The League of Women Voters Oregon 2016 Ballot Measure coverage is now available! The League of Women Voters members have researched and written these ballot measure reports below. Their soures include:
- Financial Impact and Explanatory Statements from the Secretary of State
- Measure supporters and opponents
- State agencies and economists
- Reports and published information, including current press coverage
Learn about the education related measures below or visit http://lwvor.org/home/voteresources/oregon-2016-ballot-measure/ for the full ballot measure coverage.
Ballot Measure # 99 Outdoor School Education Fund
Official title: Creates “Outdoor School Education Fund,” continuously funded through Lottery, to provide outdoor school programs statewide.
Initiative: This measure is a statutory amendment placed on the ballot by initiative petition with an estimated 93,102 valid signatures.
Financial Impact: Up to four percent (or $5.5 million) of the moneys from the Oregon Lottery Economic Development Fund would be transferred quarterly to a new Outdoor School Education Fund. The total to be deposited into the Outdoor School Fund would be capped at $22 million per year. This amount would be adjusted annually according to the Consumer Price Index.
Probable results of a YES VOTE: If this measure passes, a separate fund would be established to provide outdoor school programs statewide. It would be financed through the Oregon Lottery Economic Development Fund and administered by Oregon State University (OSU) Extension Service.
Probable results of a NO VOTE: If this measure fails, no special fund would be established to provide outdoor school programs statewide.
Background: Oregon’s first Outdoor School was started in Medford in 1957 and outdoor schools expanded to other school districts throughout Oregon during the following decades. Currently, all but four Oregon counties have some outdoor school programs, although 20 counties have fewer than 40% of their students participating, and many provide only a 2-night program rather than a full week. Funding for these programs is provided primarily through a combination of donations, fees, grants from foundations, and support from school districts, education service districts and local governments. In 2015 the Oregon Legislature passed Senate Bill 439 establishing an Outdoor Education Account in the State Treasury to support outdoor school programs for fifth or sixth grade students throughout Oregon. The bill also provided that the Oregon State University Extension Service would administer the Fund and distribute grants from available funds. However, although the original bill included $44 million from the Oregon General Fund to fund the programs in 2015-17, this funding was omitted from the final bill.
The Oregon State Lottery provides a significant source of funding to supplement the state General Fund. Net profits are transferred to the Oregon Economic Development Fund for distribution to specific programs. The Constitution dedicates 18% of net proceeds to the Education Stability Fund and 15% to a Parks and Natural Resources Fund. The Legislature decides how to allocate the remaining lottery funds. In some cases, Oregon statutes dedicate some lottery revenue to particular programs, including gambling addiction treatment, collegiate sports programs, the County Fair account and county economic development programs. After considering other priorities, the Legislature decides whether to fully fund these statutory dedications from the Lottery Fund. Oregon is also obligated to pay debt service on Lottery Revenue Bonds and the debt service payments are almost always made with Lottery revenue. For the 2015-17 Oregon budget, the total net lottery revenues were almost $1.2 billion. After the constitutional requirements and debt service payments, the remaining revenue available for distribution was about $598 million. Most of this, 76%, was allotted to education and about 17% to economic development programs.
Proposal: Ballot Measure 99 proposes to provide funding to give all Oregon fifth or sixth grade students the opportunity to participate in environmental education through the field study of “natural sciences and responsible use of natural resources.” The measure does not mandate outdoor education for all schools, but the goal is to make a week-long Outdoor School (or similar hands-on science experiences in the outdoors) accessible to all students throughout the state. The measure creates a separate Outdoor School Education Fund that is financed by net revenues from the Oregon State Lottery Fund. The measure requires that the lesser of 4% of the net lottery revenues or $5.5 million must be deposited every three months into the Outdoor School Fund. The total dollar amount would be limited to $22 million per year (or up to $44 million per biennium), with this figure adjusted annually based on the Consumer Price Index. Grants for outdoor school programs would be awarded by the Oregon State University Extension Service, which would also provide assistance and program leadership, as authorized by 2015 Senate Bill 439. Allocations to the Fund could not reduce lottery proceeds dedicated under the Oregon Constitution to education, parks and wildlife, but could reduce the amounts of lottery funding that now go to other educational and/or economic development programs. However, because this is a statutory dedication, the legislature would have some flexibility to decide whether to fully fund it if legislators believe that other educational or economic development programs should have priority.
- Outdoor education provides hands-on learning students can’t get inside the classroom. Research shows these programs build life skills (self-confidence, leadership, teamwork and collaboration); spark interest in science and math; and improve school attendance and academic performance.
- Measure 99 creates a stable, dedicated funding source for Outdoor School without raising taxes.
- Currently, about half of Oregon students don’t have the opportunity to attend Outdoor School, primarily because their schools do not have enough funding to participate.
- Dedicated funding for Outdoor School would benefit Oregon’s economy by creating full-time jobs in rural Oregon.
- Dedicating lottery funding to Outdoor School could reduce the funding for economic development programs that create jobs statewide, including in rural Oregon.
- Dedicating lottery funding to Outdoor School programs might reduce the lottery funding available for other school needs, such as maintenance.
- The initiative process is not the appropriate way to allocate funding for programs, because voters are unlikely to understand all the trade-offs.
- Measure 99 would complicate the legislature’s job of balancing the state budget and setting priorities for state expenditures. The legislature should determine how to use available funding for the state’s needs.
Ballot Measure # 98 Oregonians for High School Success
Official title: Requires state funding for dropout prevention, career and college readiness programs in Oregon high schools.
Initiative: This measure is a statutory amendment placed on the ballot by initiative petition with 101,302 valid signatures.
Financial Impact: The measure would require at least $147 million (which is 1.4% of the state budget) be spent annually on career and technical education, accelerated learning and high school graduation improvement programs. As no additional revenue source is provided, funding would come from growth in the General Fund.
Probable results of a YES VOTE: If this measure passes, the legislature would be expected to commit an additional $147 million per year to fund career and technical programs, college-level education, and dropout prevention programs. The legislature would determine funding.
Probable results of a NO VOTE: If this measure fails, the legislature would not be required to commit additional funds to career and technical programs, college-level education, and dropout prevention programs.
Background: Currently, the legislature provides General Fund revenues to the State School Fund based on constitutionally required quality goals; funds are distributed directly to school districts under a specified formula. In the last biennium 51.6% of Oregon’s 2015-17 General Fund and Lottery Funds were budgeted for education.
Oregon’s 72 percent graduation rate for the class of 2014 ranked fourth-worst in the nation according to the U.S. Department of Education. In Oregon per pupil spending has dropped 5% since 2010 and ranks near the middle of the 50 states.
Access to CTE (career technical education), such as auto shop, wood and metal shop, culinary arts, robotics, has been significantly reduced over the last 20 years. Data from the Oregon Department of Education show that the four-year graduation rate for students who have earned at least one credit of CTE is 15.5 percentage points higher than the statewide average. The difference tends to be more dramatic for low income and minority students who have taken CTE.
Proposal: Ballot Measure 98 requires state funds to be distributed to public school districts for three specific purposes: 1) establish or expand career and technical education programs in high schools, 2) establish or expand college-level educational opportunities for students in high schools and 3) establish or expand dropout-prevention strategies in high schools.
The measure directs the Legislature to appropriate at least $800 per enrolled high school student per school year for these three purposes. School districts may choose whether to apply for these additional funds, but in order to receive them, school districts must submit grant proposals showing how its funds would be used for the three programs. If a district’s grant application did not qualify, the Department of Education would assist the district in preparing a qualified plan.
The measure creates no new revenue sources and relies initially on growth of state General Fund revenue. If the state General Fund does not increase by at least $1.5 billion in the next two-year budget period, initial funding for the measure would be reduced and phased in over four years.
The Department of Education will monitor districts receiving funds. The Department may retain up to 1.5 percent of the funds for oversight of the program for the first two years and 1.25 percent thereafter. School districts may retain up to 5 percent of the funds for implementation of the new programs for the first two years and 4 percent thereafter. The Secretary of State will conduct audits on the programs’ success.
- Measure 98 would expand and create new vocational and career technical educational opportunities, as well as college-level courses, in Oregon high schools. Such courses could improve graduation rates.
- Measure 98 could provide funding for guidance counselors and tutors with the intent to reduce drop out rates.
- Measure 98 funding amounts to 1.4 percent of the upcoming state budget, well within the range of feasibility and similar to the size of investment for full-day kindergarten.
- There is no new source of revenue for these programs mandated to be funded from the state General Fund, thus reducing allocations for other essential services such as public safety, social services, and other education expenses.
- Budgeting for the three areas should be budgeted within K-12 funding, not outside of that budget process.
- The measure would reduce funding for other essential services, such as public safety and economic development.
Ballot Measure # 97 Oregon Corporate Tax Increase
Official title: Increases corporate minimum tax when sales exceed $25 million; funds education, healthcare, senior services.
Initiative: This measure is a statutory amendment placed on the ballot by initiative petition with an estimated 99,272 valid signatures.
Financial Impact: The measure is anticipated to increase state revenues by $548 million from January 1 through June 30 of 2017 and by approximately $3 billion each year beginning July 1 after that. The financial impact on state expenditures by program is indeterminate; the measure states that the funds are to be used for education, healthcare and senior services.
Probable results of a YES VOTE: If this measure passes, it would increase the corporate minimum tax by establishing a 2.5 percent tax on corporate gross Oregon sales above $25 million with the revenue going into the General Fund with the intent that it be used for education, healthcare and senior services.
Probable results of a NO VOTE: If this measure fails, it would retain the existing corporate minimum tax rates based on gross Oregon sales; there would be no increased revenue.
Background: Measure 5, passed in 1990, capped and reduced property taxes for homeowners and businesses; it also transferred responsibility for school funding from local government to the state to equalize funding. Measure 50, passed in 1997, set lower property tax rates and limited annual growth. These tax cuts coupled with a growing population, a recession, and low PERS investment returns in recent years have required school districts and state agencies to cut their budgets. Many Oregonians believe that more revenue is needed to adequately fund public education, healthcare, and senior services.
There are two main types of corporations. An S-corporation apportions corporate income to its shareholders, who pay personal income tax on it, and the corporation pays a $150 flat tax.
A C-corporation pays either a minimum tax of approximately 0.1% of their Oregon sales or 6.6% of their taxable income up to $1 million (7.6% of taxable income above $1 million), whichever is greater. The minimum tax is capped at $100,000 on Oregon sales above $100 million. Most corporations pay the minimum tax on Oregon sales. The corporate minimum tax and corporate income tax are commonly referred to as “Oregon corporate income tax.”
Among the Oregon C-corporations that say they will be affected by passage of Measure 97 are Lithia Motors, Powell’s Books, Pacific Power and Wilco. National retailers that would be affected include Comcast, Bank of America, Walmart, Amazon, Kroger (Fred Meyer), Lowe’s, and Wells Fargo.
According to the Legislative Revenue Office (LRO), while the amount of revenue paid by corporations has increased over the years, the percentage of total state tax revenue paid by corporations has stayed nearly flat. The Oregon Center for Public Policy calculated that corporations paid 18.5% of total state revenue in 1973 and only 6.7% now.
Proposal: Measure 97 would affect only C-corporations that do not have enough taxable income to pay income tax and, therefore, pay the minimum tax on Oregon sales. The measure would retain the current approximate 0.1% tax rate on Oregon sales below $25 million. Measure 97 would raise the minimum tax rate to 2.5% on the portion of Oregon sales above $25 million and remove the cap. The measure is expected to generate $548 million in new revenue in the current biennium and $3 billion each year thereafter.
Measure 97 exempts “benefit companies” from the 2.5% tax rate on sales over $25 million; they would continue to pay the current 0.1% minimum tax on all Oregon sales. (A benefit company aims to make a positive impact on society and the environment in addition to earning a profit.)
In analyzing the potential economic effects of Measure 97 the Legislative Review Office assumed that, because Oregon sales are heavily concentrated in domestic consumer sectors—primarily the retail trade, wholesale trade and utility sectors—the measure would largely act as a consumption tax and would likely result in somewhat higher prices in those sectors.
According to the LRO’s model of this tax, Measure 97 could be expected to dampen income, employment and population growth over the next five years, but all of these changes would be within 1% of projections under current tax law. An estimated 38,200 private sector jobs would be lost from projected growth (over half of them in lower-wage retail, wholesale trade and health services) and an estimated 17,700 higher-paying public sector jobs would be added over the next five years. (A study by Portland State University’s Northwest Economic Research Center (NERC) using modeling similar to that of the LRO, suggested different numbers for the next ten years: a loss of 4,000-20,000 private sector jobs and a gain of more than 30,000 government jobs.) None of the models include estimates of the potential economic impacts of significant investments in education, healthcare, and senior services.
The LRO said that Measure 97 would increase stability of state revenue over the business cycle. However, for the approximately 1000 C-corporations with Oregon sales over $25 million the 2.5% marginal tax rate would be higher than the rate in the six other states with a similar gross receipts tax. As a result, corporations with large tax increases due to Measure 97 might make changes to their corporate status to reduce their taxes.
Measure 97 states that the revenue is to go to education from early-childhood and kindergarten through 12th grade as well as for healthcare and services to senior citizens. However, the measure does not set a percentage of revenue to be applied to each, and Legislative Counsel has stated that the legislature would decide how the funds would be used.
- Measure 97 would not raise prices on most consumer goods since corporations charge the same prices regardless of tax levels in the various states where they sell goods.
- Oregon needs Measure 97 because Oregon has the 4th lowest high school graduation rate in the nation; nearly 400,000 Oregonians lack health coverage; and more and more seniors are retiring into poverty.
- Measure 97 is designed to hold large and out-of-state corporations accountable to paying their fair share of Oregon taxes so that we can make critical investments in our children and most vulnerable citizens.
- Under Measure 97 state revenue would gain stability over the business cycle so school budgets wouldn’t have to be cut so severely during recessions.
- Measure 97 would cost the typical Oregon household more than $600 each year in higher prices for food, medicine, clothing, housing, utilities and other essential goods and services; it is a regressive tax, hurting most the families who can least afford it.
- Measure 97 does not guarantee the revenues will go to schools, healthcare or anything else; the legislature will decide how to use it.
- Measure 97 would hurt all Oregon employers and small businesses by increasing their operating costs and making them less competitive. The LRO study concluded that over 38,000 jobs would be lost.
- Measure 97 taxes sales instead of profits. It means businesses could actually lose money and still be required to pay the tax.
Ballot Measure # 95 Public University Investments
Official Title: Allows investments in equities by public universities to reduce financial risk and increase investments to benefit students.
Referral: This measure is a constitutional amendment referred to voters by the 2016 Oregon Legislature as HJR 203 with a vote of 55 in favor and 1 against in the House and a vote of 21 in favor to 7 against in the Senate.
Financial Impact: According to the Oregon Financial Estimate Committee there is no financial effect on either state or local government expenditures or revenues required by this measure. The revenue and expenditure impact on public universities is dependent upon decisions made by each university on the type and amount of private equity in which they choose (or choose not) to invest and the return on those investments.
Probable results of a YES VOTE: If this measure passes, the Oregon Constitution would be amended to allow public state universities to invest in equities (stocks).
Probable results of a NO VOTE: If this measure fails, the Oregon Constitution would remain unchanged and the prohibition against public universities investing in equities would remain in place.
Background: Article XI, Section 6, of the Oregon Constitution prohibits the State from owning stock, except under limited circumstances where the funds invested were donated, gifted, or involved in technology transfers.
In 2013 the Oregon Legislative Assembly passed Senate Bill 270, which allowed Oregon public universities to each have its own governance board with the authority to manage its own finances and to invest in equities.
When the universities started exercising the duties, privileges and obligations granted by SB 270, a legal question arose as to whether the prohibition against the State owning stock (Article XI, Section 6) applies to them. Independent legal analysis suggests that it may, even with the statutory provisions of SB 270. Thus universities cannot invest in equities without legal risk.
The universities that would be affected by this measure are: Eastern Oregon University, Oregon Institute of Technology, Oregon State University, Portland State University, Southern Oregon University, University of Oregon and Western Oregon University.
Proposal: Ballot Measure 95 would amend the Oregon Constitution to ensure that public universities could invest in equities.
- Ballot Measure 95 would amend the Oregon Constitution to ensure that public universities could invest in equities. Allowing investment in equities could benefit students by helping to minimize tuition increases and by funding programs important to students.
- Allowing investment in equities will provide universities the ability to diversify their investments and to better prepare for market fluctuations.
- Investing in equities gives universities the ability to generate additional funds.
- There is no guarantee that any additional income from equities would provide tuition relief to students.
- There is no guarantee that universities would avoid market loss or risky investments.
- Universities would need to hire expensive investment advisors.