INFORMATIONAL MEETING

 

TAPES 6 A-B, 7 A

 

HOUSE REVENUE COMMITTEE

JANUARY 17, 2005   1:30 PM   STATE CAPITOL BUILDING

 

Members Present:                        Rep. Tom Butler, Chair

                                                Rep. Vicki Berger, Vice-Chair

                                                Rep. Brian Boquist, Acting Chair

                                                Rep. Mark Hass, Vice-Chair

                                                Rep. Sal Esquivel

                                                Rep. Larry Galizio

                                                Rep. Betty Komp

                                                Rep. Andy Olson

                                                Rep. Chuck Riley

                       

Staff Present:                            Paul Warner, Legislative Revenue Officer

                                                Mazen Malik, Economist

                                                Kristi Bowman, Committee Assistant

 

TAPE 6, SIDE A

002

Chair Boquist

Calls the meeting to order at 1:32 p.m. For the benefit of the hearing and visually impaired members of the audience, committee members are asked to identify themselves.

 

ORIENTATION

036

Malik

Begins presentation on excise taxes, commonly called “sin taxes.”

 

 

 

65

Malik

Slide: Cigarette Tax Rate

 

 

 

106

Malik

Slide: Sales and Excise Taxes

 

 

 

127

Malik

Slide: Distribution Proportion. Mils is defined as 1/10 of a penny. Each tax rate has a different distribution rate.

 

 

 

175

Rep. Butler

Discusses the impact of the temporary 60 cent tax (that has since expired) on local governments. The 60 cent tax was a result of Measure 30.

 

 

 

225

Malik

Slide: Cigarette Tax Revenue Forecast

 

 

 

247

Rep. Olson

Question about decrease in cigarette sales.

 

 

 

255

Malik

Responds that decrease is due to increase in price and older first-time users, meaning a reduction in the amount of users.

 

 

 

295

Malik

Slide: Taxed Distributions. Chart shows a projected 63% drop in per capita smoking in 2011; 75 packs per capita—down from 140 packs per capita.

 

 

 

320

Butler

Asks if there is a similar graph for other tobacco products.

 

 

 

338

Malik

Responds that a chart could be developed, but the data may not be as reliable for other tobacco products.

 

 

 

340

Butler

Comments that it would be useful in knowing how much tobacco product is coming from overseas.

 

 

 

354

Chair Boquist

Asks if there is significant smuggling of cigarettes into OR, and would there be significant revenue if we reduced that smuggling.

h

 

356

Malik

Responds that this issue has been taken up by the compliance task force, which is a combination of the Dept. of Revenue, the State Police, and the Judiciary. Perhaps the task force could be invited to speak to this committee.

 

 

 

375

Chair Boquist

Requests record to show that 3 committee members are concerned about smuggling issues and the potential revenue that could be recovered for the future.

 

390

Malik

Slide: Price per Pack in Cents

 

 

 

405

Malik

Slide: Other Tobacco Products

 

 

 

425

Malik

Slide: Tax on Cigars

 

 

 

435

Malik

Slide: 2003-04 Revenue

 

 

 

475

Malik

Slide: Total Tobacco Revenue

 

 

 

TAPE 7 SIDE A

43

Malik

Slide: Master Settlement Agreement

 

 

 

58

Chair Boquist

Asks about tobacco settlement. If one of the cigarette companies goes bankrupt, then that settlement revenue disappears.

 

60

Malik

Responds that if that should happen, there will be provisions to maintain some of the program, but there will be a reduction.

 

 

 

67

Malik

Slide: Estimated Payments

 

 

 

71

Malik

Slide: Payments in Millions of Dollars

 

 

 

141

Butler

Asks for clarification on OR Opportunity Fund/OHSU debt. Is that to be paid out of the master settlement? Were appropriation credits used from the master settlement agreement to fund the approximately $200 M debt?

 

 

 

166

Malik

Responds yes.

 

 

 

178

Malik

Slide: Alcoholic Beverages.

 

 

 

180

Malik

Slide: Beer Tax Rates. Today’s rate is 8.38 cents per gallon; almost 5 cents per six-pack.

 

 

 

207

Malik

Slide: State Rates. OR ranks last among the other states in excise + sales tax rates.

 

 

 

216

Malik

Slide: 2003-04 Beer Tax

 

 

 

220

Malik

Slide: Beer Tax Revenue. 2004 consumption:

 

 

 

236

Malik

Slide: Wine Tax Rates

 

 

 

253

Malik

Slide: State Wine Tax Rates. OR ranks in the middle, about 23rd.

 

 

 

261

Malik

Slide: 2003-04 Wine Tax Revenue

 

 

 

265

Malik

Slide: Wine Tax Revenue

 

 

 

276

Rep. Berger

Asks if the number reduction reflects reduction in consumption.

 

 

 

280

Malik

Responds yes. Rate of wine tax revenue went up but consumption went down.

 

 

 

299

Malik

Slide: OLCC Liquor Markup. The rate today is 106% of costs. Costs change with time based on other factors of operating the liquor stores.

 

 

 

317

Malik

Slide: OLCC Sales. The 2003-2004 consumption rate was 1.33 gallons per capita, a reduction of only 8.3%.

 

 

 

340

Berger

Clarification of consumption time period: biennium or per year

 

350

Malik

Responds that the time period is per year.

 

 

 

355

Malik

Slide: Distribution Formula.

 

370

Malik

Slide: 2003-04 OLCC Revenue. This revenue is the most profitable at $304.4 M.

 

376

Malik

Slide: 2003-04 OLCC Revenue Distributions

 

 

 

387

Rep. Esquivel

Asks what a Wine Board is and what is its function..

 

 

 

390

Malik

Responds that its purpose is to advertise OR wines, and provide research and marketing for OR wineries.

 

 

 

400

Malik

Slide: OLCC Distributions

 

 

 

410

Malik

Slide: 911 Emergency Access Tax

 

 

 

429

Malik

Slide: 911 Revenue

 

 

 

434

Malik

Slide: Fuel Taxes

 

 

 

450

Berger

Asks about asking for a rebate on gasoline tax if someone is filling up their lawnmower.

 

 

 

470

Malik

Responds that  person may apply for it, but it must be applied through ODOT, not the local gasoline station. The taxes not used for fuel propulsion are used for other purposes, such as the ODOT operation fund. These funds are used for functions not legally allowed to be funded through the highway fund.

 

 

 

TAPE 6 SIDE B

10

Malik

Slide: Motor Vehicle Fuel Tax Rates

 

 

 

34

Malik

Slide: Fuel Tax Revenue (bar graph)

 

 

 

64

Malik

Slide:Weight-Mile Taxes

 

 

 

83

Butler

Asks whether other states depend on weight-mile taxes as much as OR does.

 

 

 

90

Malik

Responds that 5 states have a weight-mile tax.

 

 

 

122

Malik

Slide: Weight-Mile Tax Rates

 

 

 

134

Malik

Slide: In Lieu Taxes

 

 

 

164

Malik

Slide: Weight-Mile Tax Revenue (bar graph)

 

 

 

191

Malik

Slide: Transient Lodging Tax

 

 

 

232

Malik

Slide: Transient Lodging Tax. Revenue estimates in millions.

 

 

 

258

Malik

Slide: Transient Lodging Tax (bar graph)

 

 

 

282

Malik

Concludes presentation.

 

 

 

300

Chair Boquist

Adjourns meeting at 2:50 p.m.

 

Tape Log Submitted by:

Reviewed by:

 

Kristi Bowman, Committee Assistant

Kim Taylor James, Committee Coordinator

Exhibit Summary:

  • 1.      Slide Presentation: Excise Taxes, LRO Staff, 01/7/05, 23 pp.