are transferred to state and local government, state and local government revenues are projected to decline between $40 million and $51 million when the casino is fully operational. This decline could be offset by up to $83 million to $94 million in new lottery revenues from the casino, producing the net gain of between $32 million and $54 million.
Probable Results of a YES vote: If Measure 83 passes, it would authorize a single privately owned casino in Wood Village and would require it to give 25% of its monthly adjusted gross revenue to the state lottery for specified purposes.
Probable Results of a NO vote: If the measure fails, current law is maintained and no privately owned casino would be built in Wood Village.
Background: Currently, the Oregon Constitution prohibits legislative approval of non-tribal casinos in Oregon. Measure 82 seeks to give voters the authority to approve privately owned casinos under certain circumstances. In 2010 a similar ballot measure to build a casino in Multnomah County was defeated.
The site of the proposed casino is the former Multnomah Greyhound Park located in the eastern suburbs of Portland in Wood Village. Greyhound races were held every summer at the track, which offered pari-mutuel betting. It closed in 2004.
Proposal: Measure 83 is dependent upon passage of Measure 82, repealing the constitutional prohibition of non-tribal casinos and allowing voters to approve privately owned casinos.
Measure 83 would allow a privately owned casino to be built and operated in Wood Village provided that voters in that city approve the facility in a separate vote. The casino would be licensed and regulated by the Oregon Lottery Commission. The measure requires a minimum investment of $250 million in the casino property. The measure limits the number of slot machines and table games at 3,500 and 150 respectively.
The measure requires the casino to pay 25% of its adjusted gross gaming revenues, after prizes, to the State for specified state and local government purposes. Of this revenue 80% would go to the Oregon Lottery Fund for distribution under the current Lottery formula; 58% to education, 4% to local government, and the remainder to other public purposes. The remaining 20% of casino revenue would go to the Oregon Job Growth, Education and Communities Fund. Monies in that fund would be distributed 75% to local governments, 15% to tribal governments, and 5% each to the Oregon State Police and to the Problem Gambling Treatment Fund.
- The Wood Village casino could create 3,000 temporary construction and 2000 permanent jobs with benefits and could have a positive economic impact in the area.
- Measure 83 provides for the casino to give money back to the Oregon Lottery and to benefit the state and local governments as well.
- The casino would be the first taxpaying casino in the state paying gaming, income, property, hospitality, and TriMet taxes, which could generate much needed revenue for schools and the state and local governments.
- The Wood Village casino could provide the area with a new entertainment option, attract tourism and bring out-of-state dollars into Oregon.
- A casino in Wood Village could negatively impact jobs and small businesses that currently offer Video Lottery games.
- Oregon Lottery profits benefit Oregon; profits from a privately owned casino in Wood Village could primarily benefit the private investors.
- Most of the Oregon Lottery’s revenues are generated in the Portland area; the casino would reduce these revenues, which are important to funding programs across the state.
- Tribal casinos are a major source of jobs and revenue for tribes; a privately owned casino in the Portland area could reduce revenue at tribal casinos near Portland.
Official Title: Phases out existing inheritance taxes on large estates, and all taxes on intra-family property transfers.
Initiative: This measure is a statutory amendment placed on the ballot by initiative petition.
Financial Impact: This measure phases out existing estate taxes over three years, which will reduce state revenue by approximately the following amounts:
- $17 million in fiscal year 2013-14
- $43 million in 2014-15
- $72 million in 2015-16
Thereafter the measure will reduce state revenue by approximately $120 million per year, depending upon growth in estate values.
Measure 84 also prohibits all taxes on transfers of property between family members and phases out existing taxes on those transfers. The current amount of those transfers and the changes that might occur given elimination of taxes on those transfers are unknown; therefore, according to the official estimate of financial impact, the effect on state budget revenues is indeterminate.
Probable results of a YES vote: If Measure 84 passes, existing inheritance/estate taxes will be phased out; taxes on death-related property transfers and all taxes on property transfers between living family members will end. This will reduce state revenue.
Probable results of a NO vote: If Measure 84 fails, the existing estate/inheritance taxes on estates valued at $1 million or more and taxes on the transfer of income-producing property between family members in certain circumstances will remain in effect.
Background: Estate taxes are paid by a deceased person’s estate when their property is transferred at death. Beneficiaries who receive the property pay inheritance taxes. Opponents of estate and inheritance taxes refer to them as death taxes.
Current Oregon law taxes estates valued at $1 million or more. The law also allows an exemption of up to $7.5 million against estate taxes for transfer by a deceased person of farm, forestry or fishing property used for business to a family member. The law allows a spouse, in most circumstances, to leave property to a surviving spouse without paying estate tax.
Current Oregon law taxes capital gains on the sale of property from one living family member to another. The kinds of assets on which capital gains taxes are imposed include businesses, stocks, land, and real estate.
Proposal: The first part of Measure 84 would phase out and then eliminate Oregon estate and inheritance taxes by 2016. The reductions would be as follows:
- 2013 — a 25% reduction
- 2014 — a 50% reduction
- 2015 — a 75% reduction
- 2016 — the estate tax is eliminated
The second part of Measure 84 would phase out and then eliminate taxes on property sold to another family member. It would prohibit any new tax, such as a gift tax, on the transfer of real, personal, or intangible property (such as a bank account) between living family members.
There is no consensus among Legislative Counsel and the Department of Revenue as to how this proposal for eliminating capital gains on sales of property within families would affect state tax revenue. All parties acknowledge that because of differing interpretations of the proposal’s meaning and impacts, if Measure 84 passes, either the legislature would need to review this portion of the proposal or a court would need to make a determination regarding its meaning.
- The estate tax is unfair because it is a double tax; people pay income taxes during their lives and then have to pay taxes on the value of their estates at death.
- These taxes are detrimental to farms and other small family-owned businesses because the taxes sometimes force people to sell property in order to pay the taxes.
- Doing away with taxes on estates and on transfers of property between family members will sustain family businesses and could create jobs.
State of Oregon Measure 85: Corporate Kicker
Official Title: Amends Constitution: Allocates Corporate Income/Excise Tax “Kicker” Refund to Additionally Fund K Through 12 Public Education.
Initiative: This measure is a constitutional amendment placed on the ballot by initiative petition.
Financial Impact: The measure’s financial impact is indeterminate because it is affected by unknown future events. If corporate tax receipts exceed the state forecast by two percent or more for a two-year budget period beginning July 2013, the amount will be retained in the state General Fund and not be “kicked” back to corporations. In the last ten budget periods, the corporate “kicker” was triggered five times. The legislature suspended it two of those times; refunds of $101 million to $203 million were made the other three times.
Probable results of a YES vote: If this measure passes, it would allocate the corporate income and excise tax “kicker” refund to the General Fund dedicated to K-12 public education. Corporations would no longer receive refunds.
Probable Results of a NO vote: If this measure fails, the corporate income and excise tax “kicker” would continue to be refunded to corporate taxpayers whenever corporate tax receipts exceeded the state forecast by two percent or more.
Background: The Oregon Constitution has a provision commonly known as the “corporate kicker” that “kicks” back unexpected corporate income and excise taxes to corporate taxpayers. The “kicker” is triggered if corporate income and excise taxes exceed the estimate made at the end of a legislative session by two percent or more. The corporate “kicker” has been triggered in half of the 18 two-year budget cycles since it was adopted in 1979. The constitution allows the legislature to suspend the “kicker” with a two-thirds vote and retain the unexpected revenue for discretionary purposes. The legislature has suspended the corporate “kicker” twice. Large businesses that sell goods and services in Oregon pay Oregon corporate taxes. Most small businesses pass on their earnings to the owners who pay taxes through the personal income tax.
K-12 school funding per student, when adjusted for inflation, has been declining since voters approved a tax limitation measure in 1990 that made the income tax the primary source of school funding. Because of the economic downturn, funding per student was reduced by about 7.5% in 2010-11 and has not yet returned to previous levels.
The Proposal: This measure would redirect future corporate “kicker” refunds to the General Fund dedicated to K-12 public education. The General Fund, where most individual and corporate income taxes are deposited, pays for schools, public safety, social services, and other state services. The legislature decides how much of the General Fund to allocate to each governmental service, including to K-12 education.
If Measure 85 passes, corporations would no longer receive “kicker” refunds. No changes would be made to the personal “kicker,” a similar program that refunds unexpected tax receipts to individual income taxpayers.
- The corporate “kicker” money should be used to help fund Oregon public schools and not be given back to large businesses.
- Oregon’s public schools have cut teachers and other school staff by nearly 16%, increased class size by nearly 20%, and eliminated programs because of budget cuts.
- Measure 85 would begin the process of reinvesting in our K-12 classrooms.
- Measure 85 does not guarantee that schools will receive additional money; the legislature could redirect other General Fund resources from K-12 education to other essential services.
- It would be better to put the “kicker” funds into a rainy-day fund to use in years of low revenue.
- Corporate “kicker” dollars are too limited and too irregular to fix school funding problems.
How We Researched the Measures
League of Women Voters members researched and wrote the reports on the ballot measures. They interviewed and/or requested feedback from supporters and opponents of each measure; obtained information from state agencies and economists; and reviewed reports and published information. League researchers try to verify all factual information in our explanations. Financial impacts of measures are taken in whole or in part from the Financial Impacts and Explanatory Statements provided by the Secretary of State. We work diligently to ensure that our reports on the measures are balanced, accurate and fair. We hope that this will give you the information you need to make an informed vote.