PUBLIC HEARING ON HB 3495, HB 2819, HB 3085, HB 2804, HB 2806, HB 3118

 

TAPE 114 AB, 116,117 A

 

HOUSE REVENUE COMMITTEE

APRIL 9, 2003   8:30 AM   STATE CAPITOL BUILDING

 

Members Present:                        Representative Lane Shetterly, Chair

                                                Representative Wayne Scott, Vice Chair

                                                Representative Joanne Verger, Vice Chair

                                                Representative Phil Barnhart

                                                Representative Vicki Berger

                                                Representative Mark Hass

                                                Representative Elaine Hopson

                                                Representative Max Williams

 

Members Excused:                      Representative Pat Farr

 

Witness Present:                        Representative Tom Butler, House District 60

                                                Representative Max Williams, House District 35

                                                Senator Bill Morrisette, Senate District 6

                                                Bob Wright, Eastern Oregon Alcoholism Foundation

                                                Kevin Campbell, Eastern Oregon Human Services Consortium

                                                Jean Cowan, Lincoln County Commissioner and

                                                            Association of Oregon Counties (AOC)

                                                Madeline Olson, Office of Mental Health and Addiction Services,

                                                            Department of Human Services

                                                Pamela Erickson, Coalition to Reduce Underage Drinking

                                                Kathy Stromvig, Oregon Coalition to Reduce Underage Drinking,

                                                            Mother’s Against Drunk Driving

                                                Richard Drandoff, Changepoint, Inc.

                                                Mark Nelson, Anheuser-Busch Company

                                                John Powell, Miller Brewing Company

                                                Richard Kosesan, Coors Brewing Company

                                                Mary Ann Schwab, Sunnyside Neighborhood Association, Portland Oregon

                                                            To Governor’s Oregon Liquor Control Round Table

                                                Representative Jerry Krummel, District 26

                                                Dick Anderson, Fannie May and Oregon Mortgage Lenders Association

                                                Kevin Montgomery-Smith, Portland Business Alliance

                                                Bob Repine, Oregon Housing and Community Services

                                                Representative Kelly Wirth, District 16

 

Staff Present:                            Paul Warner, Legislative Revenue Officer

                                                Richard Yates, Legislative Revenue Office

                                                Lizbeth Martin-Mahar, Legislative Revenue Office

                                                , Legislative Revenue Office

                                                Kathy Tooley, Committee Assistant

 

TAPE 114, SIDE A

008

Chair Shetterly

Calls meeting to order at 8:40 a.m.

 

PUBLIC HEARING ON HB 2804

 

020

Richard Yates

Provided description of HB 2804, (Exhibit 1), discussed revenue impact, (Exhibit 2), and distribution by county, (Exhibit 3).

 

182

Rep. Tom Butler

Spoke in support of HB 2804. Concerned about the cost of alcohol consumption, particularly beer, amongst Oregon youth, and costs to society.  Believes public better informed about Sudden Acute Respiratory Syndrome (SARS) than underage drinking problem; beer is the drink of choice among offending minors; higher priced alcohol has an affect on how, where and whether children choose to consume beer.  Bill would allow utilization of resources to address the true costs in the illegal consumption of alcohol.

 

225

Rep. Max Williams

Spoke in support of HB 2804.  Need to increase tax rate as it has a nexus relationship with the criminal justice system.  A high percentage of police calls are alcohol related and represents a primary expense in city budgets.  Feels amount in the bill is too high.

 

320

Sen. Bill Morrisette

Spoke in support of HB 2804, (Exhibit 4).  Justification for a beer tax is higher than wine.  Need for local administration of drug/alcohol programs.  Discussed ability to front load budget; broadcast beer advertising geared to youth, prevention activities, 60/40 matching funds for mental health drug/alcohol treatment.

 

384

Chair Shetterly

Recess Public Hearing on HB 2804

 

OPENED PUBLIC HEARING ON HB 3085

 

390

Chair Shetterly

Recessed hearing on HB 3085

 

REOPENED PUBLIC HEARING ON HB 2804

 

410

 

 

 

 

 

438

Bob Wright

 

 

 

 

 

Wright

Spoke in support of HB 2804, (Exhibit 5), served 33 years in corrections, during that time 70-80% of people were locked up because drugs or alcohol issues contributed to their incarceration.  Treatment works and beer tax would allow people to get treatment and avoid serving time and the consequences of addiction.

 

Discussed affects of program fund reductions, waiting list for those wanting treatment.

 

461

Kevin Campbell

Spoke in support of HB 2804, (Exhibit 6), need for additional funding with federal matching funds. This measure can begin a change. Without base and distribution of 10% equally among counties, counties would not receive an adequate amount of money to run thorough programs.

 

542

Jean Cowan

Provided written testimony from Gordon Fultz, (Exhibit 7), discussed issues from county level.  Discussed state cuts; Lincoln County is losing ability to provide services and prevention programs.

 

 

TAPE 114, SIDE B

 

 

 

005

 

 

Jean Cowan

(NOTE:  Brief gap in taping, continued testimony at Side B, Meter 005).

 

Cited need for follow-up programs for offenders to be successful. Discussed parole, probation; drug prevention, early intervention and treatment programs that have been reduced or eliminated at the county level.  AOC supports the distribution formula

 

035

Madeline Olson

Described the focus of HB 2804, the use of revenue from this bill and the effect increased funding could have on services to Oregonians, (Exhibit 8).

 

080

Pamela Erickson

Spoke in support of HB 2804, (Exhibit 9) as it affects underage drinking and the need for beer to be taxed to reflect its fair share.

 

093

Kathy Stromvig

Testified in support of HB 2804, relayed personal experience having spent her life dealing with negative affects of alcohol use.  Encouraged Committee to spend a lmore on prevention.

 

124

Richard Drandorf

Spoke in support of HB 2804, as it relates to substance abuse.  Cited tax on beer has not been raised since 1973.

 

208

Mark Nelson

Spoke in opposition to HB 2804.  Concerned out of $100 million raised from beer, wine, alcohol taxes; only $12-13 million go to support drug/alcohol programs. Balance of existing taxes have gone to fund other programs, termed drug/alcohol programs not a priority for state and local governments. HB 2804 asks minority of Oregonians to pay for a program that all Oregonians should pay for.

 

263

John Powell

Spoke in opposition to HB 2804; microbrew has grown more in last 10 years and is most expensive beer, raising the price would not take care of alcohol abuse; the largest component in the price of beer is taxation; many states near or below Oregon Tax Rate; taxation is on minority.

 

334

Richard Kosesan

Spoke in opposition to HB 2804.  Reiterated Nelson and Powell’s testimony.  Discussed lack of clarity of intent of partial interim task force which supported a beer tax increase.

 

375

Mary Ann Schwab

Spoke in support of HB 2804 (Exhibit 10).  Disagreed with Kosesan on Interim Task Force vote, said members left meeting because they chose not to vote.  Cited lack of tax increase in 26 years; need to support prevention; beer industry needs to pay its fair share for consumer costs.

 

436

Chair Shetterly

Closed Public Hearing HB 2804.

 

OPENED PUBLIC HEARING ON HB 3085

 

442

Lizbeth Martin-Mahar

Provided background and description of HB 3085, (Exhibit 11).

 

 

TAPE 116, SIDE A

 

026

Representative Jerry

Krummel

Spoke in favor of HB 3085, provided background, description; purpose to spur home-ownership.

 

060

Dick Anderson

Spoke in support of HB 3085, (Exhibit 12).  May not move through the process because it would not generate revenue, but asked Committee to think of the economic benefits of home ownership.  May be non-traditional way of returning money to Oregon budget. Cited national statistics showing Oregon lagging in home ownership. Cited biggest barriers to home ownership are down payment and closing costs.  If employer does not establish a program utilized by employees, then no tax is taken.

 

149

Kevin Montgomery

Smith

Spoke in support of HB 3085.  Reiterated Anderson’s testimony.  Currently a company has to “Gross Up” an employee’s salary since the program is a taxable benefit.  Tax credit program with desired corporate action, small administrative costs, self-regulated by job market.

 

211

Bob Repine

Spoke in support of HB 3085.  Companies have used as part of the targeting process. Discussed how HB 3085 fits in with other tax credits available through OHCS; but program does not fit within budget.

 

365

Rep. Hass

One way to afford this program is to limit subtractions and deductions for subsidies on second homes until Oregon has helped people purchase their first homes.

 

377

Chair Shetterly

For the record, written testimony from the Oregon Revenue Coalition on HB 3085, (Exhibit 13).

 

381

Chair Shetterly

Closed public hearing on HB 3085.

 

 

OPENED PUBLIC HEARING ON HB 2819

 

388

Chair Shetterly

Closed Public Hearing on HB 2819, (Exhibit 14), -1 Amendment (Exhibit 15).

.

 

OPENED PUBLIC HEARING ON HB 3495

 

392

Martin-Mahar

Provided description of HB 3495, and sales tax revenue generated from different retail sales tax rates, (Exhibit 16).

 

 

TAPE 117, SIDE A

 

038

 

 

 

055

 

064

 

 

070

 

 

095

 

 

 

 

 

148

 

Rep. Kelly Wirth

 

 

 

Rep. Wirth

 

Rep. Wirth

 

 

Rep. Wirth

 

 

Rep. Wirth

 

 

 

 

 

Rep Wirth

Spoke in support of HB 3495.  Two points about sales tax perspective:  Measure 5 failed five times prior to adoption; past sales tax proposals did not differ in who would benefit.

 

Discussed similarities and dissimilarities to past sales tax bills.

 

Favor the lowest most broadbased sales tax that may be applied and result in net revenue. Intent to generate more revenue than state has. 

 

Bill is an enactment, rather than referral to the voters. Referendum has turned into an excuse to preclude legislative decision-making. 

 

Discussed unique components of this proposal based on research on voter sales tax support by state of Washington. Sales tax measures that are perceived to fund human services are defeated by voters in Oregon and Washington.  Voters will support tax measures that fund public safety and transportation freeing general funds to fund human services and education.

 

To fund, would couple with dropping income taxes on two lowest brackets by 1%.

 

168

Rep. Verger

Why prohibit local government from raising a tax, if voters approved it?

 

171

Rep. Wirth

Used boilerplate, want to hear things that would hang up the bill.  The tradeoff was to give a penny to the county in which the sale was made.

 

187

Rep. Verger

Transportation has nexus to gas tax or title and registration fees, people may not look at tax that double’s license, title fees.

 

194

Rep. Wirth

Would couple the sales tax with a fee reduction in services currently paying for in transportation costs.

 

205

Chair Shetterly

Close public hearing HB 3495.

 

 

OPEN PUBLIC HEARING HB 2806

 

225

Martin-Mahar

Provided background and description of HB 2806.

 

248

Rep. Tom Butler

Figures calculated relative to a loss is only a maximum of $3000, or have you calculated entire loss?

 

264

Martin-Mahar

Net capital gain.

 

267

Rep. Butler

Maximum net loss reported on any income tax return is $3000. This bill attempts to remove vagaries of capital market from income tax system. If Oregon taxed only income instead of capital gains and losses, this bill would commence the development of a true income tax system as opposed to capital gains and income tax system.

 

312

Chair Shetterly

Are there issues with the revenue impact?

 

315

Rep. Butler

No, it demonstrates what would happen with the capital loss reduction.

 

323

Rep. Barnhart

Net capital losses carry forward and will be deductible on next year’s federal tax return, if this bill passed it would not be deductible from Oregon’s return.

 

312

Rep. Butler

Answered affirmatively.

 

343

Chair Shetterly

For the record, noted ORC written testimony, (Exhibit 8).

 

 

Chair Shetterly

Closed Public Hearing on HB 2806.

 

 

OPENED PUBLIC HEARING ON HB 3118

 

350

Butler

Described and spoke in favor of HB 3118.  Starts process of what is already done in many states in tracking how much income is collected by school district.  There is a small fiscal.  Provides an additional tool relative to each school district.  Concern regarding metropolitan vs. urban areas.  This would start to provide a tool as to where to provide long term funding.

 

437

Chair Shetterly

What do we do with the information?

 

440

Rep. Butler

Doesn’t do anything right now, but identifies school districts for which the total amount of general fund revenues are generated.

 

453

Chair Shetterly

This is essentially census information.

 

453

Rep. Butler

It is information that is nice to know but not necessary.  The decisions that relative to school funding and income, can be off by 30-40%.

 

480

Paul Warner

Discussed flaws in current data.

 

490

Rep. Butler

Info will not be definitive but provide a launch point on how to fund education.

 

491

Chair Shetterly

For some parts of the state is this a question they would be afraid to answer.

 

492

Rep. Butler

Would guess within timber and resource base communities, some people may not want to share.  Even bad news is important to understand.

 

510

Chair Shetterly

Close HB 3118

 

 

 

 

513

Chair Shetterly

Meeting adjourned at 10:33 a.m.

 

 

 

 

 

Tape Log Submitted by,

 

 

 

Kathy Tooley, Committee Assistant Reviewed by Kim Taylor James

 

Exhibit Summary:

1.       Yates, “Staff Measure Summary HB 2804”, 1 page

2.       Yates, “Revenue Impact HB 2804”, 1 page

3.       Yates, “HB 2804 County Health Fund Distribution”, 1 page

4.       Sen. Morrisette, “Testimony HB 2804”, 2 pages

5.       Wright, “Testimony HB 2804”, 1 page

6.       Campbell, “Impact of funding, as Proposed in HB 2804 on Eastern Oregon Human Services Consortium Counties”, 1 page

7.       Cowan, “Gordon T. Fultz Testimony HB 2804”, 23 pages

8.       Olson, “Testimony HB 2804”, 2 pages

9.       Erickson, “Why Tax Alcohol”, 7 pages

10.   Schwab, “Testimony HB 2804”, 4 pages

11.   Martin-Mahar, “Testimony HB 3085”, 1 page

12.   Anderson, “Fannie Mae Employer-Assisted Housing”, 12 pages

13.   ORC “Written Testimony HB 3085”, 3 pages

14.   Meyer “Staff Measure Summary HB 2819”, 1 page

15.   Meyer “HB 2819-1 Amendment”, 1 page

16.   Martin-Mahar, “Staff Measure Summary HB 3495”, 1 page

17.   Martin-Mahar, “Staff Measure Summary HB 2806”, 2 pages

18.   ORC “Written Testimony HB 2806”, 3 pages

19.   Warner, “Staff Measure Summary HB 3118”, 1 page