Oregon companies are spending millions to fight UBI funded by corporate taxes

• Oregonians will soon vote on a corporate tax increase to provide them with a universal basic income.
• Companies have spent millions to oppose the 3% tax on corporate sales over $25 million.
• Both Democrats and Republicans say the measure could harm the state budget and essential services.

Oregon businesses are spending big to oppose a ballot measure that would tax businesses and give residents $1,600 a year under a rebate program similar to a universal basic income.

And lawmakers, both Democrats and Republicans, seem to agree. They say the ballot measure is fraught with problems and could ruin the state budget.

However, whether the state adopts Oregon Measure 118 will ultimately be up to voters.

The measure, also called the Oregon rebate, would increase the state's minimum corporate tax rate by 3% after a company generates $25 million in revenue in the state. The money would then be distributed to all Oregon residents, including minors and dependents who have lived in the state for at least 200 days.

The rebate “levels the playing field” for Oregonians, more than 170,000 of whom signed a petition to get the measure on the November ballot, the Oregon Rebate website says.

California donors were the largest source of funding for the Oregon Rebate PAC, which has raised hundreds of thousands of dollars in support of Measure 118, state records show. The opposition has raised more than $9.3 million, including $6.7 million in donations from Oregon businesses and individuals, state records show. The remainder was donated from out-of-state sources.

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An unusual demonstration of bipartisan opposition

Democratic Gov. Tina Kotek told Willamette Week in July that the ballot measure “may look good on paper, but its flawed approach would blow a huge hole in the state budget and jeopardize essential services for low-wage and working families.”

A united front of Democratic state lawmakers — who are more likely than their conservative counterparts to support the types of basic income programs that have gained popularity across the country — are also fighting the ballot measure. They fear it could hinder job growth and “lead to cuts to critical services such as road maintenance, firefighting and addiction recovery,” the state's Senate Democratic Leadership Fund said in a statement in August.

The state Republican Party called the measure “misleading, misguided and harmful to Oregonians and Oregon’s small businesses” in a news release Saturday.

“If Measure 118 passes, the $1,600 'rebate' that every taxpayer would receive would be offset by the need to pay even higher prices for food, medicine, utilities, gasoline, clothing and just about everything else “Oregonians have difficulty affording them anyway,” the party said. It added that the rebate could drive businesses away from Oregon.

The Oregon Legislative Revenue Office, a nonpartisan body, released a report this month that found low-income recipients of rebates could be excluded from receiving help from federal programs such as Temporary Assistance for Needy Families and Medicaid.

“If there were no changes and Measure 118 became law, it would simply create a $1.3 billion hole in the general fund,” Chris Allanach, the state’s legislative revenue officer, told The Oregonian. “The legislature could change it, but that has its own problems.”

Despite months of opposition from politicians and business leaders, Antonio Gisbert, the petitioner behind the ballot measure, has claimed that the rebate is net neutral.

“In short, the reimbursement will not be funded by General Fund dollars, but rather all implementation and related costs will be paid for by new revenues. Reducing poverty reduces demand for services and the increased economic stimulus will boost the state's economy and result in increased tax revenue and General Fund resources,” Gisbert told Business Insider in an email in August. He did not immediately respond to a request for additional comment.

The fight for UBI

Universal basic income programs provide recurring, unconditional payments to people regardless of their economic status. Measure 118 would make Oregon the second state in the United States, joining Alaska, to have some form of nationwide universal basic income. The Alaska Permanent Fund distributes annual funds to all Alaska residents.

Proponents of these programs say they can help poor residents meet their basic needs and stimulate the economy, while their opponents – mostly conservative lawmakers – argue that they are closer to “socialism” and offer no-merit payments.

In his previous comments to Business Insider, Gisbert said he remained optimistic that voters would support the measure in the general election.

“It seems a little bit like some of these elected (officials) are more beholden to corporations and corporate interests than to the interests of everyday Oregonians,” Gisbert said. “We are very committed to achieving a certain level of corporate tax fairness.”

Gov. Tina Kotek did not immediately respond to Business Insider's requests for comment.

Correction: An earlier version of this story misstated that Oregon businesses spent $9.3 million opposing Measure 118. Oregon businesses and donors actually raised over $6.7 million of the $9.3 million total. The remainder was donated from out-of-state sources.