$1,600 direct payments face backlash from state Democrats

As Oregon considers a $1,600 reimbursement for residents, state Democrats have voiced opposition to the measure, saying it could have disastrous consequences for other government services.

In November, Oregonians are scheduled to vote on Initiative 118. The proposal would refund $1,600 to all Oregonians in the form of higher taxes from state businesses.

While Republicans initially opposed the cut, Democratic leaders joined them in expressing concerns about how the cut would affect the state in the long term.

Proposal 118 aims to increase the minimum corporate tax on sales above $25 million by 3 percent, with the proceeds going directly to Oregonians in the form of $1,600 checks.

If approved, the bill would raise $7 billion a year in tax revenue for the state, but some financial analysts warn the state would lose money that could be spent on other areas, such as health care and public safety.

One analysis predicted Oregon would lose $400 million in the 2025-27 budget cycle, prompting a group of Democratic lawmakers to band together and oppose the initiative.

The group included House Speaker Julie Fahey, House Majority Leader Ben Bowman, Senate President Rob Wagner and Senate Majority Leader Kathleen Taylor.

“As a matter of public policy, we believe this is a bad deal for Oregonians,” the lawmakers said in a statement this week. “We ask Oregonians to take a close look at Measure 118, and we ask you to join us in voting no.”

Democrats also said the tax cut could have “troubling, potentially dire consequences,” especially on government services such as road maintenance, health care and security.

“In these challenging times, we all want working families to have every break they can, but Measure 118 is not the answer,” they said. “We have serious concerns that it will slow job growth and cause cuts to critical services like road maintenance, firefighting and addiction treatment.”

Governor Tina Kotek has previously spoken out against the initiative.

“It may look good on paper, but his flawed approach will blow a huge hole in the state budget and threaten essential services for low-income and working families,” Kotek told a local publication Willamette Week.

Republicans have also previously expressed concerns, with Senate Minority Leader Daniel Bonham saying it was “yet another dangerous out-of-state experiment that fails to meet the needs of Oregonians,” the Oregon Capital Chronicle reported.

Bonham said it would threaten the state’s economic stability and ultimately lead to job losses and inflation.

“This measure will result in severe cuts to essential public services, including education, public safety and infrastructure,” Bonham said. “We cannot afford to gamble Oregon’s future on untested and risky policies.”

Organizations have also joined the lobbying effort against the bill, with Oregon Business and Industry reportedly forming a $500,000 political action committee to oppose the cut.

“It’s a scenario that sounds great on paper, but if enacted, it could cause more headaches than help for the state,” said Alex Beene, a financial education professor at the University of Tennessee at Martin. Newsweek. “Tax rebates for taxpayers — especially those on lower incomes — always seem like a good deal, and quite a few of them are.”

He added: “Some of that relief would be paid out through higher taxes on corporations, which could not only cause some of those in Oregon to consider raising prices, but potentially even moving. Yes, the relief sounds good, but if it leads to bigger economic problems in the process, it’s not as positive as it’s made out to be.”